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 Gibraltar, Michigan has repeatedly failed to make their payments. When a house is foreclosed, it is typically sold at auction shortly thereafter. This is because banks typically want to get rid of the property as soon as possible, even if it means losing some money, and an auction is an easy way to do this.
In every state, including Michigan, there is an option to go through foreclosure by a judicial sale, which is a procedure in which a court supervises the sale of the property, and makes sure that the proceeds first go the to the holder of the mortgage, then to anyone else who may have a lien on the property, and finally to the debtor if anything is left. In some states, original mortgages are treated as "non-recourse" loans, meaning that, at most, the lender can take ownership of the house in the event of foreclosure, even if it is worth less than the amount due. The bank cannot go after the debtor for the remaining balance once it sells the house. You should consult a lawyer in Gibraltar, 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, you should never ignore the matter. As unpleasant as it seems, it is essential to stay on top of the issue. Ignoring the problem will never make it go away. It is crucial to remember that the bank does not really want your Gibraltar 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 can't work anything out with your lender, or have become completely unable to make any mortgage payments, a "short sale" might be a good option. This allows you to sell your house for whatever price it can get, and hand the proceeds over to the lender. If the sale price is less than the balance of the loan, the rest of the debt might be forgiven. You might also consider a "short refinance" which allows a portion of the debt to be forgiven, while refinancing the rest, hopefully under better terms.
How Can A Gibraltar, Michigan Attorney Help?
If you are facing foreclosure, a good Gibraltar, Michigan real estate attorney can help. While keeping your home might not always be possible, a lawyer can increase your odds of success, and help you minimize the negative impact if you do end up losing your home.