GETTING YOUR HOUSE BACK: RIGHT OF REDEMPTION IS WORTH A TRY

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see http://www.bankrate.com/finance/real-estate/get-house-back-after-foreclosure.aspx

There are numerous ways to reverse or cure the foreclosure process. We have outlined legal procedures to vacate judgements, set aside the sale etc. in other articles. One way that we have not explored in depth is the right of redemption. The government sponsored entities (GSEs) have long had a policy of not allowing the borrower to bid on the property at auction or even allowing the borrower to buy the house after it is foreclosed. This policy has been followed industry wide. Martha Coakley Attorney General in Massachusetts has filed a lawsuit to prohibit this practice and allow borrowers or charitable organizations to front the money to get the house back for the homeowner.

The banks are fighting this tooth and nail because of their fear of liability from insurers, investors, guarantors and counterparts on hedges like credit default swaps — all vehicles for the effective sale of the same loan over and over again. This means they could have a liability for as much as 5-10 times the stated amount on the note. So they want the foreclosure sale even if it nets nothing and the property is abandoned.

But in the end this about money between a debtor and creditor. Both are getting screwed by the current policies, which continue to protect the big banks from massive liabilities rivaling the entire GDP of the Untied States. And many states allow for rights of redemption by statute and even in the states that don’t allow redemption (in exchange for a statutory waiver of a deficiency judgment) there are common law actions that might be present to allow the homeowner to redeem or reacquire the the title to the home. The problem I see is that if the foreclosure was fraudulent to begin with and/or the initial origination was fraudulent and faked, the title of the homeowner will remain clouded absent some legislative adjustment in what title means after considering the variables present when there are claim of securitization whether true or not.

Most Judges will agree that if you offer to redeem the property for the amount demanded, you should be allowed to do so. And there is frequently a process by which a borrower can apply to the court for a hearing on the amount of the redemption when the bank balks at giving the information (which is nearly always now).

My point is that even after the foreclosure judgment or foreclosure sale, don’t give up. See an attorney licensed in the geographical area in which your property is located and ask him or her to do the research and let you know what your options include and what is excluded procedurally.

Tags: foreclosure, redemption
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