I have done a few foreclosures, I am not an expert yet, but I can throw some information to you.
At the day of the sale there will be a redemption period given. Usually 6 or 12 Months from that date occupied or sometimes 30 days if the property is determined abandoned. The owner has until the end of that date to catch up on his debt and make good. At the end of the redemption period, exactly midnight of the date in the recording of the sheriff sale, the bank now owns the property.
Forclosure Redemption Period Question??? - Posted by Eric Foster
Posted by Eric Foster on December 20, 1998 at 21:06:11:
What is a redemption period and how does it work? (I am in Oregon.) Does this mean the person has the ability to get a home back after the foreclosure sale? or… the can get it back just until the day of the foreclosure sale? Please explain.
Re: Forclosure Redemption Period Question??? - Posted by Bill Gatten
Posted by Bill Gatten on December 21, 1998 at 13:42:00:
Eric,
There are two types of redemption rights held by a mortgagor (borrower)-- “equitable” and “statutory” rights (of redemption). The equitable right is cut off by a sale under a foreclosure judgement or decree (e.g. judicial foreclosure) since that is the objective of the lawsuit. However, after the foreclosure, in many states, the “statutory” redemption right arises, giving the mortgagor and/or creditors with claims against the property the right to redeem the property from the sale within a certain period of time following the foreclosure sale.
In many states, there is no redemption period and the deed passes to the buyer in total upon the foreclosure sale (your state, for example). In others, you may need to be wary of the original mortgagor coming back with a bundle of cash to [re]claim his property after you thought you bought it.
Under statutory redemption a borrower can actually come back for as much as two years later (though I’m not sure where 2 year redemption periods exist anywhere… possibly some midwestern states) to the officer who made the sale with the amount of the auction price, plus accrued interest… and simply take his house back.
Redemption rights arise from old laws predominant when the country was primarily agricultural, and were designed to protect farmers when their crops were bad. Over the last century, however, several states have greatly reduced, or eliminated their redemption periods. However, if redemption rights have not been eliminated, any time-priod reductions often do not apply to farmers and owner-occupied property owners.
Its a good idea to know what your state’s redemtpion period is. I’ve been told of prople who bought properties at auction and lost them a year later when the original owner came into a large enough sum of money to recalim his home (I don’t personally know of such cases, however).