Redemption:
- Redemption in equity: Equitable redemption is universally recognized up to the date of sale. At any time prior to the foreclosure sale debtor has the right to redeem, freeing the land of the mortgage.
Once a valid foreclosure has taken place, the right to equitable redemption is gone.
The right of equitable redemption is exercised by paying off the missed payments, plus interests and costs.
If mortgage/note contains an acceleration clause (permits the mortgagee to declare the full balance due in the event of default), the full balance + interest + cost must be paid to redeem.
A debtor/mortgagor may not waive the right to redeem in the mortgage itself. (Clogging)
Clogging—closing the equity of redemption. It is PROHIBITED.
- Statutory redemption: – gives the debtor-mortgagor a statutory right to redeem for some fixed period after the foreclosure sale has occurred (usually 6 months to 1 year). Where recognized, statutory redemption applies only after the foreclosure. The amount to be paid is usually: The foreclosure sale price—rather than the amount of original debt.
In most states to recognize statutory redemption, the mortgagor will have the right to possess Blackacre during the statutory period.
When a mortgagor redeems, the effect is to nullify the foreclosure sale—the redeeming owner is restored to title.