What Is The Redemption Period?

Redemption Period & A Short Sale:

In Minnesota, the term "redemption period" is the period that the owner of real estate has to redeem the property after a Sheriff's sale.  The time is typically 6 month's from the date of the Sheriff's Sale.  The redemption period can be shortened to 5 weeks if a court order is obtained and the home is either abandoned or the homeowner does not live there.  The redemption period is 12 months if the any of the following apply:

1. The amount due to the lender is less than 2/3 of the original balance.
2. If the property is greater than 10 acres in size with additional limitations.
3. If the property is greater than 40 acres in size.

What happens During the redemption period?

• The homeowner may continue to live in the home until the end of the redemption period.
• If the homeowner would like to keep the property, they must pay off the entire balance of the mortgage plus any fees.
• The owner can refinance the home if they can find a lender willing to do so.
• The owner can work with the lender for a forbearance, mortgage modification, repayment plan if the lender allows it.
• The homeowner can sell the home.  If there is equity in the home, the homeowner may keep any equity that is left after selling fees.  If there is no equity, the owner may pursue a short sale.
• After the Sheriff's Sale (during the redemption period), additional interest and fees accrue which will increase the payoff amount.
• The owner is still responsible for all fees associated with the home, including insurance and utilities.
• If the owner files for bankruptcy during the redemption period, the period may be extended by an additional 60 days.  A court order must be obtained to get additional time during the redemption period.

What happens After the redemption period?

• Whoever was the winning bidder at the sheriff's sale and holds the certificate is the rightful owner of the property.
• The owner must vacate the property.  If they do not, a court order and eviction will take place.  This can go on public record and may further damage the credit of the occupant.
• If the property is offered for sale after the redemption period has expired, any equity left in the home goes to the new owner.
• If there are additional mortgages or liens on the property, they will become unsecured and the owner will still be responsible for the balances owed (unless bankruptcy is filed and the debts are discharged).