Foreclosure Order to Pay

In Kansas, a borrower is not immediately removed from a property after the foreclosure sale.  Instead, the borrower is provided a redemption period, which is a period of time that the borrower can continue to live in the home or rent the home to other parties.  The purpose of the redemption period is to provide the borrower with an opportunity to pay in order to stay in the home.  If the property is redeemed, the funds are paid to the court and the foreclosure purchaser will have to request the court enter an “Order to Pay” directing the court clerk to release the funds.  We will assist with these filings to get your funds released.

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Purchasing Redemption Rights

Kansas allows the borrower to transfer or sell his or her redemption rights.  When this happens, the purchaser of the redemption rights steps into the shoes of the owner.  In other words, the purchaser of the redemption rights can move into the property, lease the property to others, or redeem the property.  In order to redeem the property, the borrower (or assigns) must pay to the purchaser at the foreclosure sale, the entire amount paid, plus interest and expenses incurred by the purchaser.

In order to extinguish redemption rights held by the borrower, the purchaser must file a motion to shorten or extinguish the redemption rights with the court.  The matter will then be set for a hearing.  If the home is located in Johnson County, Kansas, this is a non-appearance hearing, meaning that no one needs to appear unless they object to the shortening of the rights.  In other Kansas counties, the hearing is a regular hearing and the purchaser (or his or her attorney) must appear at the hearing.  If no one appears or objects, the court will generally grant the request to extinguish the redemption rights.

Special Rules for Johnson County

The redemption rights market in Johnson County, Kansas is ultra- competitive and the courts in Johnson County have enacted rules to address this competitive market. To read more about these rules, please see our blog post on the topic at Changes to the Rules for Johnson County, Kansas Redemption Rights.

How to Transfer Redemption Rights

Redemption rights are transferred with an assignment, similar to the transfer of a mortgage from lender to lender. With that being said, there are specific disclosures that must be given to the party transferring the redemption rights and notice must be filed with the court at the time of transfer. We are happy to assist with drafting this paperwork for a flat fee of $250 per property.