Foreclosure in 48327>Question Details

Bigmex71, Home Owner in Michigan

Bank bought back the house at sheriff auction for full price, do I now have to wait for the bank to sell the house to see if I owe for a deficiency?

Asked by Bigmex71, Michigan Tue Apr 23, 2013

Sold 10/2012

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Kathy Persha’s answer
Agents, if you are giving advice on deficiency judgment after sheriff's sale, please go back to the Realtor Magazine from last year and get the facts right. Or take some training on foreclosures, deficiency and short sales. Let's not give incorrect advice.

Kathy Persha
0 votes Thank Flag Link Tue Apr 23, 2013
In a sheriff's sale, if the bank bids a "full bid", that means that they bid the entire amount that you owe them plus late fees and legal fees, then in Michigan, you will have no deficieny judgment. Anyone knowledgeable in short sales and Michigan foreclosures would know this. Also, the Realtor magazine which all of us agents receive had an article about this very question about a year ago and confirms this fact.

If the bank had "underbid" at sheriff's sale, then they would have left the right to pursue deficiiency judgment open to come after you in the future. An underbid is when the bank bids less than what you owe at the sheriff's sale.

If I were you, I would make sure that you have a statement or proof from either your bank or foreclosing attorney that your bank did indeed bid the full price at sheriff's sale. This is your safeguard that they cannot pursue you in the future.

All the other agents keep mentioning a short sale. Since Michigan has a 6-month redemption period after the sheriff's sale, that is something that you can pursue if there is still a minimum of 4-6 months left of your redemption period. When there is a short sale after foreclosure, the deficiency judgment becomes a negotiable point in the short sale approval. Most of the time, the bank will waive deficiency but sometimes they will not. The only advantage of a short sale to you would be in getting a mortgage in the future. The normal time frame for getting a mortgage after a foreclosure with a traditional mortgage company or bank is 5-7 years. If you have a short sale after a foreclosure, to creditors, it looks like you had a problem and then tried to make it right. In that scenario, you might be able to get a mortgage to buy another house with a traditional mortgage company or bank in 3 years.

There is a local bank that I work with will do a mortgage for someone right out of foreclosure or short sale if they can meet their criteria. I have gotten some of my other clients financed with them. If you would like more information feel free to contact me and good luck to you.

For more information about foreclosure in Michigan and short sales, visit my website at

Kathy Persha, Broker
Nextage Advanced Realty
1 vote Thank Flag Link Tue Apr 23, 2013
At this point, I would place a call to a real estate attorney. The bank cannot have it both ways. They can't issue a 1099 and also try to collect a deficiency. As a licensed Realtor, I'm not allowed to say anymore. If I did, I could be accused of practicing law without a license; so at this point, I can only refer you to an attorney for more information. A great one that I work with is Craig Aronoff. . His number is 248-977-4182. Good luck to you.
Flag Sun Feb 9, 2014
This is confusing to me for this reason. I had a home in Michigan. We tried to short sale it and the buyers and the bank could not come to an agreement on the value so it fell through. We foreclosed. It sold in November at the Sheriff sale for the full bid of $135k, the loan balance was $117k. I just received a 1099 stating these amounts. However, I also received a letter of collection for $52k on behalf of Fannie Mae claiming it is for the deficiency on the home. How does that work?
Flag Fri Jan 31, 2014
what does it mean when the bank buys back the house that was scheduled for sheriff sale and no one wanted it, so it went back to the bank
0 votes Thank Flag Link Mon Jun 30, 2014
there is an agency named Foreclosure Prevention of Michigan who for a fee will subpoena all records and file to have Sheriffs sale put on hold to see if there were any errors in the is this a scam
0 votes Thank Flag Link Fri Jun 6, 2014
I have this exact thing also happening to me in Pontiac. The house sold at sheriff sale on 5/22/12 for $143,000 and the bank was the purchaser. We owed 112K on it and the property value was 35k. (or lower). We have very little other debt but we also have very little income and lots of small children. We are afraid to file bankruptcy but don't want this to come back to haunt us in the coming years. We moved out of the home 12/22/13 and are renting a new place. We stayed in the home a long time due to all of the hold ups in court since we did hire an attorney to see if we could get more time. Will the bank try to come back on us for the deficiency or is there even a deficiency? There is no clear cut answer to any of these foreclosure situations. Its like trying to reinvent the wheel here. Please any suggestions help. Kim
0 votes Thank Flag Link Sat Feb 8, 2014
Like they are saying it depends on when it went to sheriff sale. If it was in October then yes it would be too late to do a short sale, I didn't see where it said that. If you would like for me to still try to pull it up and find out where it is at so that you know, then just contact me and I can definitely do so. If the redemption is over then you would have to wait to see when they sell it how much they sell it for and if a deficiency is owed. Unless there was some type of release negotiated with the bank then typically a deficiency balance may still be owed to the lender, unless they sell it for more than what is owed to them. I would perhaps then advise to contact an attorney to see what your options might be.
0 votes Thank Flag Link Tue Apr 23, 2013
If the sheriff sale was in October 2012, than your 6 month redemption period is just about over. Therefore, it is too late to do a short sale, you will have a foreclosure on your credit and there should not be any deficiency owed to the bank from you.
0 votes Thank Flag Link Tue Apr 23, 2013

Since the sheriff's sale took place in 10/2012 I assume it's too late to do a short sale since the redemption period would be over.

Karen Paytas, GRI, CMS
Real Living Kee Realty
0 votes Thank Flag Link Tue Apr 23, 2013
hi, my mothers home goes to sheriff sale on august 29th, i want to buy the home back since it was the house i was raised in and it is all i got left to remember my mother. how would i do so please let me know 586-201-8081
Flag Fri Aug 22, 2014
Also, the previous agent who commented here about the one-time exemption was talking about the tax debt forgiveness, which is completely separate from deficiency that you would owe your lender if they sell the home for less than the amount owed, plus they tack on additional costs associated with the foreclosure process including legal & attorney fees, costs associated with repairing the property if needed, maintaining the property while they have it for sale, etc. The best way to get out of this situation is to do a short sale and see if we can negotiate with them to get a full release from your lender so you won't owe them anything when it's all said & done! Most times they will agree to release the deficit as they would rather do this than have to go thru the whole foreclosure process. And even if the home needs repairs, in a short sale we sell the property AS IS, and the new buyer would be responsible for repairs, so you don't have to worry about making repairs either. There are even a couple situations where you could possibly receive money back at closing, I can run those scenarios by you to see if either might be a possibility! Again please call me or text ASAP at 248-701-1677 or email
0 votes Thank Flag Link Tue Apr 23, 2013
Give me a call! We can help you do a short sale, and there is no cost to you. We charge the fees to the new buyer and we work with the bank to negotiate a full release for any deficit amount you might owe. You can reach me at 248-701-1677. Even if you don't want to do a short sale, still give me a call, I can tell you how everything works and give you some good information & options. We specialize in short sales and I can help you get out of that situation!! I may even already have a buyer as we currently have several buyers in the Waterford area!
0 votes Thank Flag Link Tue Apr 23, 2013
Good Afternoon!

Was this your primary residence? If so, you are entitled to a one-time exemption to any deficiency judgement. If not, your lender should mail you a 1099 for the deficiency amount after sale.

Good Luck,

Karen Paytas, GRI, CMS
Real Living Kee Realty
0 votes Thank Flag Link Tue Apr 23, 2013
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