Redemption

The right of redemption allows a person to reclaim or “redeem” their property after a foreclosure by allowing the person to pay the outstanding mortgage balance (or sometimes the amount of the purchase price at the foreclosure) on the loan and most likely the costs incurred during the foreclosure process.  This would essentially be the same thing as payoff of the note, the difference being that it occurs post-foreclosure rather than pre-foreclosure. 

If all your state’s requirements are for redemption (NOT ALL STATES ALLOW FOR REDEMPTION) are met, and you make all the required payments, the purchaser of the property would either be required to unwind the foreclosure sale or to deed the property back to you.  

If your state allows for redemption on the home, there will be a time limit for the redemption.  After the time limit passes, redemption would be unavailable.  The redemption period and the redemption process vary from state to state.  Additionally, states have different rules for different types of foreclosure.  For example, Texas does not allow for redemption of a foreclosure on a first lien, but does allow for redemption if the foreclosure was conducted by a homeowner’s association or was a tax sale.  Some states allow for redemption on mortgages that were foreclosed through a judicial foreclosure sale and not for mortgages that were foreclosed through a non-judicial foreclosure sale.  See the My Foreclosure Options homepage for a detailed explanation of the difference between a judicial and a non-judicial foreclosure.

If you believe you have the funds to redeem your property, you should speak to an attorney licensed in your state as soon as possible to ensure that you 1) have the ability to redeem the property in your state, or given your circumstances; 2) are still within the allowable time frame for a redemption; and 3) that you have correctly calculated the amount necessary to redeem the property.

Previous post:

Next post: