statutory right of redemption

statutory right of redemption

A right given in some states for mortgage debtors to repurchase their property after foreclosure and before expiration of the allowed time period.The same rights are also sometimes given to spouses and other creditors of the debtor. In order to redeem, the former owner must pay the full bid price at the foreclosure,plus interest.Under some statutes,the right can be lost if the property owner does not vacate the foreclosed property within a certain time period after receiving notice from the purchaser.Rights of redemption may be bought and sold.

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Data on loss rates incurred by PMIs over the period 1980-1986 reveal that a judicial foreclosure requirement and a statutory right of redemption add significantly to mortgage risk.
The existence of the statutory right of redemption has the additional effect of reducing the interest of potential buyers of the property at a foreclosure sale, lowering the liquidation price that the lender would otherwise receive.
In summary, because a judicial procedure and a statutory right of redemption lengthen the foreclosure process and delay the liquidation of the property, losses are greater in states which require the former and grant the latter.
At the time of the study, Illinois had a judicial procedure and a one-year statutory right of redemption.
the result is that claims paid by private mortgage insurers, I, will be greater states require a judicial procedure, provide for a statutory right of redemption, and prohibit deficiency judgments.
j] = dummy variable equal to one if a state has a statutory right of redemption and zero otherwise (alternatively, the length of the statutory right of redemption is included),
Equation 3 was tested employing, alternatively, a dummy variable for the presence of a statutory right of redemption and the length of the statutory right to redemption (in months) as one of the three legal variables of interest.
Given that the average length of a statutory right of redemption where it exists is ten to 12 months, the coefficients on the alternative forms of this variable are consistent.
In 1986 approximately 30 percent of insurer's risk-in-force was allocated to states with a statutory right of redemption.
The Act encourages the use of the non-judicial foreclosure procedures, eliminates the statutory right of redemption, and makes uniform the use of a deficiency judgment.
Since the FHA rules for the administration of home mortgages provide for the termination of a statutory right of redemption for delinquent loans where a deed-in-lieu of foreclosure is obtained, FHA losses may be ameliorated.