Carlos purchased a home in Anniston, Alabama using a mortgage loan. He later defaulted, and after the judicial foreclosure sale, an investor named Diana purchased the property at the sale. Three months later, Carlos exercises his statutory right of redemption by tendering the full redemption amount to Diana. Which of the following correctly describes the legal effect of Carlos's redemption?
Correct Answer
A) Carlos recovers title to the property, and Diana is entitled to a refund of the foreclosure sale price plus any improvements she made
Under Code of Alabama §6-5-248, when a former owner successfully exercises the statutory right of redemption by paying the required amount (foreclosure sale price plus costs and interest), the former owner recovers full title to the property. The foreclosure purchaser (Diana) is entitled to receive the redemption payment, which includes the sale price plus applicable costs and interest. Diana cannot refuse a valid redemption tender. Upon redemption, Carlos regains title and Diana's ownership interest is extinguished, though Diana may have claims for certain costs incurred during the redemption period.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An adjustable-rate mortgage (ARM) has an interest rate that changes periodically based on market conditions, typically after an initial fixed-rate period. The rate adjustment is tied to a financial index plus a margin.
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
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