Daily Archives: October 25, 2010

Foreclosure In Michigan

Foreclosure is the legal process for mortgage companies taking your house.

It is much in the news these days, with mortgage companies being questioned on the legal documents they produce in courts, in cases of judicial foreclosure.

Mortgage simply means: debt secured by real estate; pledging your home as collateral, or security, for a loan.

For the lien on your house, all of the owners of the home have to sign, in writing, agreeing to put up the home to guarantee payment of the debt.

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

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

Not likely to happen any more, as most houses with two mortgages are now worth less than the balance owed on the first mortgage.

However, that second mortgage can still sue, for a money judgment, whoever signed the note, for the unpaid balance, if they are not paid.

Foreclosure by publication is still cheaper for mortgage companies than their other option, judicial foreclosure through a court, though some indications are that may be changing in Michigan.

To foreclose by publication, the mortgage company must first publish a notice in the legal news, and send it to you 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.

Most, if not all, of the mortgage companies will wait a few extra days, but you should request a modification immediately.  You have nothing to lose.

Modification means an agreement with the mortgage company that changes the interest rate or payment or other terms of your agreement to repay them.

Just by requesting a modification, you get another 90 days for the foreclosure process to play out.

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 foreclosure sale, by the Sheriff of the county in which you live, at the county courthouse.

There is actually an auction, which is held open for an hour.  Not that many bidders are showing up these days.

This notice has to be published four consecutive weeks, so this part of the process takes a month.

In most situations, 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.

Foreclosure In Michigan

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