Legal Question in Real Estate Law in Michigan

Re: about foreclosers

Well, it really depends on whether or not you are the person foreclosing, or the person, or persons, being foreclosed upon. I assume, for the sake of this question, that you are being forclosed upon. And I make that assumption not because of this forum, but because usually only banks foreclose on loans.

Furthermore, for the purpose of this question, I assume that you were foreclosed upon by notice, not by judicial foreclosure, that is, you are not being sued.

What happens is that the bank has started a procedure in which they sell your house/property at a public auction to the highest bidder. You will recieve notice of this sale, and in this notice, it should tell you that you have 6 months to "redeem" the property. This means that within six months of the sale that you have to come up with the cash to buy the house from the person who bought it at the sale. Note the price you have to pay is not what you owed the bank, now it is the amount of the sale, plus whatever interest accrued since the sale. The interest on the sale price is at the same rate as your note with the bank. So if your mortgage was at 8.5 percent, the sale price accrues interest at 8.5 percent. There may be some additional costs as well, but they are nominal (not much).

So you really have three choices: (1) buy the property within 6 months for the auction sale price plus interest; (2) live in the house for 6 months for free ( and then the new owner will have to take you to court to kick you out, and that should take an additional couple of weeks at least); and (3) seek bankruptcy counsel, because, if you file a chapter 13 wage earner case, you can force the bank to let you pay the arrearage on the mortgage over the term of the chapter 13 plan. I should also let you know that if the sale has yet to happen, you can stop foreclosure with the filing of a chapter 7 plan, and then maybe work something out with the mortgage company to get the mortgage payments current. You may or not may not be eligible to file either plan, and there are too many variables to discuss it here.

Good luck to you.

Don Darnell