Foreclosure Question - Posted by Cire

Posted by JT-IN on April 16, 2002 at 13:16:06:


I would tend to doubt that a property “never” gets redeemed. Does this Atty who you mentioned, specialize in the process of foreclosures…?

There are undoubtedly going to be cases where the price at auction and the encumbrance are far apart, leaving a buying opportunity for someone, or just reasons for the owner to redeeem the property themselves.

If the Atty is close to correct, and owners hardly ever redeem, and assuming that the buyer gets the 12% interest paid, then the investor buying a Sheriff Sale is fairly well protected. On the other hand, 12 months redemption rights would leave some folks out of the buying process, that could/would not assume the added risk that this can pose. Does the buyer get a deed in this redemption period… Probably not, so this leaves out those needing a mortgage to buy, clearing the way for serious cash buyers… (However, I do not know the local customs for full payment, deed issued, etc.)

AS to the homeowner being protected, probably only in the sense that they could sell their redemption rights… (of course they could redeem, but if they could, they would have done so before now, usually) over such a span of time.

There could be some opportunities that are not being realized, by not maximizing the use of this redemption period. It would be my bet, as an experienced FC buyer, that an investor could make a nice living off of these redemptions, and nothing else.

Just the way that I view things…


Foreclosure Question - Posted by Cire

Posted by Cire on April 16, 2002 at 08:03:00:

I talked to attorney last week to get the skinny on foreclosures in my state, Alabama. He told me there is a one year redemption right. The person who redeems the property has to pay the past due amount, all legal fees acrued, and any necessary improvements to the property. 12% interest is added in on top of that. He said he didn’t know of any cases of the original owner ever redeeming a property in 20 years of practice. How does the rate in scheme of things? Investor protected or foreclosee protected? Anyway to leverage these rights and use to an investors advantage?