Michigan - state laws on deficiency

1. My home is not selling.
2. I do not have enough money to pay my mortage.
3. I have just enough money to buy a very cheap house.
4. I also own a building that cannot be sold due to a poor real estate market.

My Question: Will they place a lien on new house and buildig?

Hi Tricia!

Welcome to forums!

I've given my suggestions in regards to your query at:
http://www.mortgagefit.com/problems/foreclosure-purchasehome.html#163915

Take a look at it. Hope it helps you.

Sussane

does a 1099 MEAN THE BANK FOREGIVES THE EXTRA AMONT OWED IN A SHORT SALE

Hi sue!

Welcome to forums!

If you receive a 1099c form from your lender, it will mean that your balance dues have been forgiven by the lender.

Feel free to ask if you've further queries.

Sussane

I signed an agreement with lending company, Green Tree, giving them title to my manufactured home when I lost my job. this was before I was behind on payments. the agreement stated that this would stop them from further attempts to collect from me. 5 years later, they are contacting me demanding I pay them the difference on what I owed and what they sold the home for. The agreement I signed was notarized and sent to them. Can they do this? I also had a clause in my purchase contract allowing for someone else to assume the mortgage. I had a purchaser but the Lending company refused to accept them stating that they don't do this any more. Was that legal on their part. I'm retired, living on Social Security and in poor health and I don't need this happening at this time of my life.

Hi RitaB,

After a foreclosure, the lender can come after you for the deficient balance resulting from the sale of the property. There is nothing illegal in it. You may contact a real estate attorney and take his opinion in this matter.

Thanks

I recently filed bankruptcy Feb '11 and had to foreclose on my second home. I don't know what's going to happen in regards to my second home as to how it will effect my wife and I. The bank on my second home stated they do not sue for deficiency but they will issue a 1099c. My wife and I do not want to owe the IRS

Hi ricco,

As the lender will forgive the deficient balance, you will be liable for paying taxes to the IRS for the same. The IRS will consider the forgiven debt as your income. You can set up a payment plan with the IRS and pay them off.

Take care.

I thought our Real Estate Agent told us that they must file within 4 years in the state of Michigan. If it has been 5 years I would think that they are to late.

If residing in Michigan, how much time does the lender have to go after the borrower for the deficiency? I had read somewhere that lenders have a max of 4 years for the state of MI. Can someone please verify that? I cannot find another source to confirm this information. Thanks.

Hi SCS,

Michigan has a redemption period of 1 year. If you're unable to redeem the property within that period of time, then the lender will have 6 years of time to ask you for the deficient balance. All promissory notes in Michigan has a SOL of 6 years.

If my home was abanded due to foreclosure what happens next. Can I buy another home for cash and have my name on it without the bank putting a lien on my new home. Plan on going bankruptcy after I buy my home but don't know what to do. I am unemployed in Michigan and go from job to job. Flagstar bank does not want to work with nobody. Life is so stressfull!

You can buy another home for cash, but your prior lender can place a lien on that property if he gets a judgment against you to recover the deficient balance. And if you go for bankruptcy, the trustee will have the rights to sell off the new free and clear home in order to pay off your other creditors.

"In Michigan 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 sherrifeed 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." Trying to find out if this is true, don't want to live in fear for the next four years.
Thanks