Daily Archives: October 30, 2009

What Happens In A Michigan Foreclosure?

Foreclosure is the way the mortgage company takes your house if you do not pay them.

Mortgage just means debt secured by real estate.  That is, you pledged your house as collateral for a loan.

There are other names, used for marketing purposes, like home equity loan, equity line, but the name has no legal significance.

For there to be a lien on your house, the owners of the house have to sign, in writing, agreeing to put up the house to guarantee payment of the loan.

There is also a mortgage note, which is the separate contract to repay the money at whatever interest rate, terms, and so on, that were agreed to, or imposed by, the mortgage company.

The owners have to sign the mortgage pledging the house, but anyone can sign the note.

Sometimes, the mortgage company will have only one of the owners sign the note.

That means  that only the signer of the note is legally obligated to repay the money.

Many of us have more than one mortgage on our home.  The first mortgage recorded at the register of deeds is first in priority.  That means it has to be paid before the second mortgage, or third and so on.

So, for a second mortgage to foreclose and take your house, they would have to pay off the first mortgage.

This is not likely to happen these days, as most homes with two mortgages are now worth less than what is owed on the first mortgage.

However, that second mortgage can still sue whoever signed the note, if they are not paid.

Foreclosure by publication is still cheaper for mortgage companies than their other option, judicial foreclosure.

To foreclose by publication, they must first publish a notice in the legal news, and send it by mail, and post it at your home.

That first notice must tell you that you have two weeks to contact the mortgage company requesting a modification of the mortgage.

Modification means an agreement with the mortgage company that changes the terms of your agreement to repay them.

Just by requesting it, you get another 3 months in your home for this process.

If you do not request a modification, within the allowed time, the mortgage company publishes and serves you with a second notice.

This notice tells you the day of the sale, by the Sheriff of the county in which you live.  This notice has to be published four consecutive weeks, so this part of the process takes a month.

In most cases, state law gives you six months from the sale date to redeem the house, which means pay off the entire balance owed.

After that, it will take a month or so to evict you if you are still living in your house.

What Happens In A Michigan Foreclosure?

3 Responses to What Happens In A Michigan Foreclosure?

  1. when we were servered by the realitor they gave the open paper to my 16year old son ,because his name is the same as husband excepte middle initial. she asked if he was tim … he said yes and she handed it to him. when we got home from town here was my son sitting on the back porch crying and asking why we were kicking him out in december? is there anything we could have done to this women that turned my fanily upside down? she should have asked for id befored handing over such a powerful paper to such a young boy. thank you debbie