Twelve-month redemption period

Twelve months is the extended Minnesota redemption period, applying in the circumstances set out in Minn. Stat. 580.23 subdivision 2. There are seven of them, and three come up regularly.

The common triggers#

The amount claimed due is less than two-thirds of the original principal. In other words, the borrower has paid the loan down by a third or more. The reasoning is that someone with substantial equity built up deserves longer to protect it.

The property exceeds forty acres. Land takes longer to sell and to finance, and a forty-acre parcel is not a house.

Agricultural property exceeding ten acres at the time the mortgage was executed.

The remaining triggers reach older mortgages — those executed before 1 July 1967, and certain mortgages executed before 1 July 1987 on property exceeding ten acres at execution.

The counterintuitive part#

More time is not unambiguously better.

The statutory bar on deficiency judgments in Minn. Stat. 582.30 subdivision 2 applies to foreclosures by advertisement with six-month redemption periods under 580.23 subd. 1, or five-week periods under 582.032.

A twelve-month period under subdivision 2 is not in that list.

So a borrower with twelve months to redeem may also be a borrower whose debt can survive the sale — where a borrower with six months would have had the shortfall extinguished.

That trade is worth understanding rather than assuming the longer period is simply a benefit.

The lender cannot choose it strategically#

A lender might see the deficiency implication and prefer a twelve-month period.

The Minnesota Supreme Court addressed this in American National Bank v. Blaeser: where the statute provides a six-month redemption period, a lender cannot foreclose by advertisement and preserve a deficiency claim by electing twelve months.

The period follows the facts, not the lender's preference.

The agricultural waiver#

One narrow route to shortening it.

For mortgages executed on or after 1 August 1994, a mortgagor may waive in writing the right to a twelve-month period based on the property being in agricultural use at execution.

The formalities are strict. The waiver must be either a separate document or a separately executed and acknowledged addendum on its own page. If separate, it must be in recordable form, identify the mortgage, and be recorded within ten days of the mortgage being recorded.

Where that waiver operates, the six-month period applies instead.

Reading which applies#

The notice of mortgage foreclosure sale states the redemption period, and so does the sheriff's certificate.

That means the answer is on a document the homeowner already has, before the sale in the first case and immediately after in the second. It does not require working out which subdivision applies — it requires reading the notice.