How does deficiency judgement work in Michigan?

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Icon Mini Profile puppa





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Post Posted: Mon Mar 10, 2008 4:55 pm    Post subject: How does deficiency judgement work in Michigan?
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Are lenders still able to obtain a deficiency judgement after sheriff sales on foreclosed homes in Michigan? It is very confusing. Before they issued a 1099c for your forgiven amount. However, I understand that these 1099c are not being issued any longer. Does this mean that deficiency judgment is assumed? Also, does Michigan have anti-deficiency laws? If the mortgage is for the purchase of a dwelling occupied by the purchaser, is the purchaser not responsible for any deficiency?
Icon Mini Profile larry





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Post Posted: Mon Mar 10, 2008 5:38 pm    Post subject:
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Hi puppa,

Welcome to the forum.

The lender can still sue you for delinquency judgment. Michigan is not an anti-deficiency state. So the lender can ask you if the sale price less than the amount you owe to the lender.

1099c is only issued if the lender forgives you debt but now you need not to pay tax on the forgiven debt as per the Mortgage Debt Forgiveness Tax Relief Act. Know more about it at - http://www.mortgagefit.com/tax/debtforgiveness-reliefact.html

Feel free to ask if you have any further questions.

Best of luck,
Larry
Martin

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Post Posted: Mon Mar 10, 2008 5:41 pm    Post subject:
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Do you know how long they have to decide to file for a judgement? Also, can I request a 1099c? to make sure they cannot get a judgement?
Icon Mini Profile jameshogg
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Post Posted: Mon Mar 10, 2008 11:00 pm    Post subject: RE: how long to file for deficiency judgment
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Hi Martin,

Welcome back.

The purchaser of a property in Michigan is responsible for the deficiency judgment if the court orders him to do so. The judgment is filed only after the sale because the lender doesn't know exactly what the bidding amount will be.

Most probably the statute of limitation, that is the period up to which the lender can file the deficiency judgment is 4 years in Michigan. The statute varies from one state to another.

Now, if the lender cancels the deficiency as a result of negotiation, then you may be sent a 1099-c form just to keep in writing that the debt has been canceled. But this does not mean you'll have to pay tax.

Thanks
distressed

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Post Posted: Thu Nov 13, 2008 8:35 am    Post subject: what can a bank really come after
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what can a bank really come after in terms of my assets if a foreclosure happens...can they take my pension income and my social security income?
Icon Mini Profile jerry
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Post Posted: Fri Nov 14, 2008 2:49 am    Post subject:
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Hi distressed,

As far as I know, social security income cannot be garnished or taken away in case of foreclosure. Protection of pension income accounts may vary from state to state. Employee Retirement Income Security Act of 1974 (ERISA) may or may not protect the pension accounts. You will have to check your state laws if the pension accounts are protected or not.

Thanks,

Jerry
STACKFIS

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Post Posted: Fri Nov 14, 2008 1:26 pm    Post subject: DEFICIENCY JUDGEMENT
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I HAD 2 MORTGAGES WITH HSBC. I LET IT GO TO FORECLOSURE. I SETTLED ON THE FIRST FOR 21% AND NOW ON THE 2ND THEY HAVE FILED SUIT WITH A DIFFERENT COLLECTION AGENCY/LAWYERS. THEY WANT 65% WHICH I DON'T HAVE. THE AMOUNT WAS ABOUT SAME $33,000. I HAVEN'T RECEIVED A SUMMONS YET. THEY REFUSE TO EVEN CONSIDER MY OFFER OF $6,600. WHAT RECOUSE DO I HAVE?
Icon Mini Profile jerry
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Post Posted: Mon Nov 17, 2008 4:52 am    Post subject:
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Hi STACKFIS!

I think you should try and some how pay back the debts to the collection agency. You might take up a personal loan as well. If you do not pay the debts, it will keep on accumulating and the collection agency may even double it up. They may even file a law suit against you.

Thanks,

Jerry
Stressed Out

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Post Posted: Wed Feb 04, 2009 5:27 pm    Post subject: Redemption & Deficiency
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My house foreclosed and was sold at a sheriff sale. If I can come up with the amount to redeem my home, can I still be sued for the deficiency of the original mortgage?
Webee

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Post Posted: Sat Mar 28, 2009 1:31 pm    Post subject: Facing foreclosure
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I am unemployed and may face foreclosure. If I let the home go, what can my mortgage company to me legally, if I cannot pay the balance owed after they sell the home? I live in Michigan and my mortgage company is Green Tree Financial. Can I file for insolvency to rid myself of the taxes on the balance, if they file a dificiency suit? What legal fees can they charge me with, after the foreclosure?
Icon Mini Profile smithsussane
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Post Posted: Sun Mar 29, 2009 10:00 pm    Post subject:
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Hi!

Welcome to forums!

To Guest!

If you pay off the required amount to the lender and get back the property, then the lender would not sue you for the deficient amount.

To Webee,

If you let the property go into foreclosure, the lender will be able to sue you for the deficient amount resulting from the sale of the property. If you cannot pay the deficient amount, then the lender may place lien on your other property or can garnish your bank account.

You can definitely file for insolvency but I would suggest you to contact an attorney and take his opinion on this issue.

Sussane
krauserbradley

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Post Posted: Sun May 03, 2009 8:43 am    Post subject: mortgage loan and deficiency judgement
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My name and my wifes name are on the deed to our house, only my name is on the mortgage. In the state of michigan can the mortgage company go after my wife for the deficiency judgement also? If we purchase a new home and it is in my wifes name only can they put a lien on it since her name wasn't on the mortgage that was forclosed on?
Icon Mini Profile savior70





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Post Posted: Mon May 04, 2009 4:24 am    Post subject:
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Hi

If you're the only one on the mortgage your wife can't be held liable for the loan, even though she's on the deed to the property. So, if she purchases a new home in her name, the mortgage company can't put a lien on her property.
mjohnbaur44

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Post Posted: Mon May 11, 2009 8:33 pm    Post subject: Judgement of Divorce
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my Judgement of divorce holds us equally responsible for any deficiency even though my ex-wife's name is not on the mortgage. Should the home go into foreclosure - will the Judgement of Divorce stand to hold her accountable for her part? I am in Michigan and with the Citigroup.
Icon Mini Profile jenkin7
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Post Posted: Tue May 12, 2009 2:46 am    Post subject:
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Hi mjohnbaur,

It is most likely that the lender will come after you in case of a foreclosure, if you are the only one on the loan. The lender approved your loan based on your credit, income etc. Thus, if you default they will hold you responsible for it, not your wife. But if the divorce clearly states that she will also be responsible for the deficiency, the lender may hold her liable for her part. It is up to them.
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