After default on a mortgage, before a foreclosure sale, a mortgagor arranges to pay the amount owed to redeem the property. Is the bank required to accept such an offer under the doctrine of equity of redemption?

After default on a mortgage, before a foreclosure sale, a mortgagor arranges to pay the amount owed to redeem the property. Is the bank required to accept such an offer under the doctrine of equity of redemption?

• A. No, because foreclosure has already begun.
• B. No, because equity of redemption is not applicable here.
• C. Yes, because equity of redemption allows redemption by paying the amount owed.
• D. Yes, but the buyer must reimburse the seller for insurance.

Answer: (C)

Equity of redemption is the borrower’s right to avert foreclosure by paying the amount due before the sale. If the mortgagor offers to pay exactly what is owed at that time—covering the principal, accrued interest, and costs incurred to date—the lender is typically obligated to accept the offer and cancel the foreclosure, effectively reinstating the loan before the sale occurs. This right exists to prevent the property from being lost due to default and to allow the mortgage to be brought current. The payment required to redeem is the amount due at that moment, not future or additional charges beyond what has accrued. Insurance reimbursements or other side arrangements aren’t part of the redemption payment itself. So, the bank’s obligation is to accept the redeeming payment that clears the owed balance, thereby stopping the foreclosure.

Equity of redemption is the borrower’s right to avert foreclosure by paying the amount due before the sale. If the mortgagor offers to pay exactly what is owed at that time—covering the principal, accrued interest, and costs incurred to date—the lender is typically obligated to accept the offer and cancel the foreclosure, effectively reinstating the loan before the sale occurs. This right exists to prevent the property from being lost due to default and to allow the mortgage to be brought current.

The payment required to redeem is the amount due at that moment, not future or additional charges beyond what has accrued. Insurance reimbursements or other side arrangements aren’t part of the redemption payment itself. So, the bank’s obligation is to accept the redeeming payment that clears the owed balance, thereby stopping the foreclosure.