A Tennessee homeowner, Linda, has fallen behind on her mortgage payments. Her lender has initiated foreclosure proceedings using the power of sale clause in her deed of trust. Linda wants to stop the foreclosure by paying off the entire loan balance before the sale occurs. Which legal right would allow Linda to do this?
Correct Answer
B) Equitable right of redemption, exercisable before the foreclosure sale is completed
The equitable right of redemption allows a borrower to stop foreclosure by paying the full outstanding debt before the foreclosure sale is completed. This right exists in Tennessee prior to the sale. It is distinct from the statutory right of redemption (which would apply after the sale), which Tennessee does NOT provide following a non-judicial foreclosure.
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Related Topics & Key Terms
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Related Concepts
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
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