Right of redemption is a legal process that allows a delinquent mortgage borrower to reclaim their home or other property subject to foreclosure if they are able to repay their obligations in time.
What is a redemption period in real estate?
Redemption is a period after your home has already been sold at a foreclosure sale when you can still reclaim your home. You will need to pay the outstanding mortgage balance and all costs incurred during the foreclosure process. Many states have some type of redemption period.
Can you waive a right of redemption?
Statutory Redemption At the end of the redemption period, if the former homeowner cannot exercise the right of redemption, the new owners have the right to evict them. The former homeowner also can opt to waive the right of redemption after the foreclosure sale.
What happens when you redeem a property for sale?
You’ll have to pay your original tax debt, interest and any expenses associated with collecting your debt. If you redeem the home after the sale, you may also have to pay any costs that the buyer incurred in relation to buying the home.
Can a homeowner keep the right of redemption?
The downside, however, is the homeowner forfeits the right of redemption. While less commonly used, a judicial foreclosure, which involves going through the court system to foreclose on the property, allows a homeowner to keep the redemption rights.
How does right of redemption work in Indiana?
At the auction, your home is sold to the highest bidder subject to your right of redemption. This means that after the sale you get a certain amount of time in which to pay off the debt (plus various other amounts) in order to get your house back (redeem the property).
Can a foreclosure waive the right of redemption?
The mortgage documents might waive the borrower’s right to redeem. The redemption period could be shortened under some conditions (like if the homeowner abandons the home). The homeowner might get more extensive redemption rights if the foreclosing party (rather than a third party) buys the home at the foreclosure sale.
