Redemption is a great word. It is a word of hope and salvation. It s a word that speaks forth “the victory is ours.” According to the dictionary, it means “the action of regaining or gaining possession of something in exchange for payment, or clearing of debt.” Another definition is “the action of buying one’s freedom.”
This can be your hope when faced with foreclosure. There are many battles that were fought in our country’s history where the outcome looked grim, but the tide turned and redemption came. It was not about numbers or amounts, but victory came through wisdom and strategy. There are strategies that can help you redeem what appears to be lost or almost lost.
You have options before you foreclose and you may even have an option after foreclosure, depending on the laws of your state. Talk to your lender before they ever use the word foreclosure. The minute you see you may be in a crisis, call. Do your research before you call so you understand words like “loan modification” and “forbearance agreement or contract”.
Loan Modification may work for you if you can currently make your regular payment, but you just can’t catch up the late payments. If this is your present situation, you can negotiate with your lender to fold any past due payments into the unpaid principal balance. This would include interest and escrow if you escrow.
Forbearance Agreement or Contract is a default prevention tool that is offered to borrowers that permits an extension of time. It is the least costly workout alternative. It allows you, the borrower, to repay past due payments within a structured period of time. This must be in writing. The lender would set up a repayment plan based upon your finances and may even temporarily reduce or suspend your mortgage payments.
There may also be an option after you have foreclosed. It is called “redemption.”
Redemption is a period after your home has already been sold at a foreclosure sale when you can still reclaim your home. In order to reclaim your home you will need to pay the outstanding mortgage balance and all costs incurred during the foreclosure process.
Many states have some type of redemption period. The redemption period and availability may be determined by whether the foreclosure was judicial or non-judicial. Judicial foreclosures are processed through the courts, beginning with the lender filing a complaint and recording a notice of lis pendens. Non-judicial foreclosures are processed without court intervention, with the requirements for the foreclosure established by state statutes. You can research these in more depth online.
Timelines and procedures for redemption can vary greatly from state to state. Each state is different. You will need to research your states foreclosure laws to see how long that season of time actually is.
There is redemption for foreclosure before and maybe even after. If you feel in bondage to that word “foreclosure” you may find redemption, the ability to buy your freedom back, to keep your beloved home.