A foreclosure typically occurs when the property owner cannot make the principal and/or interest payments on his/her existing loan.  This default will lead to the property being seized and then sold.  As complicated as this may seem, the foreclosure process is not too difficult to comprehend. There are various stages during which the homeowner has a great chance to bring the loan current and hopefully, avoid foreclosure.

However, there are some things to consider particularly if you can no longer keep up with your mortgage payments. You can list your home with a reputable Realtor who is familiar with short sales, which is when you owe more than your home is worth. A short sale requires the Lender’s approval and you must be sure to request that the lender waive any deficiency remaining after the sale.

There may also be an instance that the owner is ultimately hopeless and accepted the fact that he/she might undergo the Foreclosure process. As a homeowner, this means you have the right to oppose a foreclosure complaint filed against you and should consult an attorney right away.

Here’s what to expect:

Day 1 to 36 

• Take note that the payment is due on the 1^st day and is considered delinquent on the 15th
• Late fees are evaluated for each missed payment.
• The lender should personally communicate with the homeowners to inform them about their missed payments and provide other loss mitigation options.

Day 45 

• The lender should assign a single point of contact to the homeowner and provide a written notification of delinquency and loss mitigation options.

During this time 

• After 45 days, you can work with a lender to obtain a loan workout, a modification or other loss mitigation option.
• Make a partial payment if your lender allows you to.
• If you can’t afford to make the agreed payments, don’t agree to settle with a payment plan.

Day 121 

• If all attempts to resolve the default are unsucessful and the hardship application is not received, the foreclosure process begins.
• The notice of foreclosure is now documented at the local courthouse.
• The sheriff’s sale date is scheduled, and published in the county newspaper for four consecutive weeks – including details of the total amount owed. [Sheriff Sale Held – The Sheriff’s Deed lists the last date the property can be redeemed. (Up until the Sheriff Sale has occurred, homeowner may still submit a loss mitigation application.)]
• Then, the Notice of the sale date gets posted on the property within two weeks of the first publication.

6 months 

• Redemption Period – This period usually starts the day of the Sheriff sale and remains for 6 months. There may be circumstances which can extend this time period.  For example, the redemption period for a property zoned for farming can be up to 12 months.
• Homeowners are allowed to live in their property and aren’t obligated to make payments or can even sell or buy the property back. Homeowners should maintain the utilities, insurance and the property itself.
• Homeowners should allow the purchaser to inspect the home and all auxilliary structures during the entire redemption period. To redeem the property, the borrower must pay: Amount bid at sheriff sale + interest + fees.

 Redemption Period and Inspection 

• Firstly, the purchaser can inspect the outside of the propery without any notice.  They have the right to inspect and assess the entire property and to take photographs, if desired. If the inspection is unreasonably declined, then the purchaser can seek to immediately evict and terminate the redemption period given.
• Seven days notice to repair should be issued if the property is in imminent need of repairs. If the repairs are not made, then the purchaser can seek to evict and terminate the redemption period given.
• The interior inspection can take place with at least 72 hours notice after posting the property notice providing information about the purchaser and inspection rights. The purchaser is free to request additional information after the initial interior inspection.
• When the homeowner schedules their move out date,  they should provide ten days notice to the purchaser of their home.  With proper notification, damages to the property can be minimized and the homeowner can avoid additional liablity for damages occuring during the redemption period.

Eviction

At the end of the redemption period, homeowners must vacate the property.  A summons may be issued, requiring that the homeowner appear in the court. At this hearing, a date will be set for the Sheriff to physically remove you from the property, if necessary.

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Do you have general real estate requests or need a Realtor to represent you in South Lyon, Novi, Farmington Hills, Livonia, Northville, Plymouth, or in any other surrounding Oakland County area? Feel free to contact me.