Michigan foreclosure and combined mortgages

Guest 0.10 Dollars($)

We are in Michigan and went through chapter 7 in 2003. There were 2 mortgages on your home and we kept making payments but did not reaffirm. The 1st mortgage balance was $225000 and the 2nd $69000. the 2nd company stopped taking payments from us and after 14 months sold off the loan to another company. This third company foreclosed on our home – we still have 4 months to go for redemption. We have been current on the 1st loan until feb 2005 and now they are starting off a foreclosure. But they haven't harassed us and their attorneys have just send us letters informing us of what they’re doing. They also have a lien on the property. Now the third company has called us almost 10 times and each time they've been scaring us and making us feel that they've lost their money just because we couldn't pay them. The third company now wanst to buy the second mortgage before the foreclosure sale from the 1st mortgage company and their attorneys. We've been informed that the third company would evict us on the day the sale is decided. I called up 2 attorneys and they said in Michigan it’s not possible; they've asked me not worry about the third company who are the owners of the second mortagge now. So, we'll either have to redeem or vacate the house before the date of redemption. I'm not sure..i just want to get out of this mess..any advice would be really helpful at this moment. Sad

jenkin7 · Joined: 04 Jun 2007 Posts: 887 132.55 Dollars($)

Hello Ralph and Nicole,

As far as I know, according to the Michigan foreclosure laws, you have the right to possess the property until the redemption period is over. So, I don't think the second mortgage holder can evict you on the day the sale is decided.

But I'm a bit confused with your situation.

Has the second mortgage lender already foreclosed on your property or is it yet to be done?

Does your first lender know about the second mortgage foreclosure? Otherwise how can he think of foreclosing on your property if the second lender has already arranged for a foreclosure sale?

Guest 0.10 Dollars($)

"I don't think the second mortgage holder can evict you on the day the sale is decided."

Well, that's what they said and i'm in a fix, don't know what to do. when do you think they are supposed to evict me? Just to rectify my typo, it's the first mortgage that the third company wants to buy and not the second loan.

"Does your first lender know about the second mortgage foreclosure? Otherwise how can he think of foreclosing on your property if the second lender has already arranged for a foreclosure sale?"

Well, i don't know exactly, i mean they do know the second mortgage lender but i don't know if they've had any communication.

jenkin7 · Joined: 04 Jun 2007 Posts: 887 132.55 Dollars($)

Hello Ralph,

If you do not redeem or vacate the property within the redemption period, then usually you will have 10 more days after the redemption period is over. A particular court date will be held within which you should move out from the property.

Usually that's how it should work. The first mortgage has the first claim to the property if it undergoes foreclosure or a short sale. So even if the second mortgage lender forecloses on your property, he should either satisfy the first lender with the sale proceeds or he should buy the first mortgage.

I think it is important for the first lender to know about the entire situation in order to avoid any complication.

Could you tell me the present market value of your property and an estimate price at which the property might sell? I want to know this in order to make sure whether you will have to pay any unpaid mortgage balance if the lender seeks a deficiency judgment.

Caron

Hi Ralph and Nicole,

I can understand how you're feeling right at the moment. But if you wish to keep the home, then you'll have to try out various means to get out of the mortgage mess. Now, you have filed chapter 7 earlier, but that doesn't mean that you cannot file chapter 13 now.

In fact, you can file chapter 13 any time after you are discharged from chapter 7. By doing so, you will be able to make partial payments towards the mortgages as suggested by a court-appointed trustee. So, it will help you to clear up the mess to some extent at least and your credit will also improve.

But you need to find out if you qualify for chapter 13 or not. Only then you can file it. To know whether you qualify for chapter 13, please refer to the section on this topic.

Good luck

scherzeroni · Joined: 05 Jan 2008 Posts: 51 18.77 Dollars($)

You should be able to stay until the redemption period is over but that is typically only for 30 days. I would advise looking long term on what you are going to do from there. If you need to rent, then thats what you need to plan for. I dont know if another 30 days is going to make a difference in the big picture.

larry · Joined: 27 Jun 2007 Posts: 2982 416.96 Dollars($)

Hi,

I agree with Caron above. You can file chapter13 any time after you are out of chapter7 to avoid the foreclosure mess. To file chapter13 you should consult with an bankruptcy attorney.

Feel free to ask if you have any further questions.

Best of luck,
Larry

Guest 0.10 Dollars($)

Hi -

In Michigan you cannot be evicted unless your redemption period has expired. After redemption period expires, the property is then titled to the individual or company who has successfully obtained the Sheriff's Deed (from the foreclosure sale). They then own the property. They must go through legal process to evict you -

The legal process is as follows. 1. Notice to Quit (evacuate the premises)
2. Summons and Complaint - will be filed in District Court. 3. A Hearing which will result in 1. A default judgment if you don't appear, or 2. A Consent Judgment if you appear. A default usually only gives you 10 days to vacate, by consent you can usually get up to 30 days. If you have an FHA or Freddie Mac Insured Mortgage, you can negotiate "cash for keys" (generally up to $2000) to voluntarily evacuate the property before the eviction begins.

I hope this helps

Samantha · Posted: Tue Mar 11, 2008 12:36 am Post subject: RE: welcome message

Hi legaleagle,

Welcome to the forum.

Thanks for your valuable suggestion. You do seem to have a good knowledge of the laws. Feel free to join our community just in case you'd like to be a part of it and share your views with others thereby helping them get out of porblems. By the way, are you a mortgage attorney?

Samantha

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