when does the clock start on the right of redemption

10 Replies

I bought a house in a foreclosure auction in New Mexico on May 27th.  This is my first auction purchase.  I was pretty surprised to find that I don't own the house until a judge gets around to issuing the warrantee deed. The auction was 23 days ago.  I still don't have the deed. 

In NM, there is a 30 day right of redemption.  Now I am wondering when the owner's right of redemption begins.   Did the clock start ticking the day of the auction?  Or does it start only after the judge issues the warrantee deed?

The quickest answer, other than a RE attorney, will be to google your state statutes.

I was afraid that would be the answer.  There are few things I enjoy less than googling my state statues.  

However, I love chatting with RE attorney.  And I see your point.

You need to pull a copy of the security instrument and review it.  The redemption period can be no longer than nine months and is afforded to all interested parties.  If the security instrument was a Deed of Trust and specified a shorter time period for redemption, that contract term will prevail.  

In the event redemption is attempted, it will be a judicial process.  You will recoup purchase price plus interest at 10%.  There will be limitations to recovering capital expenditures.  All costs will be reviewed by a judge as referee for the total cost to redeem.

The clock starts upon the order of sale.  

Resale during a redemption period will not grant clear title since the FCL buyer doesn't have clear title to convey.  

I am reading the state statutes god help me.  they refer to the date of sale.  You refer to the order of sale.  

what is that exactly.  

when the judge makes the decision, or the day of the auction itself on the courthouse steps.?

@Katharine Chartrand  

Make sure you are reading the actual statue not a translation of the statue.  

Not sure the link will work but I will try:  http://public.nmcompcomm.us/nmpublic/gateway.dll/?...

"After sale of real estate pursuant to the order, judgment or decree of foreclosure in the district court, the real estate may be redeemed by the former defendant owner of the real estate or by any junior mortgagee or other junior lienholder whose rights were judicially determined in the foreclosure proceeding:"

In the statue link skip down to section E

E. For the purpose of this section, "date of sale" means the date the district court order confirming the special master's report is filed in the office of the clerk of the court.

For clarity, the date of sale is the date of the signed order of sale.  Which is not the sale date.  It is the date of the order prepared by the Special Master is signed.  They will likely be two different dates.  The signed order will likely be post the auction date.  This is to administer any redemption request.  It formalizes the price of sale.

Make sense?  

@Katharine Chartrand  

Not sure you reviewed those so one more post for clarity for you:

1.  Property order TO BE sold
2.  Special Master SELLS property at auction
3.  Special Master creates report - all fees, costs and price - calculated
4.  Special Master submits report to court
5.  Count Signs Order of Sale - this creates the amounts due in order to redeem
6.  Clock Starts

The auction date is not a useful date for you. The date the order is actually signed by the court is the date that is useful.  There maybe a period of time between the auction and the actual signature on the order.  You can likely call the court and see what the elapse time is for execution on the order.  You will get a copy of it either way.  

Katharine - Since you are primarily concerned with redemption, I'd lay low until receiving confirmation that Order of Sale has been signed if you think you might tip off owner (or junior lender?).

Monitor property for occupancy and be ready to move fast to serve former owner with statutory unlawful detainer documentation at first opportunity. A conformed copy of Order might be required and can be helpful when dealing with holdover former owner or their tenant.

In CA, we primarily have non-judicial trustee sales. If Trustee's Deed Upon Sale is recorded within 15 days of sale, Law of Relationback treats deed same as if recorded on 8:00 am on day of sale. But savvy trustee sale buyers learn not to serve U/D 5 day notice until they have copy of recorded doc.

Interesting that you bought at sale before learning about the Order of Sale details. When I bought my airplane some years ago, I took flying lessons long before asking how the landing gear extended while in flight.

Good luck and hope it turns out well for you.

@Rick H.

I had avoided approaching the owner for the right of redemption. I was afraid it would tip her off to options she was not aware of.  However, I will go down there Sunday and introduce myself and find out if she believes she has sold her right of redemption.

That said, the 10% interest is totally cool.  Does that start from the date of the auction or the date the order is signed.

Any advice on how to play this would be very much appreciated.


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