Also known as: rights to redemption · right of redemption · rights of redemption · equity of redemption
Written by attorneys · grounded in primary & secondary sources — see below
2 senses
The mortgagor's right to redeem the property by paying the debt before foreclosure. Any agreement that unreasonably restricts or waives that right is void as against public policy.
The right of the mortgagor or junior lienholders to redeem the property after a foreclosure sale by paying the sale price plus interest and costs within a statutory period. This right is distinct from the equity of redemption and exists only where state law provides it.
Each sense below has its own examples, sources, and questions.
The mortgagor's right to redeem the property by paying the debt before foreclosure. Any agreement that unreasonably restricts or waives that right is void as against public policy.
Rita Russell granted a mortgage on her warehouse to Redwood Bank under a title-theory jurisdiction. When Rita missed payments, the bank claimed immediate ownership and refused her tender of the full debt. The court held that Rita retained only the equity of redemption and could still pay the debt to reclaim title before any foreclosure sale.
Ridgeway Partners granted a security interest on equipment located partly in two states that shared identical redemption rules. When default occurred, the court aggregated the contacts and applied a single state's redemption law to determine whether the debtor could reclaim the collateral by paying the obligation.
Rosa Ruiz defaulted on a mortgage held by Riverstone Manufacturing. The lender initiated judicial foreclosure and obtained a sale order. Once the sale occurred, Rosa's equity of redemption ended and she could no longer tender payment to recover the property.
Regina Robinson signed a mortgage and a side letter stating that any missed payment would automatically transfer title to the lender with no further redemption opportunity. After a single default the lender recorded a deed. The court voided the side letter as an impermissible clog on Regina's equity of redemption and allowed her to pay the debt and reclaim the property.
The equity of redemption allows the mortgagor to pay the debt and reclaim the property before foreclosure. Statutory redemption permits redemption after the foreclosure sale by paying the sale price plus interest and costs within a statutory period. The two rights are distinct and not all states provide statutory redemption.
Yes. An agreement that makes redemption impossible or converts the security into an absolute conveyance upon default is void as against public policy. Courts invalidate such provisions to preserve the mortgagor's opportunity to pay the debt and recover the property.
When the parties intend the deed only as security for a debt, courts treat it as an equitable mortgage. Parol evidence is admissible to show that intent. The grantor retains the equitable right to redeem by paying the obligation, and the grantee must reconvey upon tender.
The right of the mortgagor or junior lienholders to redeem the property after a foreclosure sale by paying the sale price plus interest and costs within a statutory period. This right is distinct from the equity of redemption and exists only where state law provides it.
Ryan Roberts lost his commercial building at a foreclosure sale to Radiance Media. State law granted a sixty-day statutory redemption period. Ryan paid the sale price plus interest and costs within that window and regained title, leaving the purchaser subject to the redemption right until the period expired.
Foreclosure terminates the equity of redemption. After the sale the mortgagor generally cannot redeem by paying the original debt. In states that provide statutory redemption the mortgagor may still redeem by paying the sale price plus interest and costs within the statutory period.
Under the title theory the mortgagee holds legal title and the mortgagor has only the equity of redemption. Under the lien theory the mortgagor retains title and possession until foreclosure. The intermediate theory blends both approaches. These theories control possession, rents, and foreclosure procedure.