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Friday's ForeclosureFocus FYI Blog: Right of Redemption

In some states, following a forced, foreclosure sale, the former homeowner has a Right of Redemption which means he or she can restore ownership by paying, in full, the total amounts due within a specific period of time. The amount of time during which the ROR can be exercised ranges from NONE, in states which do not provide ROR, to 6 months or in some cases, even a year in the states that respect a right of redemption.

In New Jersey, a judicial mortgage foreclosure state, there is an implied 10 day Right of Redemption following Sheriff's Sale. Should the former homeowner present to the Sheriff a cashiers check in the full amount due the Plaintiff (typically the foreclosing mortgagee) including costs of sale, any advances, and additional interest, the deed of ownership is returned to the former owner. In most situations, any junior liens, including second mortgages which would have been extinguished by the foreclosure sale, are reinstated.

Most often, the foreclosed homeowner cannot obtain new/replacement financing needed to exercise the right of redemption. Sometimes, the former homeowner can sell or assign the right of redemption to a third party who would then present the necessary funds to satisfy the redemption costs.

The third party could be a friend, family member, or a speculative investor.

Next Friday's FYI ForeclosureFocus Blog: Preforeclosure Sale and Leaseback

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Posted by David Petrovich on 03/09/2007 03:14 PM

Comments (7)

right of redemption, preforeclosure, sale and leaseback, sheriffs sale

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7 Comments on Friday's ForeclosureFocus FYI Blog: Right of Redemption

MAR

2007

thanks David! Always useful information.

David, This is very good information. Thanks for your input.

When is a sheriff's deed recorded at the county? Is it after the 10 day right of redemption, or is it recorded directly after the conveyance from the sheriff?

I've been following the amount of LP's being filed since September (in cape may county), as well as the amount of Sheriff's deeds. There doesn't seem to be very many sheriff's deeds in proportion to the amount of foreclosures.....

Any comments?

In NJ, the Sheriff's Deed isn't recorded until after the 10 day ROR has expired.

A Lis pendens signifies the commencement of foreclosure proceedings, while the Sheriff's Sale certainly seems be quite near its completion. The process can take up to a year depending on what obstacles the homeowners can toss in the lender's path, and what non foreclosure alternatives they may successfully employ.

MAR

2007

David, thanks...

Are you finding that there are less properties going to sheriff's sales than in previous years? Based on a proportionate level?

"Papaya"

On average for the last 10 years, NJ sees more than 15,000 foreclosures each year.

Usually, a very low percentage of homes in foreclosure make it to Sheriff's Sale.

An informed and motivated Homeowner can do a lot in a year to avoid Sheriff's Sale.

I think, however, we'll be seeing an increase in the number of homes being sold at Sheriff's Sale...

even if the lender ends up taking back the house.

MAR

2007

David,

Hi thanks for the info on the foreclosure blog. i really liked reading it and would like to ask you if you would join my group and post your blogs there. Thanks in advance

KENTUCKY PROFESSIONALS

Ben

Sure, thanks for the invite. If you have a particular topic of discussion relating to the foreclosure condition in Kentucky you feel your Group would appreciate, please let me know.

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