Word of the Day – The Language of Real Estate

Equity of Redemption
Paying off the loan (secured by a mortgage or deed of trust), in full.
The right of a mortgagor or trustor, after a judicial foreclosure, to reclaim property forfeited due to default on the Mortgage Note/Promissory Note. Equity of Redemption period, following a judicial foreclosure sale, is typically 1 year.
During this period, the mortgagor/trustor can redeem the property by paying the full debt plus interest and costs. Any attempt to have the mortgagor waive the equity of redemption is unenforceable and void as being contrary to public policy.
Equity of redemption has been held to be an interest in real estate and is thus affected by the ordinary laws and rules concerning conveyances, including the statute of frauds.
Any right to redeem after a foreclosure sale must be created by state statute.
In those states that permit a power of sale to be inserted in the mortgage document/deed of trust, most foreclosures of property are conducted pursuant to the nonjudicial foreclosure statute. Upon a foreclosure/trustee sale, the equity of redemption is terminated.

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