Equitable Redemption

This is a person's right to reclaim his/her property after the foreclosure process has begun. If an acceleration clause exists on the mortgage (meaning that the full loan amount is due upon default), the owner would have to satisfy the full loan amount before the home went to auction.

Paul Brown has owned his home for four years. The outstanding balance on his mortgage is $92,000. Paul defaulted on his loan and is three months behind on his payments. The bank has decided to foreclose on the home exercising the acceleration clause, and the home auction will take place in two weeks. If Paul can come up with the $92,000 before the home hits the auction, he will retain his title. If he cannot satisfy the loan by that date, the home will go to auction and he will have no recourse.

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