Legal Question in Real Estate Law in Michigan
I have sort of a unique situation. A little over three years ago I moved away from Michigan for a job. After getting a renter that, in the end, needed to be evicted, and left my home in Pontiac, MI trashed, I have been trying to do a short sale on the house. The Lender is not budging on what they say the house is worth, but the value they assigned is a bit higher than the comps in the area, and they seem unwilling to accept a current offer of only $9000 less than what they say the value is. I have been on a forbearance plan since February, but it is near the end and I have no desire to bring my payments current or keep the house, and the lender just informed me that they no longer allow forbearance plans and I must be 60 days late to qualify for a loan modification. But again, I have no interest at all in keeping the house. I already have a house in Kansas where I work, and my family would be fine if it were not for paying for the mortgages and utilities on the house in Michigan. My only concern is if I were to allow Foreclosure to occur, or Deed in lieu, or whatever, is there a way to keep the lender from coming after me for the remaining balance? I know that generally, with a short sale the balance is "forgiven", but everything I see about Foreclosure or Deed In Lieu, says they they will most likely come after you for the balance, and it may include garnishing wages or freezing your bank accounts! I am just trying to get some advice based on facts so that I can make an informed decision and get my family out of this stressful situation.
3 Answers from Attorneys
The only piece of advice I can give you is that short sales are not forgiven debt. The lender will not "sign off" on that debt at closing and can come after you the same as a foreclosure. Everything else you cite to is correct. You must keep on your path to a short sale, or you will choose one of the other options, including bankruptcy if you have other debts. Tim Klisz kliszlaw.com
If you would like to discuss this with me call 810-227-7200
A real estate attorney may be able to negotiate your short sale, or your deed in lieu with forgiveness of the deficiency. Don't think that you can "just walk away", you must keep working on this, and an experienced attorney can handle this better than you can. The whole point of a short sale, or a deed in lieu is to SAVE the bank the cost of foreclosing, so banks will OFTEN waive the shortfall or deficiency, but don't take their word for this, have a lawyer read your documents before you sign, to make sure that they have waived it.
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