Posted on: 13th Sep, 2006 04:42 pm
i am purchasing a foreclosed property from the bank for cash. in alabama there is a 1 year right of redemption. should the original owner excercise their right of redemption, do i lose the money i paid for the property? would a quit claim deed protect me and release me from the 1 year provision or should i purchase a redemption bond?
Hi Guest,
In Alabama, a borrower in loan default has 1 year period for the right of redemption. This means, after a year, if the borrower can pay off the entire debt along with redemption interest at a rate of 12% (for Alabama), he can regain the possession of the property.
Within the one year redemption period, a purchaser at the foreclosure sale can possess the property but he can only get the legal title after a year and that too, if the original owner (or borrower) fails to repay the debt against the house.
If the owner is able to pay off mortgage along with redemption interest, he can take back his property. The purchaser will then have to lose his rights on the property.
Thanks
In Alabama, a borrower in loan default has 1 year period for the right of redemption. This means, after a year, if the borrower can pay off the entire debt along with redemption interest at a rate of 12% (for Alabama), he can regain the possession of the property.
Within the one year redemption period, a purchaser at the foreclosure sale can possess the property but he can only get the legal title after a year and that too, if the original owner (or borrower) fails to repay the debt against the house.
If the owner is able to pay off mortgage along with redemption interest, he can take back his property. The purchaser will then have to lose his rights on the property.
Thanks
yeah, there is a chance that you may lose the money paid for the property.
Hi,
I don't think a quit claim deed or redemption bond can be much effective in your situation because law states that after a one year period, the purchaser has to leave the property if the original owner can clear his debt with redemption interest.
Thanks,
Sara.
I don't think a quit claim deed or redemption bond can be much effective in your situation because law states that after a one year period, the purchaser has to leave the property if the original owner can clear his debt with redemption interest.
Thanks,
Sara.
If original owner can somehow pay off the mortgage, doesthat mean
the whole amount of mortgage plus redemption interest?
If the original owner has lost the home to foreclosure, wouldn't be hard for them to borrow the money to pay off the whole mortgage?
the whole amount of mortgage plus redemption interest?
If the original owner has lost the home to foreclosure, wouldn't be hard for them to borrow the money to pay off the whole mortgage?
I foreclosed on a person purchasing my property, I was holding the morgage. Soon after I resold the property holding the mortgage. I tried to sell my mortgage to an investor who got an opinon from a law firm. the only way the investor would purchase my mortgage was with a Redemption Bond but said it would be better to wait for the one yr to pass.
hello...as per my thinking you will not get any loss of mony if you are going with that as you say you are going to buy it from the bank then .. i think bank know all things about that ... you can get advise from that bank.. bank give them notice before redemption... so i dont think u get any problem....
thank you
thank you
Can you live in the property that foreclosed even though you have 1yr right of redemption?
Hi chrisw,
It depends on your state laws if you will be allowed to live in the property during the period of redemption. Generally, during this period you are given the legal right to buy the property back on payment of a certain sum of money. You may also be allowed to stay in the property till the time the redemption period is over. You can consult a foreclosure attorney and check out what your state laws say about this.
It depends on your state laws if you will be allowed to live in the property during the period of redemption. Generally, during this period you are given the legal right to buy the property back on payment of a certain sum of money. You may also be allowed to stay in the property till the time the redemption period is over. You can consult a foreclosure attorney and check out what your state laws say about this.
Getting a redemption bond is a low cost solution to address risk. Although the frequency of redemption in Alabama is historically low, you should know the risks.
Under the Code of Alabama, Title 6 — CIVIL PRACTICE, Chapter 5, Section 6-5-248, Who may redeem; priorities: states the following-
(a) Where real estate, or any interest therein, is sold the same may be redeemed by:
(1) Any debtor, including any surety or guarantor.
(2) Any mortgagor, even if such mortgagor is not personally liable for payment of a debt.
(3) Any junior mortgagee, or its transferee.
(4) Judgment creditor, or its transferee.
(5) Any transferee of the interests of the debtor or mortgagor, either before or after the sale. A transfer of any kind made by the debtor or mortgagor will accomplish a transfer of the interests of that party.
(6) The respective spouses of all debtors, mortgagors, or transferees of any interest of the debtor or mortgagor, who are spouses on the day of the execution, judgment, or foreclosure sale.
(7) Children, heirs, or devisees of any debtor or mortgagor.
(b) All persons named or enumerated in subdivisions (a)(1) through (a)(7) may exercise the right of redemption granted by this article within one year from the date of the sale.
(c) When any judgment creditor or junior mortgagee or any transferee of a judgment creditor or a junior mortgagee redeems under this article, all recorded judgments, recorded mortgages and recorded liens having a higher recorded priority in existence at the time of the sale are revived against the real estate redeemed and against the redeeming party and such shall become lawful charges pursuant to Section 6-5-253(a)(4) to be paid off at redemption.
