EQUITY OF REDEMPTION

EQUITY OF REDEMPTION

equity of redemption. Real estate. The right of a mortgagor in default to recover property before a foreclosure sale by paying the principal, interest, and other costs that are due. ? A defaulting mortgagor with an equity of redemption has the right, until the foreclosure sale, to reimburse the mortgagee and cure the default. In many jurisdictions, the mortgagor also has a statutory right to redeem within six months after the foreclosure sale, and the mortgagor becomes entitled to any surplus from the sale proceeds above the amount of the outstanding mortgage.

¡ª Also termed right of redemption. See CLOG ON THE EQUITY OF REDEMPTION; REDEMPTION(4); STATUTORY RIGHT OF REDEMPTION . [Cases: Mortgages 591, 600. C.J.S. Mortgages ¡ì¡ì 57, 991, 993, 995, 998¨C999, 1005, 1040¨C1043, 1045¨C1046, 1065, 1068.]

¡°A mortgage is technically a conveyance of title to property as security for a debt. The law courts, with typical technicality, early adopted the rule that if the debt was not paid on the very day it was due, the debtor lost his land. The equity courts, however, with more liberality, and with more of a recognition of the real purpose of the transaction, recognized the fact that the securing of the debt, rather than the act of conveyance of title was the principal thing giving character to the transaction. Accordingly they alleviated the severity of the legal rule by, in effect, giving the land back to the debtor if he would pay the debt, even though it had not been paid on time. This equitable right to redeem, even after default in paying the debt when it was due, was called the ¡®equity of redemption.¡¯ ¡± Charles Herman Kinnane, A First Book on Anglo-American Law 309 (2ded. 1952).


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