Rules When Selling a Home when in forclosure

By
Mortgage and Lending

 

 

 

 

Be careful when listing a home, going thru the foreclosure process and is currently in a "redemption period". A redemption period is the time given to the property owners to come up with ALL of the money to pay off the balance of their mortgage, the attorney fees and any unpaid interest.

 

Yes, you can sell the home during the redemption period, but the following conditions must apply:

 

1. Property must be in a state where it is common & customary to sell a home in redemption.

 

2. Title insurance must contain a specific exception for the right of redemption and insure

 

against all loss arising out of the exercise of an outstanding redemption.

 

3. If redemption is exercised, the mortgage must be paid off directly out of the redemption

 

proceeds with no further action or claim for repayment.

 

4. The lender must warrant that Fannie, Freddie, FHA and VA will not incur any loss.

 

Each state has its own laws regarding foreclosure and redemption --this can be a tricky

 

business.

 

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