jhkogger, Home Buyer in Rochester Hills, MI

if i redeem my home for the sheriff sale amount will the mortgage company come after me for the remaining $70k difference? in michigan

Asked by jhkogger, Rochester Hills, MI Mon Jan 28, 2013

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This question was asked from this property: http://www.trulia.com/property/1075230126-251-Mystic-Vly-Roc…

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7
The have the ability to do it, but do they.............not very often. However the second mortgage company may.
0 votes Thank Flag Link Sun Mar 10, 2013
Edward,

To clarify, I was not referring to your answer being incorrect. I was referring to the out of state agent. I still feel out of state agents should not advise in our state when they are not familiar with our laws.

Kathy Persha
GRI, SFR, CDPE, CIAS
Nextage Advanced Realty
248-930-0198
0 votes Thank Flag Link Sun Feb 3, 2013
Since my previous answer is "not correct" I will be more blunt
1. You can redeem the property and you could be liable for the difference or
not... Haven't seen one yet
2. You can sell the home and retain the difference and still be liable for the difference, or
not... Haven't seen one yet
Like I said, I've done more than 150 of these in the past 4 years and haven't seen one yet..
Second mortgages, well, thats another story. It all depends if it was sold or it was with a different lender.
I am not going to explain it here.
Ed Harris
0 votes Thank Flag Link Sun Feb 3, 2013
JHkort31,

Your home is currently waiting short sale approval. You should see if your agent can speed things up so it goes through before the sheriff sale.
Even if the sheriff sale goes through, if you stay in your home, you will have 6 months to redeem your property. That means the short sale can still take place. With the short sale approval, you are looking to get your debt forgiven (the difference between what the home sells for & what you owe. They will not be able to sue you in the future.
If you are looking to redeem your home, you can do so after the sheriff sale for the amount it goes for at the sheriff sale. I'm not 100% sure but I think if you did that, they could still come after you for the difference. It's more likely they will come after you if this is an investment home & not your principle residence.
It is probably in your best interest to continiue with the short sale.

Hope this helps you. I wish you the best
0 votes Thank Flag Link Mon Jan 28, 2013
what if i as an agent have an offer greater than the sheriffs sale and wells Fargo declined
the short sale??
Flag Mon Oct 13, 2014
The previous answer is incorrect for Michigan. Agents unfamiliar with the laws in our state should refrain from answering questions that they are unfamiliar with.

Michigan is a redemption state. That means during the six month redemption period you can redeem your house for the amount that was bid at the sheriff's sale. By your question, I am assuming that the lender "underbid" at sheriffi's sale. This would mean that they bid less than what was owed on your mortgage. So, if you pay the amount that they bid plus the interest that is do to them, you would own your house free and clear. Or, if you prefer, you can sell your house and payoff the redemption amount during that sale. If the house sells for more than what you would need to pay the lender, then you get to keep the difference.

For example, I recently had a client who owed $225,000 on their mortgage. The bank, for some unknown reason bid $45,000 at sheriff's sale. We sold the house for $125,000 and the homeowner walked away with a check for about $60,000 after the closing.

The lenders are "underbidding" about 1/3 of the time today. By underbidding they can come after you for the deficiency. So in answer to your question, if you redeem your house, yes they have left their options open to pursue deficiency in the future. Will they do it? That is anyones guess at this point.

Kathy Persha, Realtor
GRI, SRF, CDPE, CIAS
Nextage Advanced Realty
248-930-0198
kathy@kaperproperties.com
0 votes Thank Flag Link Mon Jan 28, 2013
I have done no less than 150 of them in the past 4 years.
There is a way to minimize that possibility...
Never had one yet come back to bite one of my clients.
Ed Harris ed@edwardtharris.com or
248.566.6458
0 votes Thank Flag Link Mon Jan 28, 2013
1. I doubt that you will be allowed to bid on your home; It is called an "Arms Length" transaction; you cannot benefit from the sale.
2. I doubt that you could buy your house for the amount that it will sell for; the Bank will probably outbid everybody.
3. YES, the Bank probably would go after you for the deficit; but, as I've explained, it probably won't happen that way.
4. The odds are, the Bank will complete the Foreclosure and own the house, then sell it.
5. Michigan is a Recourse state; so your Bank can come after you for the Deficit: The questions therefore would be; do you have any assets that they would want, and, how long have they to file the Deficit Judgement. We have no idea; this has been fully tested in the courts.

Good luck and may God bless
0 votes Thank Flag Link Mon Jan 28, 2013
thomas michigan is a non recourse state
Flag Mon Oct 13, 2014
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