What is the Right of Redemption?

When you experience foreclosure, it might feel like all hope is lost. But, this isn’t always the case. After you lose your home to foreclosure, it may still be possible to get the property back, or sell it.

All state laws allow you to keep your home before it is foreclosed on, if you are behind on your mortgage, but then catch up the back payments.

What is the Right of Redemption?

The right of redemption applies to owners of homes that are foreclosed on. This means that a homeowner has the right to “redeem” their property, after it has been foreclosed on, by paying a certain amount of money to the lender. The two types of redemptions include:

1. Equitable right of redemption

The equitable right of redemption is available in all states. This right gives you the chance to pay the amount of payments on your mortgage that are behind, instead of the entire loan. This is a right that you can exercise any time prior to the foreclosure sale. If you catch up your mortgage payments and any penalties and fees, this will stop your foreclosure.

2. Statutory right of redemption

Unlike the equitable right of redemption, the statutory right of redemption is not available in every state. However, this right is available in New Mexico. This right allows you to reclaim ownership of your foreclosed property during a certain period of time after the foreclosure sale. In order to exercise this right, you have to pay the foreclosure sale price, including interest and other fees, within a certain amount of time.

Unfortunately, right of redemption is a right that is not often used, as it can be pretty difficult for a homeowner to come up with the money they need to pay off the balance due on the mortgage or the foreclosure sale price. This is why many homeowners will agree to sell their right of redemption to a cash buyer like us.

How does the Right of Redemption Work in New Mexico?

Before Foreclosure:

The equitable right of redemption can be exercised before your home is foreclosed on. When you exercise your equitable right of redemption in New Mexico, you can cure the default before your home is foreclosed on by paying the mortgage company the entire amount of payments that are behind or in arrears.

After Foreclosure:

The statutory redemption laws vary by state. In New Mexico, you are given up to nine months to repurchase the home after a foreclosure sale, depending on the terms of the mortgage or deed of trust. However most mortgage terms only allow the right of redemption period to be 30 days. If you exercise your right to redeem the property,  you will be required to pay the foreclosure sale price and any interest and fees associated with it.

Finding the necessary funds to purchase your home isn’t exactly easy. Instead, give us a call today and we can give you a cash offer for your redemption rights. This is a win/win solution for everyone involved!

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