Property foreclosures pose dangers to one’s wealth. But even when
a lender foreclosures, you haven’t necessarily lost your property.
If the lender repurchased the property it’s possible to convince
them to sell your foreclosed asset back to you, whether it is your home,
auto, or boat. After going to the expense and trouble to foreclose, why
would a lender sell you back foreclosed property?
Oftentimes, the lender may have anticipated selling the property for more.
If the sales price fell far short, the lender may re-sell you your property
for the note balance or even less. If the foreclosure eliminated other
liens against the property the lender may now also see you as a better
credit risk. Also,
filing bankruptcy or otherwise clearing your other debts makes you a candidate for a re-sale. Lastly, your lender may want to quickly
dispose of the property to avoid further costs or liability from holding
In most states, a borrower can redeem autos, boats, or planes after repossession.
You can then reinstate your loan and reclaim your vehicle by paying any
overdue installments, late fees, and legal repossession costs. However,
this redemption right is not absolute. You can't reinstate the contract
and reclaim your vehicle if you:
- Once had the installment contract reinstated
- Concealed the property to avoid repossession
- Damaged or neglected the property
- Physically interfered with repossession
- Misrepresented your creditworthiness
Your lender must give you notice of your right to reinstate, or you might
reclaim the property even without making overdue payments, but you must
punctually pay future installments. To reinstate, notify your lender.
If you fail to reinstate the contract or loan within the time stated in
the installment agreement (usually 60 to 90 days), the lender can hold
you responsible for the loan balance and notify you of their intent to
sell the repossessed property. You can then reclaim the property by fully
paying the loan.