Equity of Redemption

The right of a mortgagor, before a foreclosure sale, to reclaim property forfeited due to mortgage default. The mortgagor can redeem the property by paying the full debt plus interest and costs. Any attempt to have the mortgagor waive the equity of redemption is unenforceable and void as being contrary to public policy. Equity of redemption has been held to be an interest in real estate and is thus affected by the ordinary laws and rules concerning conveyances, including the statute of frauds.

Any right to redeem after a foreclosure sale must be created by state statute. In those states that permit a power of sale to be inserted in the mortgage document, most foreclosures of property are conducted pursuant to the nonjudicial foreclosure statute. Upon a foreclosure sale, the equity of redemption is terminated.