A borrower's right in some states to reclaim foreclosed property within a set period after the sale.
Why Statutory Redemption matters on the exam
This term belongs to Financing. The questions below are real items from Freehold's bank that use it - each one cites its source.
Exam questions using Statutory Redemption
Every Freehold question shows why the right answer is right — and cites its source.
The equitable right of redemption is derived from:
Statutory law enacted after foreclosure
FHA insurance requirements
The Truth in Lending Act
Common law principles recognized in every state
Show answer & explanation
Common law principles recognized in every state — The equitable right of redemption is a common law right recognized in all states, existing up until the foreclosure sale, distinct from the statutory redemption period some states allow afterward.
Source: PSI National Real Estate Exam Content Outline §4 Financing
A statutory right of redemption, where it exists, allows a former owner to:
Redeem the property for a defined period after the foreclosure sale by paying the sale price plus costs
Redeem the property before the foreclosure sale only
Void the original mortgage instrument entirely as a matter of law once the statutory redemption period has fully expired
Automatically regain title without paying anything
Show answer & explanation
Redeem the property for a defined period after the foreclosure sale by paying the sale price plus costs — Unlike the equitable right of redemption, a statutory right of redemption, available only in some states, permits the former owner to reclaim the property for a set period after the foreclosure sale by repaying the sale price and costs.
Source: PSI National Real Estate Exam Content Outline §4 Financing
Whether a statutory right of redemption exists after a foreclosure sale depends on:
Federal law, which is uniform nationwide
Individual state law
The type of appraisal used
Whether the loan was a fixed or adjustable rate
Show answer & explanation
Individual state law — Statutory redemption rights after a foreclosure sale are creatures of state law; some states provide them and others do not, and the length of the period varies by state.
Source: PSI National Real Estate Exam Content Outline §4 Financing
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