Once any lienholder, recorded judgment creditor, or junior mortgagee is paid the amount of such person's debt and any accrued interest and other contractual charges, such person has no further right to redeem.
Any lienholder, recorded judgment creditor, or junior mortgagee with a lower recorded priority may redeem from those having a higher recorded priority who have redeemed.
(d) When any debtor, mortgagor, their transferees, their respective spouses, children, heirs, or devisees redeem, all recorded judgments, recorded mortgages, and recorded liens in existence at the time of the sale, are revived against the real estate redeemed and against the redeeming party and further redemption by some party other than the mortgagor or debtor under this article is precluded.
(e) When any debtor or mortgagor conveys his interest in property subject to a mortgage prior to sale wherein they are released from liability for the debt, his right of redemption under this article is terminated. In the same manner, the right of redemption granted under this article to the spouses, children, heirs, or devisees of debtors or mortgagors terminates when the debtors or mortgagors have conveyed their interests in the property and are released from liability for the debt.
However, where debtors or mortgagors have conveyed their interests in the property but remain liable on the debt and are debtors at the date of the foreclosure sale, the debtors and mortgagors retain their right of redemption under this article and in the same manner, their spouses, children, heirs or devisees continue to be entitled to the right of redemption under this article.
(f) A redemption made by any person under this article, other than the debtors or mortgagors, and their respective spouses, children, heirs, or devisees, shall preclude any further redemption by such person.
(g) Subject to subsection (e), a mortgagor and debtor have priority over any other redeeming party and a mortgagor has priority over a debtor.
(Acts 1988, No. 88-441, p. 647, §2.)
Call Yellowhammer Insurance Agency for your Title Redemption Bond @ 800-594-2357
Under the Code of Alabama, Title 6 — CIVIL PRACTICE, Chapter 5, Section 6-5-248, Who may redeem; priorities: states the following-
(a) Where real estate, or any interest therein, is sold the same may be redeemed by:
(1) Any debtor, including any surety or guarantor.
(2) Any mortgagor, even if such mortgagor is not personally liable for payment of a debt.
(3) Any junior mortgagee, or its transferee.
(4) Judgment creditor, or its transferee.
(5) Any transferee of the interests of the debtor or mortgagor, either before or after the sale. A transfer of any kind made by the debtor or mortgagor will accomplish a transfer of the interests of that party.
(6) The respective spouses of all debtors, mortgagors, or transferees of any interest of the debtor or mortgagor, who are spouses on the day of the execution, judgment, or foreclosure sale.
(7) Children, heirs, or devisees of any debtor or mortgagor.
(b) All persons named or enumerated in subdivisions (a)(1) through (a)(7) may exercise the right of redemption granted by this article within one year from the date of the sale.
(c) When any judgment creditor or junior mortgagee or any transferee of a judgment creditor or a junior mortgagee redeems under this article, all recorded judgments, recorded mortgages and recorded liens having a higher recorded priority in existence at the time of the sale are revived against the real estate redeemed and against the redeeming party and such shall become lawful charges pursuant to Section 6-5-253(a)(4) to be paid off at redemption.
Once any lienholder, recorded judgment creditor, or junior mortgagee is paid the amount of such person's debt and any accrued interest and other contractual charges, such person has no further right to redeem.
Any lienholder, recorded judgment creditor, or junior mortgagee with a lower recorded priority may redeem from those having a higher recorded priority who have redeemed.
(d) When any debtor, mortgagor, their transferees, their respective spouses, children, heirs, or devisees redeem, all recorded judgments, recorded mortgages, and recorded liens in existence at the time of the sale, are revived against the real estate redeemed and against the redeeming party and further redemption by some party other than the mortgagor or debtor under this article is precluded.
(e) When any debtor or mortgagor conveys his interest in property subject to a mortgage prior to sale wherein they are released from liability for the debt, his right of redemption under this article is terminated. In the same manner, the right of redemption granted under this article to the spouses, children, heirs, or devisees of debtors or mortgagors terminates when the debtors or mortgagors have conveyed their interests in the property and are released from liability for the debt.
However, where debtors or mortgagors have conveyed their interests in the property but remain liable on the debt and are debtors at the date of the foreclosure sale, the debtors and mortgagors retain their right of redemption under this article and in the same manner, their spouses, children, heirs or devisees continue to be entitled to the right of redemption under this article.
(f) A redemption made by any person under this article, other than the debtors or mortgagors, and their respective spouses, children, heirs, or devisees, shall preclude any further redemption by such person.
(g) Subject to subsection (e), a mortgagor and debtor have priority over any other redeeming party and a mortgagor has priority over a debtor.
(Acts 1988, No. 88-441, p. 647, §2.)
Call Yellowhammer Insurance Agency for your Title Redemption Bond @ 800-594-2357
if the be second mortgage or previous owners must pay all fees and everything why do people buy redemption bonds.