The lender that financed your home purchase technically has an interest in your property until you completely pay off your existing mortgage. If you miss a few payments, you may face aggressive collection efforts, which make culminate in foreclosure proceedings.
Your lender will send you written notice advising you of the missed payments and what may happen if you fail to bring the mortgage back into good standing. Eventually, they can take you to court to finalize the foreclosure and assume ownership of the home.
One of the rules protecting you from the loss of the home where you live is the theoretical right to redemption during the foreclosure process and after a foreclosure sale. What do you need to know about redemption options?
There is a limited window of opportunity
For many buyers capable of liquidating other assets or securing alternate financing, redeeming a property before the foreclosure goes to court will typically be the best option. However, many people are not in a situation where they can immediately address their current financial hardship.
In theory, Tennessee state law gives you the option of redeeming a property for up to two years even after the lender sells it in a foreclosure sale to someone else. However, it is quite common for lenders to use special paperwork to prevent you from making full use of those protections.
Many deeds, specifically deeds of trust, executed as part of a property acquisition transaction, will include a clause giving the lender the right of sale when the buyer falls behind on their payments. In other words, you may unknowingly waive your right to redeem the property after its sale and will only be able to redeem it before the foreclosure process is complete.
Foreclosure defense can help save your home
Rather than hanging all of your hopes on the possibility of securing financing or obtaining the necessary capital to pay off the remaining principal balance on your mortgage, it is often a better choice to defend against the foreclosure process when possible.
Stopping foreclosure might involve filing for bankruptcy, proving that your lender violated important technical rules or showing that there has been some kind of accounting. Talking with a lawyer about your financial circumstances and the terms of your mortgage can help you take the appropriate steps to stop an imminent foreclosure.