Foreclosure can I get my house back?

Recently on our bankruptcy forum a user asked, “If my home has been sold through auction is there a way that I can get my property back?” Some states allow property owners who have lost their homes in a foreclosure to regain their property through a process known as statutory redemption. State laws vary, which means the amount of time you have to reclaim or redeem the property can vary, as well as the process for redemption.

Consider, however, not all states allow for the statutory right of redemption after foreclosure. For instance, in the state of Texas a property generally cannot be redeemed after foreclosure even if you are able to pay off the principal balances and additional interest costs (exceptions exist if the sale was for unpaid taxes or for HOA foreclosure of an assessment lien).

Iowa, however, does allow redemption if it is within one year judicial foreclosure sale or six months after the sale, if agreed upon in the mortgage documents and the lender waives a deficiency. Redemption, however, is not allowed after alternative nonjudicial foreclosure.

What is statutory redemption?

Assuming your state allows a statutory redemption, you may be able to construct a written demand and submit it to the property purchaser. This demand requests the statement of the charges required to redeem and reclaim the property. After the new property owner receives the demand letter they must answer within a specified amount of time and give the requester an itemized statement of charges.

If the original homeowner does not have the funds to pay the redemption price they will lose the right to the property, and the new buyer will be given all rights and interests to the home. The original homeowner must evacuate the property.

How long do I have the right to redeem the property?

It is important to review your state’s redemption laws because laws vary by state. In states, which allow for redemption, the original homeowner will retain possession of the property during the redemption period, which may range from 30 days to two years. Redemption periods may be lowered if the original homeowner no longer resides in the home.

Stopping a foreclosure

If you have missed several mortgage payments and the mortgage holder has threatened to sell your property there may be several steps you can take to avoid foreclosure. Common steps you can take can include refinancing the home, a forbearance plan, a deed in lieu of foreclosure, a partial claim, a short sale, a loan modification, or bankruptcy.

Claimants who choose bankruptcy should talk to a bankruptcy lawyer. Filing Chapter 7 may not be enough to protect your home. In fact, many bankruptcy filers will need to File Chapter 13 bankruptcy and create a 3 or 5 year bankruptcy repayment plan to ensure their property is protected. Chapter 13 bankruptcy does not, however, eliminate secured debt. Secured debt, such as your mortgage payments must be kept current or the bank may proceed with the foreclosure process.

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Beth

Beth L. is a content writer for Better Bankruptcy. Good content and information is one of many methods we utilize to bring you the answers you need.