Posted on: 10th Mar, 2008 04:55 pm
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?
I attempted to sell my home in Michigan in a short sell, but my home was foreclosed on 2-14-10. Recently married, moved out of state. Will our joint bank accounts be at risk by the first and second mortgages that I am liable for in Michigan.
Hi Franklin,
If there's considerable amount of deficiency from the foreclosure sale of your house, the first and second lenders can come after you to collect it. They may get a judgment against you and garnish your wages or come after your bank accounts. Thus, your joint bank accounts could be at risk. It's better to have the bank account solely in your spouse's name to make sure the lenders do not come after it to recover the loan balance.
If there's considerable amount of deficiency from the foreclosure sale of your house, the first and second lenders can come after you to collect it. They may get a judgment against you and garnish your wages or come after your bank accounts. Thus, your joint bank accounts could be at risk. It's better to have the bank account solely in your spouse's name to make sure the lenders do not come after it to recover the loan balance.
I have an 80 20 loan my first is 85,000 when it goes to the sheriff sale and the bank buys it back for 85,000 do I have any deficiency? Even if they sell it at a later date for less can they come back at me for the difference?
to snowfanatic,
if your property is auctioned off at the sheriff sale and the lender purchases it back for an amount same as the outstanding balance on the loan, you will not be responsible for any deficiency. thus, if the balance on the first mortgage is $85k and the property sells off at exactly the same price at the auction, the lender cannot come after you for any deficiency. however, since there is a second mortgage on the property, you will be liable for a deficiency on it and the second lender can come after you for it.
if your property is auctioned off at the sheriff sale and the lender purchases it back for an amount same as the outstanding balance on the loan, you will not be responsible for any deficiency. thus, if the balance on the first mortgage is $85k and the property sells off at exactly the same price at the auction, the lender cannot come after you for any deficiency. however, since there is a second mortgage on the property, you will be liable for a deficiency on it and the second lender can come after you for it.
My ex boyfriend lives in the house that is in both of our names. He is supposed to take care of the house but isn't making any money. We are in Michigan. If he files chapter 7 and is released from the house and I going to be responsible for the whole deficiency? Should I file chapter 7 first to make him responsible?
Hi Sazzle,
If your ex-boyfriend files bankruptcy Chapter 7 and gets discharged from his debts, he will not be personally liable for the mortgage payments. As a co-borrower, you will then be left to repay the mortgage. However, if you also file Chapter 7, you will be released from the liability of the mortgage. However, in that case the lender will foreclose the property to satisfy the mortgage lien. If you do not intend to keep the property, you can file Chapter 7. But this will affect your credit negatively and the bankruptcy will remain on your credit report for about 7 years.
Thanks,
Jerry
If your ex-boyfriend files bankruptcy Chapter 7 and gets discharged from his debts, he will not be personally liable for the mortgage payments. As a co-borrower, you will then be left to repay the mortgage. However, if you also file Chapter 7, you will be released from the liability of the mortgage. However, in that case the lender will foreclose the property to satisfy the mortgage lien. If you do not intend to keep the property, you can file Chapter 7. But this will affect your credit negatively and the bankruptcy will remain on your credit report for about 7 years.
Thanks,
Jerry
Hi
I lost my job and found a new one out of town. I was able to get a mortgage for a 2nd house before selling the "old one". Now that I'm selling it has to go through shortsale since the house has lost 40% of it's value...I'm concerned that if the shortsale is not approved (most likely) it goes to foreclosure and then after it I can be sued to pay for the deficit between forclosure sales price and my current debt (principal)?
I lost my job and found a new one out of town. I was able to get a mortgage for a 2nd house before selling the "old one". Now that I'm selling it has to go through shortsale since the house has lost 40% of it's value...I'm concerned that if the shortsale is not approved (most likely) it goes to foreclosure and then after it I can be sued to pay for the deficit between forclosure sales price and my current debt (principal)?
To shiven,
You will remain liable for the deficiency from the short sale of the property. The lender can sue you for the deficiency and obtain a judgment against you. In case you live in an anti-deficiency state and the statutes of the anti-deficiency laws apply in your situation, you can claim protection against deficiency judgments.
