If your mortgage payments are behind and the lender institutes foreclosure proceedings, you need to know about the redemption periods available in your state to save your property. You can redeem your property either before or after foreclosure. The redemption period is the specific amount of time you have to redeem your property, usually after the foreclosure sale. State law determines whether or not there is a redemption period and the time frame. The period varies depending on the type and use of the property. It is also possible to waive it.
Redemption Period Availability
While it is possible to redeem your property before a foreclosure sale in all the states, it is only in certain others that you can still regain your property afterwards. State law determines whether or not the statutory right of redemption is available. States such as Wisconsin, Tennessee and Minnesota have a statutory right of redemption while New York, Texas and New Hampshire do not, meaning foreclosure sales are final.
Specific Time Frames
The statutory right of redemption period varies from state to state, ranging from 30 days after the foreclosure sale to a full two years. The redemption period depends on whether the foreclosure was judicial, following a court order, or non-judicial, such as exercise of a power of sale clause in a mortgage. For example, in California, following judicial foreclosure there is a 12 month redemption period while for non-judicial foreclosure there is no such right. The type and use of property also factors into the redemption period. Redemption periods for residential properties are typically 6 months, shorter than the 12 months for large tracts of agricultural land.
Redemption Period Rights
Although the purchaser pays the full foreclosure price, the defaulting borrower still retains certain rights in the property until the expiration of the redemption period. The defaulting borrower may maintain occupancy of the property undisturbed by the foreclosure purchaser or, in some states, the borrower may have to allow the buyer to inspect the property periodically until the redemption period ends. Alternatively, the purchaser may take possession of the property as soon as the foreclosure sale goes through but hand it back to the defaulting borrower if he settles the debt within the redemption period. Ownership of the property only passes to the foreclosure purchaser when the redemption period ends.
Waiving or Shortening the Redemption Period
Under certain circumstances, the redemption period can be shorter or even waived. If the defaulting borrower abandons the property soon after the foreclosure sale, the redemption period is shorter. If state law requires a defaulting borrower to grant the foreclosure purchaser access to inspect the property and he refuses, the court can issue eviction orders that effectively terminate the redemption period. If the mortgage contract has a power-of-sale-clause it extinguishes the right of redemption. Similarly if the defaulting borrower signed a deed of trust allowing a third party to foreclose on the property in case of default on behalf of the lender without going to court, then there is no redemption period.
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