Foreclosure is the process when your lender takes back your home due to missed payments. Obviously, you don’t want to end up in this situation, but it can happen to anyone.
Understanding the foreclosure process is essential because there are several options you can take to get out of foreclosure if you know how things work.
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First Missed Payment
Your lender has the right to begin the foreclosure process on the day after you miss your first payment. For example, if your payment is due on Monday, then the foreclosure can begin on Tuesday.
According to the Michigan State Housing Development Authority, your lender must contact you to alert you that it has begun foreclosing on your home. You must speak with the lender to satisfy this requirement. It cannot leave a message or send you written communication. Typically this will happen anytime between the day after you miss a payment, which is day one, up to day 36.
At this point, you may be able to seek out options to remedy the situation before it gets more serious. You may also wish to involve an attorney to learn how you can stop foreclosure.
On day 45, your lender must give you a written notice of your foreclosure, along with options you have to fix the situation. At this point, it will also assign your case to a servicer, which is an agent that will meet with and negotiate with you. You will have until day 121 to try to work out a deal.
The official foreclosure will begin on this day. The lender will schedule the Sherriff's sale and publish it in the newspaper. The lender must put the notice in the paper for four weeks straight prior to the sale.
Sheriff's Sale and Redemption
The Sheriff's sale is an auction where the public may buy your home. After the sale, you have at least six months but in some cases, it is up to 12 months to buy back your home, which is the redemption period. You must pay the amount paid at the auction and any fees and interest. Once the redemption period is over, your home becomes the property of the auction winner, and you must move out.
Saving Your Home
If you wish to save your home from foreclosure, you have options you can take throughout the process. You just need to understand what those options are and how to exercise them. Your best course of action is to work with a legal professional who can guide you on the legal aspects of the situation.
You may also need to work with an accountant to help get your finances back in order. Even if you do manage to save your home, foreclosure could occur again in the future if you miss another payment. So, you must be sure you can afford to keep the home.
The Foreclosure Process
Foreclosure is a process that takes many months to reach completion. This is a good thing for you because it means that you don't have to lose your home. You may be able to stop the process, get back in good standing with your lender, and save your home.