Right of redemption,
Definition of Right of redemption:
When an individual obtains a mortgage to buy a home, the home itself serves as the collateral for the loan. That means that the home owner forfeits ownership of the home if they default on their payments. Many mortgage notes include the right of foreclosure, which describes a lender's ability to take possession of a property through a legal process called foreclosure and outlines the conditions under which the lender has the right to foreclose. (State and national laws also regulate the right of foreclosure.).
The right of redemption allows individuals who have defaulted on their mortgages the ability to reclaim their property by paying the amount due (plus interest and penalties) before the foreclosure process begins, or, in some states, even after a foreclosure sale (for the foreclosure price, plus interest and penalties).
Fundamental legal right of a borrower (mortgagor) to redeem the mortgaged property. The mortgagor can exercise this right (1) on or before the date of foreclosure, (2) after the foreclosure on payment of a penalty or, in some jurisdictions, (3) even after the foreclosure sale-by paying off in full the outstanding debt plus all charges and penalties. It is commonly an inviolable right which may not be restricted unduly by the courts. If a mortgage agreement does not specifically provide for redemption of the mortgage property it is, ipso facto, unenforceable in law. Also called equitable right of redemption, statutory right of redemption.
How to use Right of redemption in a sentence?
- In some states, this right can be exercised even if the lender has already re-sold the property, as long as it is still within the redemption time frame and all conditions are met.
- Right of redemption is a legal process that allows a delinquent mortgage borrower to reclaim their home or other property subject to foreclosure if they are able to repay their obligations in time.
- A successful redemption will also typically require the borrower to repay any costs incurred to the lender or other parties as a result of the foreclosure process.
Meaning of Right of redemption & Right of redemption Definition