While a foreclosure can cause you to lose your house, this does not have to be the last part of the process. The right of redemption provides you with the opportunity to get your house back even after foreclosure has occurred. Laws vary from one state to the next, but many of them offer this provision for homeowners.
Right of Redemption
The basic idea behind a right of redemption is that it allows a homeowner to buy his house back after the foreclosure has occurred. Some states do not allow homeowners to benefit from this process. With a right of redemption, the homeowner has a certain amount of time to come up with the money to pay for the amount that is due. If she pays the amount that she owes, the homeowner can get the house back even if someone has already purchased it from the bank.
Right of Redemption Time Frame
Each state has rules about how long a homeowner has after the foreclosure is finalized to redeem his home. The amount of time could only be a few months; in some cases, it could be much longer. For example, in Tennessee, it takes two years for the right of redemption to pass. If you are facing a foreclosure, it is generally a good idea to consult an attorney in your state to find out the rules governing your situation.
Buying Redemption Rights
Even though a homeowner does have redemption rights after she loses her home to foreclosure, these rights can be bought or sold. When an investor purchases a home through foreclosure, he might go to the original homeowner to make an offer for the redemption rights. The former owner of the property may be inclined to sell these rights because she does not have the cash to buy back the house. By doing this, the new owner of the house can ensure that he does not lose the home to a redemption.
Coming Up With Money
If you lose your house to a foreclosure, it is very difficult to redeem your property, even though you have the right to. Unless you come up with a large amount of money to pay for the house in cash, you are usually not be able to redeem the house. Most lenders will not be willing to finance this purchase for you because of the uncertainty surrounding your financial situation and the house itself. This makes the redemption of houses a rare occurrence in the foreclosure market.