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Discussions > Foreclosure & Tax Deed Auctions

Answered
HUD Right of Redemption Period for Subordinate Mortgage After Foreclosure

Hello everyone,

I recently purchased a Florida property at a foreclosure auction. The property has a subordinate HUD mortgage, and the United States / HUD was named and served as a defendant in the senior foreclosure action.

The final judgment explicitly states that HUD has a 4-month redemption period. However, online sources offer conflicting information (some referencing a 1-year right of redemption under federal law versus 120 days / 4 months). Furthermore, a representative at HUD verbally indicated that HUD claims no redemption rights once foreclosed as a named defendant, and that they do not issue formal waiver letters.

Before listing the property for resale, I want to make sure there are no title exceptions or underwriting issues that could derail title insurance for a future buyer.

For those who have dealt with subordinate HUD liens after a senior auction:

  • Did your title underwriter require waiting out the full redemption period (4 months vs. 1 year) before issuing a clear policy?
  • Is there a standard procedure to obtain a formal release or waiver of redemption from the local U.S. Attorney’s Office or HUD?

Any insights or prior experiences would be greatly appreciated!

Posted 20 days ago
  
  
Votes Newest

Answers 2


HUD is a different ballgame right now, they aren't playing by the rules anymore.

If it's a reverse mortgage, you absolutely need to be worried.

Watch these two videos Tony made with our Friend Jeff Harrington of Harrington Legal Alliance:

HUD Reverse Mortgage Foreclosure: New Hidden Risk for Investors 1 of 2

HUD Reverse Mortgage Foreclosure: New Hidden Risk for Investors 2 of 2

We are in the process of helping someone with EquityFixers.com that bought a property that was on title free and clear, HUD filed a release a few months before the auction. Then 1 month after this guy purchased at foreclosure auction they filed a "Correction of Satisfaction" with the county, essentially saying "whoops, we didn't mean to file that satisfaction", and demanded payment on their previously satisfied mortgage.

Step 1: Contact attorney for quiet title and do whatever you can to get title insurance as soon as possible. If he would have done it he would have had a solid claim.

Posted 20 days ago
  
  
Damon Simons
251 × 5 Administrator

As Damon said, they are playing different lately and I would review those video links for more information.

In my personal experience, the last Superior liens I bought, two of them had second mortghages from HUD and since they were named on the law suit, the were cleared. One sold after 95 days with no problem the other after 120 days with no issue at all.

Did you knew of the Final Judgement statements before purchase? Did you run a title search befroe that?

I deal with a lot of foreclosure and havent seen that, I will love to get a copy of the final judgment.

If it gets complicated, definetly contact EquityFixers.com, they would know exactly waht to do.

Posted 2 days ago
  
  
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