The "Redemption Procedures Improvement Act" seeks to strengthen the rights of property owners and junior lienors in the context of redemption and foreclosure processes. The bill introduces provisions that allow defendants, property owners, or holders of subordinate interests to cure their indebtedness and prevent the sale of their property. It establishes that the right of redemption cannot be waived without informed consent and proper disclosures. Additionally, the bill outlines procedures for transferring liens to substitute security, ensuring that any excess security is returned to the party filing the transfer. Key amendments include mandating that properties in foreclosure be sold at judicial sales and prohibiting mortgagees from acquiring property interests outside this process.

The legislation clarifies that a mortgage is a specific lien on the property, without conveying legal title or possession rights to the mortgagee. It prohibits mortgagees or their designees from acquiring interests in mortgaged property through contractual terms, except via judicial sale or specific statutory methods. The bill also establishes that all mortgage foreclosures must occur in equity and outlines conditions under which a mortgagee may acquire title to mortgaged property in satisfaction of the obligation, requiring written agreements that disclose financial details. The bill is remedial in nature and applies to all mortgages and related agreements, with specific provisions for transfers and settlements effective from July 1, 2025.

Statutes affected:
S 1778 Filed: 45.0315, 679.612, 697.02, 702.01