Stages of Foreclosure
Be realistic: If you cannot afford to keep your home – sell it. List your home with a reputable Realtor who is familiar with “short sales” if you owe more than your home is worth. A short sale requires your Lenders approval. Always ask for a waiver of deficiency from the Lender.
Avoid Rescue Scams: Don’t give someone money who says they can prevent a foreclosure or help you get a loan modification. Don’t sign paperwork you aren’t familiar with or sign a deed over to someone who says they will help you.
Take Action Now: Apply now for up to $30,000 in delinquent mortgage and/or property tax assistance - Michigan homeowners can apply directly at stepforwardmichigan.org or by calling 866-946-7432.
Contact a MSHDA approved agency for other free assistance. Find a Housing Education Counselor.
Day 2-36: The mortgage payment is due on the 1st. If the mortgage is not paid on the 1st, it is considered delinquent on the 2nd. If the payment is late, late charges are assessed for each missed payment. The Lender/Servicer must make LIVE contact with the homeowners who missed their payment to inform the homeowner about loss mitigation options.
Ask your lender, “What are my options, what do I qualify for?”
Day 45: The Lender/Servicer must assign a single point of contact to homeowner AND provide written notification of delinquency and loss mitigation options.
Big 5 Servicers: Bank of America, Chase, CitiMortgage, GMAC/Ally and Wells Fargo. These 5 servicers will designate an agent (law firm) to facilitate negotiations and attend a meeting with the homeowners.
During the time between Day 45 and Day 121: You can work with a lender to obtain a loan workout, a modification or other loss mitigation option. If your Lender allows you to make a partial payment – make it.
Do not agree to a workout plan if you cannot afford to make the payments.
Day 121: If all attempts to resolve default are unsuccessful and a hardship application is not received, the foreclosure process begins. The Sheriff’s sale date is scheduled and then published in the county newspaper for four (4) consecutive weeks with details of the debt. Notice of the sale date gets posted on the property within two (2) weeks of the first publication.
Sheriff Sale Held: The "Sheriff's Deed" lists the last date the property can be redeemed. Up until the Sheriff Sale has occurred, the homeowner may still submit a loss mitigation application.
Six (6) months: The Redemption Period starts day of Sheriff Sale – Six (6) months is most common. If the amount claimed to be due on the mortgage at the date of foreclosure is less than 2/3 of the original indebtedness, the redemption period is 12 months. Farming property can be up to twelve (12) months.
The homeowner can live in the property, is not required to make payments, can sell or buy back property and should - *maintain the property - *maintain utilities - *maintain insurance. The homeowner must allow the purchaser to inspect the home and all structures during the redemption period.
To redeem the property the borrower must pay the amount bid at the sheriff sale plus interest and fees.
Redemption Period Expires: Home Inspections: If an inspection is unreasonably refused or if damage to the property is imminent or has occurred, the purchaser of the property at the Sheriff Sale may immediately begin eviction proceedings to seek possession and terminate the homeowner’s redemption period. Once you move out, the purchaser (normally the lender) may take action to gain possession of the abandoned property.
EVICTION: At the end of the redemption period if you have not already vacated the home you will receive a Summons to appear in court. At the hearing, a date is set for the Sheriff to physically remove you from the property, if necessary.