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I am purchasing a foreclosed property from the bank for cash. In Alabama there is a 1 year right of redemption. Should the original owner excercise their right of redemption, do I lose the money I paid for the property? Would a [url=http://www.mortgagefit.com/quitclaim-deed.html]Quit Claim deed[/url] protect me and release me from the 1 year provision or should I purchase a Redemption Bond?

helping_user's picture
helping_user | Joined: March 31, 2006 03:39 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Guest,

In Alabama, a borrower in loan default has 1 year period for the right of redemption. This means, after a year, if the borrower can pay off the entire debt along with redemption interest at a rate of 12% (for Alabama), he can regain the possession of the property.

Within the one year redemption period, a purchaser at the foreclosure sale can possess the property but he can only get the legal title after a year and that too, if the original owner (or borrower) fails to repay the debt against the house.

If the owner is able to pay off mortgage along with redemption interest, he can take back his property. The purchaser will then have to lose his rights on the property.

Thanks

Like | Dislike | Share | Posted: Wed, 09/13/2006 - 21:11 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

yeah, there is a chance that you may lose the money paid for the property.

Like | Dislike | Share | Posted: Wed, 09/13/2006 - 21:14 | Post subject:

sara's picture
sara | Joined: July 5, 2006 03:16 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi,

I don't think a quit claim deed or redemption bond can be much effective in your situation because law states that after a one year period, the purchaser has to leave the property if the original owner can clear his debt with redemption interest.

Thanks,

Sara.

Like | Dislike | Share | Posted: Wed, 09/13/2006 - 21:24 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

If original owner can somehow pay off the mortgage, doesthat mean
the whole amount of mortgage plus redemption interest?

If the original owner has lost the home to foreclosure, wouldn't be hard for them to borrow the money to pay off the whole mortgage?

Like | Dislike | Share | Posted: Tue, 02/10/2009 - 12:09 | Post subject:

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