Legal Question in Real Estate Law in Michigan
As of July 2012, our property is worth 93 to 94% less than the loan amount. I would like to avoid a foreclosure, but I do not wish to keep my home nor have the funds to pay off the loan. We are looking at a strategic default on our mortgage. Does the state of Michigan allow �deficiency judgments� also, what are my financial and tax exposures at this time?
1 Answer from Attorneys
What you are describing is a short sale. Typically you must be behind on your payments for the bank to consider a short sale. It is worth the credit hit to miss a few payments and then start speaking with your bank about getting approval for a short sale.
Yes, in a foreclosure, the bank can come after you for the deficiency. A short sale allows you some control. You must list your house with a realtor and work to sell it. Once you have approval for a short sale, the bank will not foreclose in order to give you an opportunity to sell it.
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