Nebraska Statutes 76-2723. Option to repurchase; conditions
A transaction in which a homeowner purports to grant a residence in foreclosure to an equity purchaser by an instrument that appears to be an absolute conveyance and in which an option to repurchase is reserved to the homeowner or is given by the equity purchaser to the homeowner shall be permitted only where all of the following conditions have been met:
Terms Used In Nebraska Statutes 76-2723
- Contract: A legal written agreement that becomes binding when signed.
- Equity purchaser: means a person who, in the course of the person's business, vocation, or occupation, acquires title to a residence in foreclosure. See Nebraska Statutes 76-2706
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Homeowner: means the owner of a residence in foreclosure, including a vendee under a contract for deed to real property as defined in section Nebraska Statutes 76-2711
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Lien: A claim against real or personal property in satisfaction of a debt.
- Residence in foreclosure: means a residence or dwelling that is occupied as the homeowner's principal place of residence and against which any type of foreclosure action, including, but not limited to, the filing of a notice of default of a deed of trust or the filing of a lawsuit to foreclose a mortgage or other lien, has been commenced. See Nebraska Statutes 76-2712
(1) The reconveyance contract complies in all respects with section 76-2720 ;
(2) The reconveyance contract provides the homeowner with a nonwaivable, thirty-day right to cure any default of the reconveyance contract and specifies that the homeowner may exercise this right to cure on at least three separate occasions during the term of such reconveyance contract;
(3) The equity purchaser fully assumes or discharges the lien in foreclosure as well as any prior liens that will not be extinguished by the foreclosure, which assumption or discharge shall be accomplished without a violation of the terms and conditions of the liens being assumed or discharged;
(4) The equity purchaser verifies and can demonstrate that the homeowner has or will have a reasonable ability to make the lease payments and to repurchase the residence in foreclosure within the term of the option to repurchase under the reconveyance contract. For purposes of this section, there is a rebuttable presumption that the homeowner has a reasonable ability to make lease payments and to repurchase the residence in foreclosure if the homeowner’s payments for primary housing expenses and regular principal and interest payments on other personal debt do not exceed sixty percent of the homeowner’s monthly gross income; and
(5) The price the homeowner must pay to exercise the option to repurchase the residence in foreclosure is not unconscionable. Without limitation on available claims under section 76-2726, a repurchase price exceeding twenty-five percent of the price at which the equity purchaser acquired the residence in foreclosure creates a rebuttable presumption that the reconveyance contract is unconscionable. The acquisition price paid by the equity purchaser may include any actual costs incurred by the equity purchaser in acquiring the residence in foreclosure, including repairs and capital improvements, and may include below market rent discounts. The equity purchaser shall provide the homeowner with documentation proving such costs and below market rent discounts prior to the homeowner’s exercise of the option to purchase.