Foreclosure Redemption Law

The right to redemption laws allow former borrowers to reclaim their property after it has been foreclosed. The type of mortgage you have will determine if you can exercise this right.

Federal Mortgages

Each state can acknowledge the right to redemption for private mortgages, but federal mortgages have their own rules. Federal mortgages do no allow the right of redemption on foreclosed property. FHA, VA and Freddie Mac are examples of federal mortgagees that do not allow redemption of property.

Redemption Periods

Every state sets their own redemption period. The redemption is a period after a foreclosure auction or sale when the former owner can buy the property and reclaim ownership. The owner will be notified of the redemption period once the property has been sold.

Redemption Process

To redeem your property after a foreclosure sale go to the courthouse in the county where the auction was held or to the trustee if the sale was part of a trustee sale. After you have provided proof of past ownership, they will give you the pay-off amount. You will need to pay this amount in full before the last day of the redemption period to reclaim your property.

References

• Stopping Banks Foreclosure: Alabama Foreclosure Procedsures
• Investor Words: Right of Redemption
• IRS Tax Attorney: Fraud Right of Redemption