right of redemption
The legal right of a borrower to reclaim foreclosed property by paying the full outstanding debt within a specified period.
Example
“State law gave her a six-month right of redemption to reclaim the foreclosed home.”
Memory Tip
REDEMPTION — a legal window to buy back what you lost to foreclosure.
Why It Matters
The right of redemption provides borrowers with a critical safety net after foreclosure, giving them a second chance to keep their home by repaying their debt within a set timeframe. Understanding this right is essential because it affects your options during financial hardship and can determine whether you permanently lose your home or retain it through timely repayment.
Common Misconception
Many people mistakenly believe that once a foreclosure sale is completed, they have permanently lost their property with no recourse. In reality, depending on state law, borrowers often have a redemption period ranging from a few months to several years after the sale during which they can reclaim their home by paying off the debt.
In Practice
Suppose you stop making mortgage payments and your lender forecloses on your home, selling it at auction for 150,000 dollars when you owe 180,000 dollars. In a state with a one-year redemption period, you have twelve months from the sale date to pay the full 180,000 dollars plus costs to reclaim your property and stop the new buyer from taking possession.
Etymology
From Latin 'redimere' meaning to buy back.
Common Misspellings
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