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For the prior video in this series covering the issuance of a certificate of sale to the successful bidder on the completion of a judicial foreclosure sale, click here.

One year redemption period after judicial foreclosure

On a judicial foreclosure of a purchase-assist mortgage secured by a buyer-occupied one-to-four unit residential property, the owner has up to one year after the judicial sale to redeem the property if the owner is liable on a recourse debt for a deficiency in the property’s value. [Code of Civil Procedure §729.030(b)]

However, if the property owner is not liable for any deficiency in the property value to fully satisfy the debt, the owner has three months after the judicial sale to redeem the property by paying off the entire debt and costs. [CCP §729.030(a)]

The property can only be redeemed by the owner or the owner’s successor-in-interest since all junior mortgage holders are wiped out, leaving no remaining rights in the property.

Successors-in-interest to the owner include any person who acquires the owner’s interest in the property by deed prior to the judicial foreclosure sale. [CCP §729.020;]

The redemption price for the owner (or successor) to recover the property sold at a judicial foreclosure sale is the total of:

  • the price paid for the property by the highest bidder at the judicial foreclosure sale (even if the amount is less than the property’s FMV on that date);
  • taxes, assessments, insurance premiums, upkeep, repair or improvements to the property paid by the successful bidder; and
  • interest on the above amounts at the legal rate on money judgments (10%) from the date of the payments through the date the redemption amount is tendered in full. [CCP §729.060]

On redemption, the owner (or successor) is entitled to:

  • an offset for any net rents collected by the mortgage holder under an assignment of rents provision in the mortgage; and
  • an offset for the rental value of the premises for any period of time the successful bidder occupied the property following the sale. [CCP §§729.060, 729.090]

If the owner or successor does not redeem the property within the redemption period, the sale is final and the high bidder is entitled to possession. [CCP §729.080]