Michigan: buying foreclosed parent's home

[michiganre]

What is the name of your state (only U.S. law)? Michigan
Our parent's house was sold at sheriff's sale on May for HALF the price they owed to the mortgage company . It looks like Michigan law has a 6 months redemption period, we still have to a chance to get the house back for the price it was sold at sheriff's sale plus some minor fees. Questions:
1. How do we start the actual redemptions process, is it as simple as a regular sale? Who owns all the legal documents on the house now - the person who purchased it at sheriff’s sale? Bank? Or our parents?
2. Does the person who purchased the house have any rights for it during the redemption period? He got that nice property for a really pretty price and ,I bet, he is ready to fight for the right to own it.

 

[CSO286]

What is the name of your state (only U.S. law)? Michigan
Our parent's house was sold at sheriff's sale on May for HALF the price they owed to the mortgage company . It looks like Michigan law has a 6 months redemption period, we still have to a chance to get the house back for the price it was sold at sheriff's sale plus some minor fees. Questions:
1. How do we start the actual redemptions process, is it as simple as a regular sale? Who owns all the legal documents on the house now - the person who purchased it at sheriff’s sale? Bank? Or our parents?
2. Does the person who purchased the house have any rights for it during the redemption period? He got that nice property for a really pretty price and ,I bet, he is ready to fight for the right to own it.

If you are in a position to redeem the property, why did you not help your parents avoid the FC in the first place?

http://www.foreclosuredefense.com/foreclosure/foreclosures-salehow-redeem-property-foreclosure/

Specific to Michigan: http://www.michigan.gov/mshda/0,4641,7-141-45866_62889_47905-177816--,00.html

In order to redeem the property at this point you must pay off the mortgage, all interest and late fees, court costs, attorney fees, title and appraisal fees. If the sheriff deed holder paid taxes or insurance after the sheriff sale, the mortgagor must pay those fees as well. Redeeming the property by getting another mortgage is very difficult because of the bad credit rating that resulted from the foreclosure. Redeeming the property by selling it on the market is often a good option. If the property is redeemed, the original rights and obligations of ownership are reinstated.

 

[Mass_Shyster]

What is the name of your state (only U.S. law)? Michigan
Our parent's house was sold at sheriff's sale on May for HALF the price they owed to the mortgage company . It looks like Michigan law has a 6 months redemption period, we still have to a chance to get the house back for the price it was sold at sheriff's sale plus some minor fees. Questions:
1. How do we start the actual redemptions process, is it as simple as a regular sale? Who owns all the legal documents on the house now - the person who purchased it at sheriff’s sale? Bank? Or our parents?
2. Does the person who purchased the house have any rights for it during the redemption period? He got that nice property for a really pretty price and ,I bet, he is ready to fight for the right to own it.

According to what CSO286 posted, you don't get it for the price it was sold at the sheriff's sale. You get it back by paying off the balance of the note, which, according to your post, is twice what it sold for at the sheriff's sale.

 

[michiganre]

If you are in a position to redeem the property, why did you not help your parents avoid the FC in the first place?

many reasons: they didn't tell us until the very last moment, thinking it shouldn't be our issue. Both of them were in hospitals pretty much the whole last year. They simply didn't have time and energy to deal with any loan modification procedures. etc,etc

 

[justalayman]

many reasons: they didn't tell us until the very last moment, thinking it shouldn't be our issue. Both of them were in hospitals pretty much the whole last year. They simply didn't have time and energy to deal with any loan modification procedures. etc,etc

It will cost more than what they owed on the mortgage due to the addition of considerable fees and such due to the sale. It is all due in full within that 6 month redemption period. Still interested in going forward with this?

 

[michiganre]

wow... something fishy about this forum, answers and people participating here... I posted several comments with links that pretty much show the opposite of what the 'experts' say here, but none of them were posted. I bet this one won't be posted as well..

 

[Zigner]

wow... something fishy about this forum, answers and people participating here... I posted several comments with links that pretty much show the opposite of what the 'experts' say here, but none of them were posted. I bet this one won't be posted as well..

 

[michiganre]

To all who replied - thank you. I found an official document legal document describing the details, tried to post the link with no luck here. Bottom line - we'll be able to buy the property at the price it was sold. Not what 'the experts' say here.

 

[justalayman]

Um, no.

http://www.michigan.gov/mobi/mshda/0,,7-141-45866_62889_47905-177816--,00.html


Read through that. You will have to pay off the original mortgage. The state will return the buyers money, in effect rescinding the sale (except for the interest and taxes owed to the buyer, if any which are only some of the monies in excess of the entire mortgage that you must pay)
Here are the actual statutes dealing with the issue

http://www.legislature.mi.gov/(S(2gbgqpie01jnufvge4x2nc55))/mileg.aspx?page=getObject&objectname=mcl-600-3240


And take note, that is about as authoritative as you are going to get given it is the laws that control the actions of the forclosure

 

[michiganre]

ok, but during that redemption period they still have a right to sell it to anyone they want, correct? at least they'll get a better price if they put it on the market.

 

[justalayman]

I believe I may understand why you mistakenly believe all you have to pay is the purchaser his money. You somehow have ignored that the mortgage lender is owed the full amount of their mortgage. They aren't going to get screwed out of money by allowing a shady person allowing their home to go into foreclosure and then get scooped up at auction and be forced to allow the original buyer to then be released from their mortgage by paying the auction price.

That can sort of be done but to do it, the owner would have had to bid on their own house

 

[Zigner]

Um, no.

http://www.michigan.gov/mobi/mshda/0,,7-141-45866_62889_47905-177816--,00.html


Read through that. You will have to pay off the original mortgage. The state will return the buyers money, in effect rescinding the sale (except for the interest and taxes owed to the buyer, if any which are only some of the monies in excess of the entire mortgage that you must pay)
Here are the actual statutes dealing with the issue

http://www.legislature.mi.gov/(S(2gbgqpie01jnufvge4x2nc55))/mileg.aspx?page=getObject&objectname=mcl-600-3240


And take note, that is about as authoritative as you are going to get given it is the laws that control the actions of the forclosure

But - But - But -


He's got an OFFICIAL document!

 

[justalayman]

ok, but during that redemption period they still have a right to sell it to anyone they want, correct? at least they'll get a better price if they put it on the market.

Only if the mortgage lender allows it.

In the situation you just suggested the house is reclaimed from the auction but that means there is still the existing mortgage with the original lender to pay off since in effect, the foreclosure would not have taken place