Foreclosure Law in Michigan
In Hastings, Michigan, foreclosure is a process through which a lender that issued a mortgage loan retakes possession of the property that was bought with the mortgage in the event that the borrower has defaulted on his or her payments.
When individuals are facing foreclosure, it normally involves a house. The bank will acquire the house with the intent of selling it at an auction, hoping to cover whatever's left on the mortgage, giving them at least a chance to break even on the loan.
In every U.S. state, including Michigan, a borrower has a right to a judicial sale of their foreclosed property. A judicial sale is just an auction supervised by a court. The purpose of this is to make sure that the lender takes reasonable steps to sell the home for the highest possible price, and to ensure that the homeowner has an opportunity to bid on the house, if he or she is able. It is in everybody's interest for the bank to get the highest price possible for the house, even the borrower's. If the house fetches a higher price than what's left on the mortgage, the buyer can keep what's leftover. On the other hand, if it fetches less, the buyer might have to pay the deficiency.
In some states, original mortgages are regarded "non-recourse" loans. This means that once the house or other property that secured the mortgage is sold, and if it sells for less than the balance of the mortgage, the lender has to absorb the loss, and cannot sue the borrower for the remainder. This normally does not apply to second mortgages or refinanced loans.
How to Possibly Avoid Foreclosure in Hastings, Michigan
It is absolutely necessary that you maintain a line of communication with your lender. Your can't expect your lender to accommodate your altered financial situation if they don't know about it. Ignoring the issue and hoping it will go away is the worst possible solution.
Throughout all this, you should remember one thing: the bank doesn't really want your house. After all, banks aren't real estate speculators, they're mainly money lenders. They stand to make a great deal of money if you are able to make your mortgage payments until it's paid off. They're likely to make much less if they're forced to sell your house.
If you face sudden expenses, such as medical bills or a lawsuit, which put a serious but relatively short-term strain on your finances, you should notify your lender instantly. You might find that they are willing to accept lower payments, if this will keep you from defaulting.
Lastly, there is the "short sale." Normally considered a last resort, a short sale results in the borrower losing their home, but discharges almost all of their remaining mortgage debt. If the house is worth far less than the balance of the mortgage, this might be a good choice. In Michigan, when a house is sold in a short sale, the proceeds go to the lender. If it sells for less than the mortgage balance, whatever's leftover is forgiven. If it sells for more, the surplus goes to the homeowner.
Can a Hastings, Michigan real estate attorney help?
If you are facing foreclosure in Hastings, Michigan, and want to do everything practicable to save your house, the assistance of a seasoned real estate lawyer might prove invaluable.