Posted: Mon Dec 01, 2008 8:07 am Post subject: Michigan - state laws on deficiency
Sara mentioned in a previous post that Michigan is a deficiency judgment state. What does that mean?
Personally, I have been laid off and there are no jobs in MI. I am expecting an offer from another state. Renting my current home is not an option. I have a primary loan and a 2nd mortgage with the same lender. We have made all of our payments and plan to call the lender when I have the offer.
A deficiency judgement is a judgement that is against a debtor or borrower whose foreclosure sale did not produce sufficient funds to pay the mortgage balance in full. This judgement can/will be placed on your credit and any subsequent properties you purchase or already own. Typically with a deficiency judgement, until this is paid off you will not be able to purchase another home through a lender.
As of right now, every state except California and Oregon are deficiency law states. _________________ Senior Underwriter
Flagstar Bank, FSB
A judgment against a borrower whose foreclosure sale did not produce enough funds to pay the mortgage in full is known as deficiency judgment. The borrower will have to pay the deficient amount resulting from the sale of the property to the lender. Not all states allow deficient judgment against the borrower. However, Michigan is a deficiency judgment state. So if you sell your property and their is a deficient amount resulting from the sale, the lender has all the right to ask you to pay that amount.
Feel free to ask if you have further queries.
Sussane
all_finace Guest
Posted: Sun Dec 07, 2008 8:41 am Post subject: MI mortgage / foreclosures
Most foreclosures in Michigan are by publication, a sale held by the county sheriff, noticed for four consecutive weeks in a local newspaper, almost always the Legal News
Alternatively, there is a judicial foreclosure process, through the Circuit Court for the county in which the property is located, but it takes longer and is more expensive for the mortgage company, so rarely used. In almost all foreclosure by publication the mortgage company bids the amount due on the mortgage, and no one else bids higher. Even if someone does, there would be no deficiency, as the sherrif’s deed transferring the property 6 months after the foreclosure sale effectively is for the amount bid. This means, you have lost the home, but you owe nothing.
Ellen Guest
Posted: Thu Jan 01, 2009 7:54 pm Post subject: Deficiency
The lender's are beginning to under bid what is owed at the Sheriff's sale. So, caution is necessary because that means they may be preserving their right to sue borrower's in the future for a deficiency. Borrower's may not even know that this is happening, and it is a legal strategy that they must be aware of to protect themselves from future liablility
Guest
Posted: Mon Jan 19, 2009 5:14 pm Post subject:
In a short sale can you ask the sale be contingent on waiving the deficiency judgement for the seller. That is what my TX real estate agent told me they do in TX?
Guest
Posted: Mon Jan 19, 2009 5:16 pm Post subject: above edit
In regards to the short sale I was speaking about my home in MI. We've been transferred to TX over a year ago. We can't keep paying 2 mortgages. We thus far are not behind on payments but near the end of our money reserve. Something has got to give.
pt Guest
Posted: Tue Jan 20, 2009 1:03 am Post subject:
In a short sale, the lender has the right to sue you for the deficiency amount. But you can definitely negotiate with the lender so that either he reduces your payments or forgives them.
DP Guest
Posted: Wed Feb 25, 2009 12:50 pm Post subject:
Since you are out of state, I would offer the bank a deed in lieu of foreclosure. Basically you are turning over deed to the house back to the lender. It is cheaper for the bank than a foreclosure; and while it is not perfect it is a step up from foreclosure on your credit report. Still a 200 pt hit.
Guest Guest
Posted: Sat Mar 07, 2009 7:44 am Post subject:
What happens to the 2nd mortgage after a sheriff's sale and the bank bid the amount on the first mortgage? Can they sue for a deficiency judgement? Do they usually do this?
Posted: Sat Apr 11, 2009 9:33 pm Post subject: Forclosure & Deficiency Judgement
Are there lawyers that specialize in this arena? How do I find one? My issue is very complex and I'm not sure where to turn. In short, my wifes old home is 2 months behind since renters aren't paying. I'm not tied to it on any paper and it's still in her maiden name. We use the annual loss on it as a write of on taxes filed jointly, am I exposed there? She is a stay at home mom with no source of income. If she stops paying and it forcloses, her credit will be trashed but will mine be effected? Can they go after assets in her name and what type? Is there a look back period if we remove her from everything?
As the property and the mortgage is in your wife's name, your credit will not be effected if the property is foreclosed upon. Yes, the lender can go after her assets which may include another property, her savings etc. If you remove her from the other properties now it will be considered as a fraudulent transfer.
Feel free to ask if you have further queries.
Sussane
estherj Guest
Posted: Sun Apr 26, 2009 10:41 am Post subject: deficiency judgment in MI-how much per month?
Dear Michiganders,
How much cash can a lender take from you per month out of paycheck or bank accounts? Do the courts limit lenders and or banks to a set amount that they can come after you for? Can my husband and I know as to whether or not we will have funds to live on?
Thank-you for any input.
As far as I know, the court will limit the amount that the lenders can garnish from your bank account or pay check. _________________ Procrastination is the enemy of your financial sucess
bearboysj
