Alternatives to Stop Foreclosure in Michigan
Determining the best way to deal with your foreclosure situation and understanding your various options to stop the sale can feel overwhelming. We are here to help! Our experienced team of foreclosure prevention attorneys have the knowledge and experience you need to discover the best way to deal with your foreclosure and gain peace of mind during this challenging time.
Call one of our licensed attorneys today at 866-261-8282 to discuss your circumstances. We offer a free consultation to review your finances, discuss your available options and provide a comprehensive recommendation on the best course of action.
Ways to Stop a Foreclosure Sale in Michigan
There is a lot of information and even misinformation about how to stop a foreclosure sale in Michigan. Below we outline the pros and cons of available options to find a resolution to your foreclosure situation.
- Pay-off all delinquent amounts owed including legal fees and penalties, in full, by the date designated by your mortgage company.
- Benefits: Monthly mortgage payment remains unchanged.
- Disadvantages: Most people do not have a lump sum of money available to make this large payment. We typically do not recommend incurring additional debt with a 401K or retirement loan or borrowing money from a friend or family member to bring the mortgage current. This only creates an additional debt and burden on your budget and may create unexpected tax consequences and debt servicing fees.
- Chapter 13 Debt Consolidation
- Benefits:Prioritizes your mortgage above all other debts so you can focus on catching up on the mortgage first then pay the other obligations later, likely at a reduced rate.
- Filing a Chapter 13 Bankruptcy will legally stop the foreclosure sale and set up reasonable repayment terms.
- Plan also allows you to remove second mortgage(s) and/or home equity loans to rebalance your home’s value relative to current market conditions.
- Program allows you prioritize mortgage repayment over other unsecured debts obligations such as credit cards, medical bills, personal loans, etc. These debts are frozen at 0% interest and deferred until the mortgage is brought current.
- All mortgage arrearages (missed payments) are paid back at 0% interest with no continued late penalties or interest charges.
- If you have a rental property, you can reduce the principal mortgage balance to current market value and own the property free and clear within 3 -5 years.
- Disadvantage: If you are planning to incur future debt over $1,000, you would need to obtain court authorization while you are in the repayment program.
- Negotiated Forbearance Agreement
- Benefits: Mortgage Company electively agrees to set up repayment terms.
- Disadvantages: The agreement is typically very rigid and requires large payments over a short period of time. If a payment is missed, your home will usually be put back into foreclosure immediately. The mortgage company typically requires an accelerated timeframe to make up missed payments – usually over a six to12 month time period. This short timeline can really create a steep monthly increase that usually creates other budgeting problems. The mortgage company typically still continues to apply late penalties and interest charges during the forbearance.
- Loan Modification
- Benefits: Missed payments are often added to the end of the mortgage contract.
- Disadvantages: Extends the terms of the mortgage and increases the amount of interest you will be paying over the life of the loan. The lender may require other fees or unfavorable terms to accommodate this modification. If your mortgage company commences foreclosure proceedings, it likely signals their strong intent to continue and conclude the foreclosure sale versus granting the homeowner a modification.
NOTE: You are still able to pursue a loan modification through the Chapter 13 program while benefiting from the security of court protection from foreclosure.
- Cash for Keys and Deed in Lieu of Foreclosure
- Benefits: Bank voluntarily takes home back without following through on foreclosure proceeding and/or provides you with a payment for vacating the home quickly and peacefully.
- Disadvantages: You may have a tax liability for the dollar amount or value that the mortgage company “forgave” as a part of this program via a 1099 income form. Check with a tax professional to understand the implications for your situation. You may forego all or part of your redemption period. Cutting this short will accelerate your timeline to find other living arrangements.
- Short Sale
- Benefits: Bank voluntarily agrees to sell the home to a third-party for less than what you owe on it.
- Disadvantages: You may have to bring money to the close and/or sign a new note for the forgiveness amount to complete the sale. If the bank waives the deficiency amount, you may incur a tax liability for the dollar amount or value that the mortgage company “forgave” as a part of this program via a 1099 income form. Check with a tax professional to understand the implications for your situation.
Stop Foreclosure in Michigan, Call the Foreclosure Resolution Specialists
Don’t lose another night sleep over your finances. Call our office today at 866-261-8282 to speak to a compassionate and licensed foreclosure defense attorney. We will discuss all of your available options and recommend the best course of action to find lasting debt relief and improved finances and credit.
A foreclosure does not have to take over your life – there are ways to regain control and get legal protection. Take the first step by calling our experienced foreclosure prevention law firm today.