Are you a Michigan homeowner concerned about foreclosure? If so, you should know that you’re not the only one. Foreclosures in Michigan are on the rise, and if you’re at risk of losing your home, you might not know what to do.
This blog post provides an overview of Michigan’s foreclosure process and explores your options if you are facing foreclosure. Additionally, we will suggest ways to avoid foreclosure if possible.
Keep reading to learn how to protect your credit if you are faced with foreclosure for the first time or are just curious about how the process works.
What is a Foreclosure, and How Does it Work in Michigan?
Foreclosure occurs when a lender seeks to recover a borrower’s unpaid loan balance from a defaulting borrower. In Michigan, borrowers who are past due for over 120 days can be foreclosed through the judicial or nonjudicial process.
How to Avoid Foreclosure
If you’re having a tough time making your mortgage payments, you may think foreclosure is unavoidable. However, there are ways to avoid foreclosure, so it is important to explore all your options before taking action.
Below are some of the ways you can avoid foreclosure in Michigan.
Refinance Your Mortgage
Refinancing your mortgage may be possible if interest rates have decreased since you took out the loan. With a refinance, you can lower your monthly payments and make them more affordable.
Modify Your Mortgage
A modification of your mortgage terms may be an option if you are having trouble making payments. You may be able to extend the loan term or change the interest rate.
Sell Your Home
Mortgage payment problems might be solved by selling your home. Your loan can be paid off with the proceeds of the sale.
How to Stop or Delay Foreclosure
If you’re facing foreclosure, you can do a few things to delay or stop the process.
Reinstate the Loan
There is no statutory right to reinstate the loan before the sale under Michigan law. However, many mortgages give the borrower the right to reinstate the loan after acceleration. You should check your loan documents to see if you qualify for a reinstatement right and, if so when the reinstatement must be completed.
Redeem the Property
Michigan’s redemption period depends on how much the borrower has paid off on the loan at the time of foreclosure and the home’s occupancy status.
- In the case of debts exceeding 66 percent and 2/3rds of the original loan amount, you have six months to redeem.
- If you owe less than 66 and 2/3rd% of the original loan amount, you can redeem it within one year.
- The redemption period for abandoned homes is 30 days after the sale or until the lender considers the premises abandoned, whichever comes first.
File for Bankruptcy
Bankruptcy might not be ideal, but it can protect you from foreclosure. The automatic stay prevents lenders from foreclosing or collecting debts after filing for bankruptcy. Learn about your options by consulting a bankruptcy attorney.
What to Do if Foreclosure is Inevitable
The last thing anyone wants is to deal with foreclosure, but it’s extremely important to know what to do if you find yourself in that situation. To make informed decisions, you should understand how foreclosure works, be familiar with state foreclosure laws, and be aware of your options.
The Process of Foreclosure in Michigan
Foreclosures in Michigan can take either judicial or nonjudicial forms if you default on your mortgage payment.
Judicial Foreclosures
A judicial foreclosure occurs when a lender files a lawsuit asking a court to approve a foreclosure sale. In the absence of a written response, the lender will automatically win the case. If you decide to defend the foreclosure lawsuit, a court will review the evidence, and the winner will be determined. If the lender wins, a judgment will be entered, and the house will be auctioned.
Nonjudicial Foreclosures
Lenders who choose nonjudicial foreclosure must follow the out-of-court procedures described in state statutes. Once the lender has completed the required steps, the home can be sold in a foreclosure sale. Lenders typically use a nonjudicial process because it is faster and less expensive than a court case.
Foreclosure’s Aftermath
Homeowners and communities can suffer severe consequences when a property is foreclosed. Due to the damage to their credit score, foreclosed homeowners may have difficulty finding new housing. In addition, it can be challenging to get a mortgage or new credit line. Due to the lack of affordable housing, foreclosures can also lead to homelessness.
Foreclosure can also negatively impact a community. Aside from reducing property values, abandoned and empty homes are safety hazards. Vacant homes can also be a target for criminals.
A better future can be achieved by knowing your rights and options when facing foreclosure.
Resources for Homeowners Facing Foreclosure in Michigan
If you are facing foreclosure in Michigan, several resources are available to help you. The U.S. Department of Housing and Urban Development helps homeowners avoid foreclosure through foreclosure prevention, counseling, and assistance.
There are also private foreclosure assistance programs that can help you weigh your options. Be sure to research these programs before choosing one, as they often charge a fee.
Favor Home Solutions Can Help You Avoid Foreclosure in Michigan
It is undeniable that the foreclosure process is stressful and challenging. Your credit can be seriously damaged, causing a dent in your financial future. If you are feeling overwhelmed by the prospect of foreclosure, you should consider selling your home to a home buying company like Favor Home Solutions.
We offer fair, no-obligation cash offers to help you regain your peace of mind and move on with your life, free of foreclosure. Best of all, you don’t have to worry about paying fees or commissions with us. We also take care of all repairs and decluttering, so you don’t have to!
Find out how we can assist you during this difficult time by contacting us today!
