Redemption: Before or After Foreclosure

Redemption is a great word. It is a word of hope and salvation. It is a word that proclaims “victory is ours.” According to the dictionary, it means “the action of recovering or taking possession of something in exchange for payment, or the settlement of a debt”. Another definition is “the act of buying one’s freedom.”

This may be your hope when facing foreclosure. There are many battles that have been fought in our country’s history where the outcome seemed grim, but the tide turned and redemption came. It was not about numbers or quantities, but victory came through wisdom and strategy. There are strategies that can help you redeem what seems to be lost or nearly lost.

You have options before foreclosure and you may even have an option after foreclosure, depending on the laws in your state. Talk to your lender before they use the word foreclosure. The moment you see that you may be in a crisis, call. Do your research before you call so you understand words like “loan modification” and “forbearance agreement or contract.”

loan modification It may work for you if you can currently make your regular payment, but just can’t catch up on late payments. If this is your current situation, you can negotiate with your lender to include any late payments in your unpaid principal balance. This would include interest and security deposit if you do.

Leniency agreement or contract is a default prevention tool offered to borrowers that allows for an extension of time. It is the least expensive training alternative. It allows you, the borrower, to pay overdue payments within a structured period of time. This must be in writing. The lender would set up a payment plan based on your finances and may even temporarily reduce or suspend your mortgage payments.

There may also be an option after you have foreclosed. It’s called “redemption.”

Redemption it is a period after your home has already been sold at a foreclosure sale when you can still claim your home. To reclaim your home, you will need to pay the outstanding mortgage balance and any costs incurred during the foreclosure process.

Many states have some type of redemption period. The redemption period and availability may be determined by whether the execution was judicial or extrajudicial. Judicial foreclosures are processed through the courts, beginning with the filing of a lawsuit by the lender and the filing of a notice of lis pendens. Extrajudicial executions are processed without judicial intervention, with the requirements for execution established by state law. You can research them in more depth online.

Redemption deadlines and procedures can vary greatly from state to state. Every state is different. You’ll need to research your state’s foreclosure laws to see how long that period of time really is.

There is foreclosure redemption before and maybe even after. If you feel attached to that word “foreclosure,” you may find redemption, the ability to buy back your freedom, to keep your beloved home.