RIGHT OF REDEMPTION

In judicial foreclosures, in which the lender may obtain a deficiency, and has not waived that right, the borrower, or his or her successor-in-interest, is permitted to “redeem” the property: to buy it back, by tendering the amount paid in the foreclosure sale, plus interest. Code of Civil Procedure 729.010 to 729.090. If, after the fair value hearing, there is, in fact, no deficiency, the borrower has three months in which to redeem the property. If there is a deficiency, however, the borrower has up to one year to redeem the property.

The right of redemption cannot be waived, at the time that the loan is made. It can, however, be waived, at a later time, if the borrower receives some independent consideration in exchange for the waiver.

As long as the redemption period lasts, the new owner of the property, who purchased it at the foreclosure sale, does not have full ownership of the property; he or her ownership is subject to being set aside by the borrower’s redemption rights.

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