A right of redemption provides the homeowner the opportunity to purchase back his home after a foreclosure. Borrowers who want to redeem their homes must be able to pay the entire loan balance plus associated fees. In Texas, a homeowner's right of redemption depends on the type of foreclosure. Laws apply to the specific type of foreclosure.
If a home is foreclosed in Texas by the bank or mortgage company due to non-payment, there is no right of redemption. Even though both judicial and non-judicial foreclosure are allowed, the law does not allow homeowners the right to reclaim their home. Homeowners are given the opportunity to pay the delinquent amount 20 days before the foreclosure process begins. If the homeowner does not pay, the loan is accelerated, which means the full balance is due. The sale date is then scheduled.
HOA House Foreclosures
In the event of a Homeowner's Association foreclosure, the homeowner does have a right to redeem the home under Section 209.011 of the Texas Property Code. If the home is a single family unit and primary residence of the homeowners, a redemption period is allowed. The homeowner has 180 days to redeem the property. The clock begins ticking immediately after the HOA mails the homeowner a notice of sale. The homeowner will need to pay the subsequent buyer the full foreclosed price plus attorney fees and cots. An additional 25 percent of the sale price must also be paid.
HOA Condominium Foreclosures
The Uniform Condominium Act, Section 82.113, states that residential property owners may redeem the condominium if foreclosed through the Homeowner's Association. The owner has 90 days from the date of the HOA sale. An investment property cannot be redeemed. To redeem the property, the homeowner must pay the purchaser the sale price plus attorney fees and foreclosure costs.
Texas homeowners who lose their homes due to taxes also have a right of redemption, under Section 34.21 of Texas Tax Code. An owner of a residential homestead property is allowed two years from the filing date of foreclosure. To redeem the property, a homeowner will need to pay the amount of the winning bid, the deed recording fee and all fees the purchaser paid, including taxes, penalties and interest. If the home is redeemed within the first year, an additional 25 percent of the total sale redemption amount is also required. If the home is redeemed in the second year, the additional percentage is raised to 50 percent.
- VeritasLegalGroup: Right of Redemption
- Justia: 2005 Texas Property Code Chapter 82 Uniform Condiminium Act
- Onecle: Texas Property Code -- Section 209.011. Right of Redemption After Foreclosure
- Onecle: Texas Tax Code -- Section 34.21. Right of Redemption
- LegalMatch. "Foreclosure Alternatives." Accessed June 20, 2020.
- Cornell Law School Legal Information Institute. "Foreclosure." Accessed June 20, 2020.
- NOLO. "Homeowners’ Associations (HOAs & COAs)." Accessed June 20, 2020.
- Consumer Financial Protection Bureau. "How Does Foreclosure Work?" Accessed June 21, 2020.
- U.S. Department of Housing and Urban Development. "Are you at risk of foreclosure and losing your home?" Accessed June 21, 2020.
- Cornell Law School Legal Information Institute. "Equity of Redemption." Accessed June 21, 2020.
- FindLaw. "Regaining Ownership After Foreclosure: Statutory Redemption." Accessed June 21, 2020.
Jeannine Mancini, a Florida native, has been writing business and personal finance articles since 2003. Her articles have been published in the Florida Today and Orlando Sentinel. She earned a Bachelor of Science in Interdisciplinary Studies from the University of Central Florida.