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Foreclosure is a devastating and humiliating process. Sometimes, it is unavoidable.
I am often asked about Foreclosure options after Sheriff Sale – so, what’s next?
Well, to start with – You Have Rights!!
The State of Michigan allows us a “redemption period”. That period can be 30 days, six months and sometimes even 1 YEAR – depending on the situation.
Why the different periods of time?
Typically, Michigan grants us 6 months to “redeem” or “buy back” our property (this allowance comes from Michigan’s agriculture past where our lawmakers thought it was a good idea to allow the property owner to bring in the year’s crop and allow the farmer to use the crops proceeds to “pay off the farm”).
Six months is the standard redemption time given – it can be shortened by your lender (to THEIR advantage) by claiming the property “abandoned”. I’ve seen a lender’s attorney argue homes as abandoned – even though the homeowner had furniture, personal items, clothing, kids toys and even food in the fridge!!
The property could also be allowed a 1 year redemption period if it is a large parcel, farm property or if the the amount claimed to be due on the mortgage at the date of foreclosure is less than 2/3 of the original indebtedness. So, for 99% of homeowners, we have a 6 month period of time to deal with..
What are my options?
Well, we can:
A. opt to just “ride it out” and stay in the home (please don’t bury your head in the sand!)
B. Sell the home (if the equity allows)
C. Rent it out (be careful – these are dangerous waters).
D. Come up with the redemption amount – plus interest and some minor costs and own the home “free and clear”.
In the next blog, we will talk about what can be done to minimize the damage to your credit, reduce the chances of a ending up with a “deficiency judgment “ and even exploring the possibility of making lemonade out of lemons (yes, homeowners on occasion will even walk out of closing with CASH!)
Here is some interesting reading on the subject of foreclosures in Saginaw, Midland and Bay County Michigan:
*disclaimer – I am not an attorney and none of the information above should be considered legal advice to you.