You will remain liable for the deficiency from the short sale of the property. The lender can sue you for the deficiency and obtain a judgment against you. In case you live in an anti-deficiency state and the statutes of the anti-deficiency laws apply in your situation, you can claim protection against deficiency judgments.
i have a 1st mortgage (70k) that was sold at sheiriff sale in michigan, and i am in the 6 month redemption period. i also have a home equity loan (85k). the bidder at auction is telling me that the 85k will go away after foreclosure, and i will not owe anything. they are offering me a cash for keys $5000 to waive my redemption rights. does this sound right?
Your query has been replied to in the given page:
http://www.mortgagefit.com/michigan/owe-secondloan.html#163198
Take a look at it. Hope it helps you.
http://www.mortgagefit.com/michigan/owe-secondloan.html#163198
Take a look at it. Hope it helps you.
I have no savings but do have two other investment properties that
are paid in full. I am on retirement and social security.
Can the lender take my investment properties to pay for a deficientc
judgment?
are paid in full. I am on retirement and social security.
Can the lender take my investment properties to pay for a deficientc
judgment?
Welcome Annie,
The lender may place a lien on your investment properties in order to recover his deficient amount.
The lender may place a lien on your investment properties in order to recover his deficient amount.
Hello,
I have a rental property that may go into foreclosure. I didn't buy it as such, I lived there for 5 years, but then my family outgrew it and my wife bought a house in her name only. I've had tenants in there for the past year, while subsidizing some of the mortgage payment. I cannot afford to keep this up, since I've had a 20% salary cut and my wife has had reduced hours at work as well.
I had a FHA loan in my name only on the rental. Does the FHA cover the top 20% in case of default? There's only 1 mortgage note as well, and if there is a deficiency judgment against me, can the bank sell the 1st mortgage debt to a collection agency? I never had a 2nd mortgage. Thanks so much!
I have a rental property that may go into foreclosure. I didn't buy it as such, I lived there for 5 years, but then my family outgrew it and my wife bought a house in her name only. I've had tenants in there for the past year, while subsidizing some of the mortgage payment. I cannot afford to keep this up, since I've had a 20% salary cut and my wife has had reduced hours at work as well.
I had a FHA loan in my name only on the rental. Does the FHA cover the top 20% in case of default? There's only 1 mortgage note as well, and if there is a deficiency judgment against me, can the bank sell the 1st mortgage debt to a collection agency? I never had a 2nd mortgage. Thanks so much!
Hi nguyenlo!
Welcome to forums!
Rather than letting the lender foreclose the property, it would be better if you could apply for a deed in lieu of foreclosure. This will not only help you in selling off the property, you won't be liable for paying off the balance dues as well. The lender will forgive the balance dues.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
Rather than letting the lender foreclose the property, it would be better if you could apply for a deed in lieu of foreclosure. This will not only help you in selling off the property, you won't be liable for paying off the balance dues as well. The lender will forgive the balance dues.
Feel free to ask if you've further queries.
Sussane
Thanks for the info Sussane. I've contacted my lender for a deed in lieu of foreclosure, but they don't seem willing to work with me. They say it's a rental and they're not going to do a deed in lieu on a rental. It's a rental, but I lived there for 5 years and then my situation changed, so I didn't purchase it as a rental property.
I think I am willing/have to foreclose, and as a last resort, if I get slapped with a judgement, then I will declare Ch.7. I've already been speaking to an attorney regard this.
Can you tell me if the FHA will cover the top 20% of the loan? This will help my decision. After all, that's why I've been paying monthly fha mortgage insurance. I know it protects the lender in case of default, but it also indirectly helps me by lowering the deficiency.
I think I am willing/have to foreclose, and as a last resort, if I get slapped with a judgement, then I will declare Ch.7. I've already been speaking to an attorney regard this.
Can you tell me if the FHA will cover the top 20% of the loan? This will help my decision. After all, that's why I've been paying monthly fha mortgage insurance. I know it protects the lender in case of default, but it also indirectly helps me by lowering the deficiency.