It is possible for an owner to sell their redemption rights and, through the paperwork, remain in the residence on a lease or on a lease with an option to purchase. The option to purchase plan allows the former owner the ability to purchase the property during a set period of time, usually three to five years, back from the current owner at an agreed upon price. Assuming the homeowner will have the ability to purchase the property in the future this could be the best case scenario especially if the sale price at auction was well below fair market value and the buy back price leaves equity in the property.
Note: a low bid at a sheriff’s sale may occur for at least two reasons. First, the amount on the mortgage note is quite low. Second, the buyers at the auction believe the property does not have a very high value given the condition of the property or the market conditions at the time. If the Court would approve the sale with a deficiency the homeowner will still owe whatever the deficiency amount is, unless the judgment is an “in rem” judgment.