Foreclosure is the procedure through which the lender in a mortgage takes ownership and/or possession of the property that secured the original loan. This happens when a debtor in Berrien County, Michigan has consistently failed to make their payments. Foreclosure typically results in the property being sold in an auction. Banks typically want to get rid of the property as soon as possible, even if it means taking a financial hit, and an auction is the simplest way to do this.
In every state, including Michigan, borrowers have the option to go through foreclosure by judicial sale. This means that the auction will be supervised by a court, to make sure that the bank makes an effort to get as high a price as possible (to increase the chances that the whole balance will be covered, as well as the odds that there will be some money leftover for the debtor). In some states, original mortgages are treated as "non-recourse" loans, meaning that, at most, the lender can take possession of the house in the event of foreclosure, even if it is worth less than the amount due. The bank cannot go after the borrower for the remaining balance once it sells the house. You should consult an Attorney in Berrien County, Michigan to find out if this is the case here. This typically does not apply if the mortgage has been refinanced.
How Can I Avoid Foreclosure in Michigan?
First of all, you shouldn't dismiss the problem. You should stay in contact with your bank, and be forthright with them. Ignoring the issue will not make it go away. It is essential to remember that the bank does not really want your Berrien County house - they expected to make a profit through the interest on your loan, and that's what they'd prefer to do. Accordingly, they will probably make reasonable accommodations to your financial situation if it means that you will be able to make some form of payment to them.
If no deal can be worked out, or the mortgage payments have become prohibitive, you may consider a "short sale". While the lender has to consent to it, many will take a moderate loss if it means avoiding foreclosure (which lenders usually treat as a last resort). This allows you to sell the house for whatever price it can fetch on the current market, and hand the proceeds over to the bank. If the sale nets less than the balance, some or all of the deficiency may be forgiven. You might also consider a "short refinance" which allows a part of the debt to be forgiven, and lets you refinance the rest.
How Can A Berrien County, Michigan Attorney Help?
If you are facing the possibility of foreclosure, a good Berrien County, Michigan real estate Lawyer can help. At the very least, they will be able to inform you of your legal options.