Posted on: 05th Apr, 2010 08:02 pm
we're about to close our new house(foreclose house). But the settlement agent just came back to us that we need to buy redemption bond stated because of the purchase price higher than the price the bank purchased. Is it ture? I also read somewhere said the redemption bond is needed when the loan is more than the price the seller bank purchased. Which is ture? Our loan is acturally lower than what the bank paid after we pay the 20% down. We're pretty upset with this unexpected catch. Is this just Alabama law?
Hi Guest,
As far as I know, a redemption bond is required when you purchase a foreclosed property by borrowing more than the loan amount at the time of the foreclosure. This way, the lender offering you the loan gets the assurance that in case the property is redeemed by the previous owner he (the lender) will not be subject to any loss. Is the amount you are borrowing more than the outstanding balance on the mortgage at the time of foreclosure? In that case a redemption bond would be required.
As far as I know, a redemption bond is required when you purchase a foreclosed property by borrowing more than the loan amount at the time of the foreclosure. This way, the lender offering you the loan gets the assurance that in case the property is redeemed by the previous owner he (the lender) will not be subject to any loss. Is the amount you are borrowing more than the outstanding balance on the mortgage at the time of foreclosure? In that case a redemption bond would be required.
thank jenkin.
I'm not borrowing more than what the house foreclosed for. from what I understand, it was the title insurance company required us to get the redemption bond.
I'm not borrowing more than what the house foreclosed for. from what I understand, it was the title insurance company required us to get the redemption bond.
To watdoiknow,
You're right. The redemption bond is required by the title insurance company. It insures them against any loss due to exercise of right of redemption by the previous owner of the property. The bonding company that issues the redemption bond and insures the title company against loss, may require the buyer to sign as a surety so they can recover the loss from the buyer in case they have to pay a claim to the title insurance company.
You're right. The redemption bond is required by the title insurance company. It insures them against any loss due to exercise of right of redemption by the previous owner of the property. The bonding company that issues the redemption bond and insures the title company against loss, may require the buyer to sign as a surety so they can recover the loss from the buyer in case they have to pay a claim to the title insurance company.
if a redemption bond is required how much is the bond to be for
Hi Billy,
As far as I know, the redemption bond will be of the amount that the lender may lose if the previous owner redeems the property.
Thanks
As far as I know, the redemption bond will be of the amount that the lender may lose if the previous owner redeems the property.
Thanks
How do you calculate the cost of a redemption bond?
Contact a person dealing with bonds and he will assist you in calculating the cost of a redemption bond.