Foreclosure is the process 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 Escanaba, Michigan has repeatedly failed to make their payments. Foreclosure normally results in the property being sold in an auction. Banks normally want to get rid of the property as soon as possible, even if it means taking a financial hit, and an auction is the easiest 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 overseen 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 entire balance will be covered, as well as the odds that there will be some money leftover for the borrower). In many states, original mortgages (as opposed to refinanced loans) are "non-recourse" loans, meaning that the most the lender can collect is whatever the foreclosed property sells for. The bank cannot go after the borrower for the balance, if the sale nets less than the amount due. You should consult a lawyer in Escanaba, Michigan to learn the details of the law here. You should also know that this rarely applies to loans which have been refinanced.
How Can I Avoid Foreclosure in Michigan?
First of all, you shouldn't ignore the problem. You should stay in contact with your bank, and be straightforward with them. Ignoring the issue will not make it go away. It is important to remember that the bank does not really want your Escanaba 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 you believe that foreclosure is imminent, there are some other options. For example, you might be able to engage in a "short sale," which sometimes allows you to sell your house for whatever amount you can get, give the proceeds to the lender, and walk away free of your mortgage debt, even if the sale netted less than the balance of the mortgage. A "short refinance" might also be an option in some cases. This allows you to have some portion of the debt forgiven, while refinancing the rest.
How Can A Escanaba, Michigan Attorney Help?
If you are facing the possibility of foreclosure, a good Escanaba, Michigan real estate attorney can help. At the very least, they will be able to inform you of your legal options.