Is your home in danger or foreclosure or going to be foreclosed? Luckily, you still have options depending on what state you live in! Check out our previous blog posts to find out more about the process of foreclosure and what you can do to prevent it. In this week’s blog post, we will discuss in further detail the right of redemption before and after foreclosure.
Unfortunately New York State does NOT have a right of redemption period. Once your home is sold to the highest bidder, you will not be able to get it back. The only way that an individual may be able to get their home back is if their is an issue with the sale to the new owner. If the sale was not held properly, then this could be grounds to set aside the sale. If that happens, then the prior owner can satisfy the loan. This is why it is important to do what you can to prevent the foreclosure in the first place before it escalates to this. Most prior homeowners are unable to get their home back after foreclosure. If you live in a state that allows for redemption, you will want to take action if you can.
Before redemption after foreclosure is discussed, PLG will go over redemption before foreclosure. The borrower usually will have to pay off the entire underlying mortgage debt. They will also usually have to pay off interest and other costs. Although this is an option, it doesn’t happen often. Usually if a borrower has enough money, they do not get themselves into mortgage debt to begin with.
The individual borrowers will be given a redemption period in which they are able to buy back or “redeem” their property. It is always very devastating for a homeowner to lose their property. Understanding redemption can help you to get back the place you’ve invested so much in.
Redeeming the home can be considered reference for one of two things. Either it is paying off the total debt (including principal balance and additional costs) before the sale in order to stop the foreclosure. Or it can refer to paying off the purchase price (plus certain costs and interest) after the foreclosure sale to reclaim the property.
Statutory redemption laws will give borrowers time to obtain the funds they need. It also allows them more time to live on the property before they are evicted.
These laws will vary between states. As stated above, NY does now allow for redemption after foreclosure. Be sure to check your states laws!