Foreclosure in MI 1st and 2nd mortgage.
I have a Michigan foreclosure question, went chapter 7 in 02 discharged
01/03 had 2 mortgages on our home which we kept making the payments, did not
reaffirm. 1st $222,000 2nd $70,000. Well 2nd mortgage company stopped
taking our payments, and did nothing for 15 months, then they sold the
mortgage to a CA company BlueView. BV foreclosed on the house we still have
4 months left in redemption period. We hade been current with the 1st
mortgage until Feb 04, well they are starting foreclosure now they have been
very professional no harassment just letters from their attorneys telling us
what they are doing, and that they have a lien on property but not against
us. BV owners of the 2nd mortgage have called us 6 or 7 times. Each time
there has been some kind of a scare tactic about us owning them all the
money they lost in buying the second mortgage, well now they are trying to
buy the first before the sheriff sale from 1st mortgage company and their
attys. BV called us up and said we are getting evicted on the day that the
sale is final. I called the 1st mortgage attys and they said not so in MI,
called my atty he said the same thing, but he said don't worry about BV they
can't do anything. I got the feeling that he did not want to spend more
time on the matter. We will ether redeem or vacate the house before the
redemption date. So my question is does anybody think I have anything to
worry about.
Here's a link I found that describes the foreclosure process in Michigan:
http://www.realtytrac.com/education/noframes/documentation/HowToBuyFo...
How much is the property worth right now?
If it is worth more than the balance due on the 1st and 2nd mortgage, plus
the cost of selling it, it might be a good idea for you to just sell it now.
That way you get rid of the foreclosure process and you get to keep whatever
you make on the property. You can often even find investors who will do a
sale/leaseback -- meaning they buy it from you, but you stay there as a
renter. Usually, you would get more money just selling outright without
looking for a sale/leaseback deal, but both are possibilities.
If it is worth less than the balance due on the two mortgages, you might
want to just stop paying everything and live there as long as you can while
you save up money (from the unpaid mortgage and tax payments). Then, when
all of the foreclosure stuff goes through and they get whatever kind of
order they need to get you moved out, you can leave and start over. I think
that since you are personally off the hook on the mortgages, you won't owe
anything after the foreclosure when you finally leave. If you don't pay the
taxes, water, etc., those liens will be on the property and not on you, when
you leave the premises.
I am not an attorney, so I don't know if any or all of the above is true.
But, you should definitely check with an attorney before doing anything.
Do you know that, if you want to, you can now do a Chapter 13 filing to try
to keep the house? Anytime after a Chapter 7 discharge, you can do a
Chapter 13. So, if your income is sufficient, you might be able to file a
Chapter 13 and then you would have to keep making you current mortgage
payments and also pay money to catch up on the back payments over 3 to 5
years. The Chapter 13 would stop the foreclosure.
If the house is worth les than the total now due on the 1st and 2nd
mortgages, you may be able to get the Chapter 13 trustee to "strip off" all
or part of the second mortgage that BV now owns.
Since your bankruptcy attorney seems less than interested in what happens,
you might want to contact other bankruptcy attorneys in your area and ask
about the Chapter 13 idea, etc. On the other hand, your original bankruptcy
attorney might already know that none of the above ideas will work because
he/she knows your specific situation.
Again, I am not a lawyer, and I don't even live in Michigan, so these are
just some of my thoughts about possible options you could consider