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 Norton Shores, 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 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 Norton Shores, 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 forthright with them. Ignoring the issue will not make it go away. You should remember that banks in Norton Shores don't want your house. While the foreclosure process can be devastating for the homeowner, it's no walk in the park for the bank, either. They expected to make a profit through interest on the loan paid over time, and foreclosure is a last resort, allowing them to cut their losses and move on. If you are forthright with them, lenders will typically try to accommodate your changed financial situation, to avoid a default on your part, and the necessity of foreclosing on their part.
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. 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 Norton Shores, Michigan Attorney Help?
If you think foreclosure is imminent, a good Norton Shores, Michigan Attorney might be your best hope for staving it off. Even if keeping the house proves impossible, a good Lawyer can minimize the financial effects.