Opinion ID: 2626405
Heading Depth: 4
Heading Rank: 3

Heading: The equity of redemption extends to junior lienholders on the property secured by the deed of trust.

Text: The traditional right of equitable redemption generally extends in some manner to holders of interests junior to the obligor's interests. Under the Restatement approach, A performance in full of the obligation secured by a mortgage, or a performance that is accepted by the mortgagee in lieu of payment in full, by one who holds an interest in the real estate subordinate to the mortgage but is not primarily responsible for performance, does not extinguish the mortgage, but redeems the interest of the person performing from the mortgage and entitles the person performing to subrogation to the mortgage. . . . Such performance may not be made until the obligation secured by the mortgage is due, but may be made at or after the time the obligation is due but prior to foreclosure. [30] This right of redemption for junior interest holders exists to protect their interests since a foreclosure cuts off all interests junior to the one foreclosed. Junior interests that are protected include junior mortgagees, the holders of junior mechanics' liens and other liens, junior lessees, and easement holders. [31] As the Washington Court of Appeals has held, in order to possess equitable redemption rights, a person must have an interest in land and it must be derived in some way . . . from or through or in the right of the mortgagor so as to constitute a part of the mortgagor's original equity of redemption. [32] More than a century ago the Oregon Supreme Court stated the proposition even more broadly, holding that the right of redemption exists not only in the mortgagor himself, but in every other person who has an interest in, or legal or equitable lien upon, the mortgaged premises, and includes judgment creditors, all of whom may insist upon a redemption of the mortgage. [33] Thus, we conclude that a junior lienholder holds a right of redemption under a deed of trust. The equity of redemption, as we have stated, would normally require payment of the full amount mortgaged. We now consider whether a junior lienholder is entitled to invoke AS 34.20.070(b) and require the obligee to accept payment of arrearages to cure a senior interest holder's default.