Right of Redemption in Foreclosure: How to Reclaim Your Home Before or After the Sale

If you're facing foreclosure, understanding your rights during the foreclosure redemption period can help you save your home. A "redemption period" is a legally designated time frame that allows homeowners to redeem their property by paying off the full amount owed, potentially stopping the foreclosure process or reclaiming a home after foreclosure.

To redeem your home, you must either:

• pay the total mortgage debt before the foreclosure sale to stop the process, or
• buy back the property after the foreclosure sale by reimbursing the purchaser for the full sale price (or in some cases, paying the full amount of the mortgage debt plus costs and interest).

Every state gives homeowners a right of redemption before a foreclosure sale, and some states offer a post-foreclosure redemption period, giving former homeowners one last chance to get their home back.

What Is the Right of Redemption in Foreclosure?

The right of redemption is a legal option that allows homeowners in foreclosure to stop a foreclosure sale from happening by paying the full amount owed, including the principal, interest, and foreclosure-related costs, or reclaim their property after a foreclosure sale by by reimbursing the purchaser for the full sale price (or in some cases, paying the full amount of the mortgage debt plus costs and interest).

All states allow homeowners to redeem their property before a foreclosure sale. Some states have a law that provides a post-sale redemption period. The details and duration of a post-sale right of redemption, known as the "redemption period," vary by state and are governed by state law.

Redemption Before Foreclosure

One way to avoid foreclosure is by redeeming the property before the foreclosure sale. The pre-sale right to redeem is based on an equitable principle that borrowers should be given one last chance to keep their home, even if they've defaulted on mortgage payments.

Redemption Costs: Paying Off the Full Balance

To redeem before the sale, you'll have to find out the exact amount needed to satisfy the debt. So, you should request a payoff quote, which is also sometimes called a "payoff letter" or "payoff statement," from your loan servicer.

Time Limit for Redeeming Your Home Before Foreclosure

You may redeem the property at any time between the acceleration of the underlying debt and the foreclosure sale.

Is Pre-Foreclosure Redemption a Realistic Option?

In practice, borrowers don't often redeem before a foreclosure sale. People who have access to enough funds to redeem the property before the sale usually don't fall behind in payments in the first place. Or, if they fall behind in payments, they'll typically use their available money to reinstate or keep making the payments until their finances improve.

Redemption After Foreclosure

The right to repurchase the home after a foreclosure sale is called the "statutory right of redemption" because the amount of time allowed to redeem and the right itself arises solely from state statutes. Statutory rights of redemption grant borrowers a specific amount of time after a foreclosure during which they may reclaim the property by:

• paying the foreclosure sale price or
• (in some cases) the full amount owed to the lender, plus certain other allowable charges.

Statutory redemption laws give borrowers more time to obtain funds so they can keep their homes. Also, state law sometimes gives the foreclosed borrowers the right to live in the home during the redemption period.

State-by-State Differences in Redemption Rights

The length of the statutory redemption period varies from state to state, and not all states provide one. When available, the redemption period generally ranges from 30 days to a year. In most states that provide a post-sale redemption period, specific factors often change the redemption period's length. For example:

• The redemption period might vary depending on whether the foreclosure is judicial or nonjudicial.
• The redemption period might be reduced under specific conditions, like if the homeowner abandons the property.
• The loan documents might waive the borrower's right to redemption.
• If the lender pursues a deficiency judgment, redemption rights might be triggered.
• More extensive redemption rights might be available if the foreclosing lender, rather than a third party, buys the property at the foreclosure sale.
• Loans used to purchase the property might receive greater protection than other types of mortgage loans.

Where to Look Up Your State Laws

Review the chart below to find out if your state's laws generally provide a redemption period. To get more information about the redemption period and how to redeem in your state, see our State Foreclosure Laws section. Read the article about foreclosure procedures where you live. Another good resource for detailed information about redemption periods is the National Consumer Law Center's Home Foreclosures. You can also talk to a local lawyer.

Cost to Reclaim Your Home After Foreclosure

To redeem, a foreclosed homeowner usually has to pay either:

• the amount that the buyer paid for the home at the foreclosure sale, plus interest and certain expenses, like homeowners' association (HOA) fees and property taxes, or
• the total amount owed on the mortgage loan, plus interest and expenses.

How to Exercise Your Right of Redemption

Generally, to redeem a property after a foreclosure sale, the foreclosed homeowner must give a written notice of redemption to:

• the party who bought the home at the foreclosure sale and
• the court or other party that held the foreclosure sale.

Then, the former homeowner must pay the redemption amount to the buyer, court, or another party. State law normally says what information has to go in the redemption notice and who gets the redemption money. Talk to a local lawyer if you need more information about redemption procedures after a foreclosure in your state.

State-by-State Guide: Is Redemption Allowed After a Foreclosure Sale?

The chart below shows whether a redemption period is available after a particular state's most commonly used foreclosure process. Note that some states allow redemption after a different kind of foreclosure, which might not be the most common foreclosure process in that state.

For example, in the following chart, the most common foreclosure process in Washington is nonjudicial and there is no right of redemption. However, if a foreclosure in Washington is judicial, there is a right of redemption. The chart doesn't cover judicial foreclosures in Washington because judicial foreclosures rarely happen there.

So, if your foreclosure is different than what usually happens in your state, you'll have to do some additional research because the chart doesn't cover those situations.

Financial and Legal Barriers to Redemption

In practice, borrowers rarely redeem prior to or after a foreclosure sale. The primary obstacle is financial. For most people, raising the substantial amount necessary to redeem is extremely difficult, especially if a financial hardship led to the foreclosure in the first place. Missed mortgage payments and foreclosure proceedings often damage credit scores, making it nearly impossible to secure new financing to cover the redemption amount.

Also, state redemption laws give strict deadlines to redeem. In most cases, homeowners must act quickly and navigate specific legal and procedural requirements, which can be difficult without professional help.

In some states, homeowners have the option to sell their redemption rights, but this too requires careful consideration and negotiation. Because redemption period laws vary widely from state to state, seek reputable housing counseling or legal advice, and explore all available alternatives to foreclosure as early as possible.

Alternatives If Redemption Isn't Possible

Again, most people facing foreclosure have trouble finding enough money to redeem their home. Instead of redeeming, considering applying for a foreclosure alternative before the sale. Most lenders offer loss mitigation options, like modifications, to borrowers struggling to make their mortgage payments.

But you must apply for help before the foreclosure sale happens. It's a good idea to apply for a foreclosure avoidance option as early in the process as possible. Under federal mortgage servicing laws, if you submit a complete application more than 37 days before a sale, the servicer generally has to put the foreclosure on hold while evaluating your application.

When to Talk to a Lawyer

To learn more about the post-sale redemption period where you live and in your situation, consider talking to a local foreclosure attorney. It's also a good idea to speak to a lawyer if you plan on redeeming your home to make sure you follow all required procedures.

If you need information about different ways to avoid a foreclosure, consider talking to a HUD-approved housing counselor.