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JDKR · Nov 29, 2007, 05:12 PM

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Does anyone know once a foreclosure has taken place what the redemption period might be on a non-owner occupied a.k.a. rental / investment property? I know it can vary with lenders - but is there a rule of thumb? What about deed in lieu of foreclosure? If the investment / rental property is being foreclosed upon, and there are renters, do they have to vacate immediately, or is there some type of redemption period on a deed in lieu of foreclosure - basically a timing period before they take actual possession?:confused: :eek:

Fr_Chuck · Nov 29, 2007, 05:54 PM

OK, once it is foreclosed, there is no redemption, after it is sold, the new owner just owns it. You may pay off the lender anytime prior to the foreclosure sale normally.

There is no redeption in deed in lieu, once you sign it over, it is theirs.

On foreclosed property, they will be asked to move at once unless the new owners want renters. Judges have given 3 day to 60 day notice to move on a case by case basis

JDKR · Nov 29, 2007, 05:58 PM

I wonder if they tried to short sale it, and get the foreclosure stalled what would happen then? Is the short redemption because of it being a rental? Even though it is currently rented?

Fr_Chuck · Nov 29, 2007, 06:11 PM

The short sale will not normally stop or stall a foreclosure, ifyou have a short sale offer, you give it to them, and they will normally accept or reject it within 24 hours. I am working with someone right now, they offered a short sale that was within 1000 of the actual loan amount, not the amount with all the charges, extra fees and so on, but they rejected two short sale offers, they have rejected deed in lieu and actually said they will prefer to foreclose.

But at foreclosure once it is foreclosed, it is over, ownership is transferred that day.

JDKR · Nov 29, 2007, 06:20 PM

I have been working with short sales and doing loss mitigation, and have a little knowledge about this arena, but not when working with investment properties, or died in lieu of foreclosure... you seem to know definitely what you are talking about, I just started this business, and am meeting with a client tomorrow regarding their options... so coming from you - are you saying though, that this is because it is non-owner occupied as to why there would basically be no redemption period?

stopforeclosure · Nov 30, 2007, 06:28 AM

Originally Posted by Fr_Chuck

ok, once it is foreclosed, there is no redemption, after it is sold, the new owner just owns it. you may pay off the lender anytime prior to the foreclosure sale normally.

there is no redeption in deed in lieu, once you sign it over, it is theirs.

on foreclosed property, they will be asked to move at once unless the new owners want renters. judges have given 3 day to 60 day notice to move on a case by case basis

You are absolutely incorrect. In Michigan in a few other states there is a redemption period, which in Michigan is 6 months. During redemption period you can do anything you could do prior to foreclosure except give options and loan mods or repays. You can sell, short sale, Deed In lieu. Yes short sale in redemption. Please be careful about advice you may be giving some will believe you and get into trouble and not utalize all of their options

There is truth in the Deed in Lieu, once done it is done but many lenders will still offer option during redemption period.

ScottGem · Nov 30, 2007, 07:23 AM

Originally Posted by stopforeclosure

You are absolutely incorrect. In Michigan in a few other states there is a redemption period, which in Michigan is 6 months. During redemption period you can do anything you could do prior to foreclosure

If this is only in MI and a few other states than chuck is not "absolutely incorrect". Can you site the law in MI (or any state) that allows for a redemption period?

There was just a case in NYS where re-financing was approved but the actual payment was not received until a few hours after the auction was done and the property purchased at that auction. Even though the previous owner had a letter that indicated the deadline was a week in the future. So it seems clear that there is no redemption period in NYS otherwise, this case wouldn't have been an issue.

ScottGem · Nov 30, 2007, 07:26 AM

If the property is a commercial property, then there is probably a clause in the leases that will keep them in force fter a foreclosure. But if its residential property rented out to a single tenant (or maye a 2-3 family home), then the rental leases are voided with the foreclosure.

Dr D · Nov 30, 2007, 08:46 AM

I think that this is one of those murky areas that allows all of the previous posts some degree of correctness. The "Statutory Right of Redemption" does allow the mortgagor to redeem the property for a certain time, after the (judicial) foreclosure has taken place. One of the sites I went to said that about 1/2 of the states have this provision in their law, but I was unable to find a listing by state.

Many states have adopted the Deed of Trust as the security instrument for mortgages, for that reason (no redemption period after sale) and others. It provides many benefits to both the lender and the borrower.

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AK lawyer · May 27, 2010, 11:00 AM

Originally Posted by Dr D

I think that this is one of those murky areas that allows all of the previous posts some degree of correctness. The "Statutory Right of Redemption" does allow the mortgagor to redeem the property for a certain time, after the (judicial) foreclosure has taken place. One of the sites I went to said that about 1/2 of the states have this provision in their law, but I was unable to find a listing by state.

Many states have adopted the Deed of Trust as the security instrument for mortgages, for that reason (no redemption period after sale) and others. It provides many benefits to both the lender and the borrower.

Not murky, just one of those areas where you have to look at the specific law for the state involved.

Yes, many states have a right of redemption for mortgage foreclosures, and many have gone to the deed of trust, so as to eliminate rights of redemption.

And to answer your question: it doesn't depend on whether it's owner-occupied or not. And renters would have to be given the normally required notice and evicted.