The right of redemption is the fundamental legal right of a borrower to redeem the mortgaged property. Each state has different laws when it comes to the right of redemption and foreclosures in general. Listed below are some of the rights that are available. The mortgagor can exercise these rights on or before the date of disclosure:
– after foreclosure on payment of a penalty
– even after foreclosure sale by paying off in full the outstanding debt, plus all charges, plus penalties.
What are the rights of redemption in the state of Rhode Island? Rhode Island does not have a a right of redemption in non-judicial foreclosures. Non-judicial foreclosures are those foreclosures that do not require court actions. This is the most common type of foreclosures that are used in title theory states, in which a trustee or other third party orchestrates a foreclosure sale. These are currently the most common foreclosure processed in Rhode Island.
When the foreclosure process includes a lender going through the court system so a final judgement of foreclosure is entered by the court, it is call a judicial foreclosure. The lender files a complaint in the court referred to as a lis pendens. Lis pendens is a Latin phrases that means “pending legal action”. This lets all parties involved and third parties who may have interest in the foreclosed home and property that there is court action in process. This requires a possessory action. The lender must formally take possession of the property before a witnesses who will provide a notarized certificate of possession.
In some cases with a judicial foreclosure, the borrower can file suit for rights of redemption. The law is very complicated and unclear in this area. The use of a specialize attorney is probably the best option to exercise this option. It would require full payments and penalties.
In 2010 because of issues with home loans and mortgage problems in the United States, some new laws regarding foreclosure. Rhode Island included the following change in Bill 7878: Requires any mortgagee who is commencing foreclosure proceedings on the owner-occupied residential property, to advise the mortgagor of the availability of counseling through Hud-approved mortgage counseling agencies. Failure upon the part of the mortgagee to provide said notice to the mortgagor of this requirement would render the foreclosure void. Counseling between the parties under this sections would be mandatory and at no cost to the mortgagee.
It is clear that current, affordable legal advice is necessary for anyone facing the possibility of foreclosure. This site is a good place to find some options.