Legal Definitions - Right of Redemption

Definition: The right of redemption is a legal right that allows a mortgagor to recover their property after defaulting on their loan and losing their mortgaged property. To exercise this right, the mortgagor must pay their lender the full amount of their unpaid debt, plus any additional default-related fees. The laws governing the right of redemption vary by state and determine whether and how long the right of redemption persists after foreclosure.

Example: In some states, if a homeowner defaults on their mortgage and their property is foreclosed upon, they may still have the right to redeem their property by paying off the full amount of their unpaid debt, plus any additional fees. For example, if a homeowner owes $100,000 on their mortgage and defaults on their payments, their lender may foreclose on their property and sell it at auction. However, if the homeowner exercises their right of redemption, they can reclaim their property by paying the full $100,000 plus any additional fees.

Explanation: The example illustrates how the right of redemption works in practice. If a homeowner defaults on their mortgage and loses their property, they may still have the opportunity to reclaim it by paying off their debt. This right is governed by state law and varies depending on the state in which the property is located.