What is Right of Redemption?
Definition
The “right of redemption” is simply the right of the foreclosed homeowner to buy the home back from the person who bought it at foreclosure.
Explanation
After the sale (foreclosure auction) is over, you may still have the chance to get your house back if the house is sold by judicial foreclosure. It is different from the "right of reinstatement". The right of reinstatement involves bringing your note current. The right of redemption involves paying the "redemption price."
The right of redemption is purely statutory. This means that there has to be a specific law providing for the right. If there isn't a statute, there is no right.
If your house is sold under a deed of trust, the sale is done through the power of sale clause contained in the trustee’s deed. With the trustee’s sale, you lose your right to make any claim on the property and there is no right of redemption.
Furthermore, at a trustee’s sale, you do not have the right to buy your house.
Judicial foreclosures are uncommon in deed of trust states, such as California, Nevada and Colorado.
This right of redemption is one reason that judicial foreclosures are so unpopular with lenders. As is discussed elsewhere, the right of redemption makes a house difficult to sell because it can't be readily sold until the redemption period expires.
Statutory Periods for Redemption
The statutory period for redemption varies by state. In California, the period of redemption is either 3 months or 12 months depending on whether the foreclosure sale proceeds are enough to pay off the secured debt. If the sale raises enough money, the redemption period is 3 months. If it doesn't, the period is 12 months.
In some states, such as California, the statutory period for redemption can be extended if you can show that the foreclosure was the result of mistake or fraud.
The Redemption Price
In order to redeem the house, the you must pay the "redemption price." This is generally the price paid by the purchaser at auction plus any taxes or assessments that are due, along with costs and interest.
redemption
Would like to know--you state that their is a redemption period in california. My home was sold yesterday without notice. Is this legal? We filed for bankruptcy in June. we had a sale date then the sale date got postponed. We were under review for a modification. They kept saying it was under review call back in 30 days. Now we call and the home is sold back on the 20th their was no sale date set.
No redemption in Calif. with non-judicial foreclosure
There is no right of redemption with a non-judicial foreclosure. If you signed a Deed of Trust when you bought your house then your house was foreclosed outside of court. Most loans in California are secured by a deed of trust, not a mortgage, so there is no right of redemption. The notice of sale may not have reached you through the mail. The trustee publishes the notice in the paper and you are presumed to have read it. Its called constructive notice. If you filed a chapter 7 bankruptcy the automatic stay only temporarily slowed down the bankruptcy. I discuss that elsewhere on this website.
foreclosure
we went to court in november for foreclosure. showed the judge a paper from the place we were working with showing we were working on saving the house. 2 days later we lost our job. now they wont work with us untill we have a job. cant find one so we are going to have to move. i called the mortgage companys laywer. he said the date to try and redo our loan was april first and it is auctioned april 3rd. we did not get any papers saying auction date. our papers from the court in november said we have 90 days after the auction date to redeam the property. does that sound right? do they have to notify us in writing or anything of the auction date? will we get any more papers telling us when to be out? we also got a envelope today in the mail from the mortgage company. it was a privacy report flyer. thank you . we still dont have a job and are looking for a place and trying to save money to get one. we have 3 kidsthe papers say judgement for foreclosure and sale. it has no date of sale. it states. the rights of redemption shall expire on april 3rd. unless shortened by further order of the court, except pursuuant to 28 u.s.c. sec 2410/ the u.s.a. , if as a defendant, shall be granted 120 days from the date of the sale within which to redeem the property from sale. i called the mortgage companys lawer 4 times to finally get someone to tell me the auction date was april 5th. i have nothing in paper to state that though. so how much time do i have to move? will they notify me in writing or by sherrif? do i have the 120 days? thank you
Re Redemption
Redemption Period.....you stated that California is not a redemption state...but, then you list info reagrding redemption periods and price. Is this only if a propertry is sold in the case of mistake of fraud?? Thanks! :)
Redemption period
This is great, this information is helping us with a situation pertaining to my brother.
Thank you
regarding posting by Ralph on
regarding posting by Ralph on 2/23/08 - this is the best explanation of the right of redemption posted anywhere.
Thanks Ralph
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