What is the right of a borrower to reclaim a property after defaulting on a loan called?

The right of a borrower to reclaim a property after defaulting on a loan is known as the equity of redemption. This concept allows the borrower to pay off the amount owed on the mortgage, including any accrued interest and fees, to regain ownership of the property even after defaulting. The equity of redemption serves as a protective measure for borrowers, ensuring they have an opportunity to rectify their financial situation and maintain control over their property.

This right is fundamental in real estate because it reinforces the idea that borrowers have a vested interest in their property and the ability to recover ownership under specific circumstances. Understanding equity of redemption is crucial for both borrowers and lenders, as it can influence the foreclosure process and the rights of each party involved in the loan agreement.

In contrast, other options like loan reinstatement refer to the process of bringing a loan current by paying missed payments, rather than the broader right to reclaim a property. The right of possession pertains more to the physical control of a property, and the right of refusal usually relates to a different context in real estate transactions, such as the priority to purchase before others. These distinctions highlight why equity of redemption effectively captures the specific right being addressed in the question.