Right Of Redemption
Categories: Ethics/Morals
You buy a house. Then your company, which refurbishes pinball machines, goes bust. You can't pay the mortgage. The bank starts foreclosure proceedings. Just before the process closes and you lose the house, you make a big sale to Flipper Smack Palace, a new pinball arcade in your town. You now have enough to pay what you owe on the house.
But...is it too late? They already started the foreclosure process. Can you just hand over the money you owe and keep the house?
Typically, the answer is "yes." That situation defines the right of redemption. It's the legal doctrine which says that a debtor who is having their real property seized for a debt (like your house in the case of a mortgage foreclosure) can reclaim the property by paying off what they owe. It prevents the bank from taking your house if you send in your mortgage payment a day or two late. As long as you come up with the money before the process closes, you can redeem the property by getting current on the debt.
