Michigan Foreclosure...?
Question:
A little over a year ago the home was refinanced (the second time in a little over 5 years) for the full purchase price and equity (a total of a little over 120 grand). She claims that she made a payment plan with the mortgage company (cant say how true that is) and went yesterday to make the first payment according to the plan. The mortgage company told her that in essance it was too late and that the home was/will be auctioned Thursday. Apparently it has been in the paper for this auction for the last month (we knew nothing of this). The mortgage company also told her that she would have to pay $4,000 to stop the auction sale. So if she doesn't come up with this money and the home is sold at auction, how long does she have to stay in the home? Can she try and sell it herself?? Is there still a chance to save the house?
Answer:
It depends on what you mean by 'save'.
MI foreclosures have the right of redemption. Even after the auction the borrower/owner can redeem the property by paying all the back payments, the full debt and all the costs.
It might not make sense financially to save the house. It might cost a lot more to do so than just finding a new home.
Clearly you are coming late to the discussion. I would speak with the lender ASAP. You likely will need to get a signed copy of a release form so that they will discuss your MIL's situation as you are not the borrower (privacy issues).
Check to see what the $4K covers. Is that a fee, the back payments and legal costs or something else? There should be a lawyer handling the foreclosure. You want to know that they are not adding in things that should not be included. Not all that likely but you need to check the facts to be sure.
Below is an outline of the generic foreclosure process. Written for investors but it will give you an overview.
Consider hiring a lawyer but with so little time you will need to get one that can move quickly.
Clearly your MIL does not understand so even when the dust settles she has to agree to advice on future matters. She made some mistakes and does not seem to know how she arrived in the present situation. She needs an education or someone else to manage her affairs.
RIGHT NOW - Throw her in the car, go visit a lawyer, file for bankruptcy. Now, not later, not this afternoon, NOW.
That puts a stay on the sale, then have your mom tell you the other 90% of the story. It takes many months to get to sale, she has been keeping it from you
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