Every time you miss a mortgage payment, you inch closer to losing your house. You might slide by for six months or more before your mortgage company forecloses. By then, catching up is a stretch, and the sheriff puts your home up for sale to the highest bidder. After that, you get one last chance to get your house back during the redemption period -- but only if you live in a state that has one.
The redemption period for foreclosures is a grace period that gives you a little breathing room and time to fix your finances. You have to use this break to come up with a plan to save your home. During a redemption period, you can continue to live in your home, unless your state law says otherwise. The successful bidder at the sheriff’s sale can't start measuring the windows for curtains or make you move until the redemption period expires.
State Redemption Laws
You are flat out of luck and soon to be out of doors if you live in any of the states that have no redemption period. Roughly half of all states and U.S. possessions give homeowners the boot as soon as a sheriff's sale is final. Say a tearful goodbye to your house, start packing and rent a moving truck in Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Indiana, Louisiana, Maryland, Massachusetts, Mississippi, Nebraska, Nevada, New Hampshire, New York, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Texas, Utah, Vermont, Virginia, West Virginia and Wisconsin, according to the Connecticut General Assembly. Although Puerto Rico has great beaches, this island of sunshine has no foreclosure redemption period. If you are fortunate enough to have bought a home in the remaining states, the Virgin Islands or the District of Columbia, you get a second chance with redemption periods that range from a few days to two years after a confirmed sheriff's sale.
After a foreclosure sale, the cost to redeem your home skyrockets. By the time your home passes through the sheriff's hands, you are looking at paying your original loan amount plus various and sundry fees that get tacked onto it by any and everybody that participates in your foreclosure debacle. To get your house back, you must absorb court costs, interest and late fees and attorney's fees that can run what you owe up by thousands more. To avoid living under a bridge when your redemption period clock runs out, you have to work overtime to get a new mortgage on that house you love.
Economic distresses such as job loss, prolonged illnesses and medical bills or the loss of the primary breadwinner are common causes of mortgage defaults. Fixing the financial problem that led to your foreclosure helps you convince potential lenders that you are credit-worthy and increases your options for redeeming your house.
Carol Luther has more than 25 years of business, technology, and freelance writing experience. She has held leadership roles in higher education management, international development, adult education, vocational education, and small business support programs