When Is It Too Late to Stop a Foreclosure?

Foreclosures in the past years have been increasing in the United States. They are a common occurrence and it is observed that about 1 in every 200 homes are foreclosed.

What is a foreclosure? A foreclosure is a legal procedure of selling the property of the borrower when the borrower has defaulted on payments to the lender. 

With the help of a great foreclosure attorney, there are options that stop a foreclosure immediately, but when it is too late? 

Mortgage Foreclosure vs. Property Tax Foreclosure

Mortgage foreclosures are those foreclosures when a party is unable to complete the payment and the lender forecloses the property to recover the money that has not yet been paid. For example, a person bought a home by borrowing money from a bank or a mortgage company. They paid the mortgage for some time, however at some point before the payments would end, they no longer have the money to pay on the note. This is when the lender will have to foreclose their property to recover the money that has not been paid to them. 

Meanwhile, property tax foreclosure, also known as Tax Lien Foreclosure, is the government foreclosing a person’s property when they are unable to pay their property taxes. If the person does not pay their property taxes for a certain period (the minimum period of missed property taxes is 3 years in Michigan), the government seizes their property and then sells it to recover the amount of tax that has not been paid (regardless of other liens or mortgages against the property). 

When is it too late to stop a mortgage foreclosure?

People who are unable to pay the mortgage on their property often file for bankruptcy because it stops the foreclosure process. The foreclosure can be stopped even on the day the property is intended to be sold. Until the property has been sold at auction, a homeowner can stop a foreclosure. 

The lender will typically take action against the homeowner after it has been 90 days since the last payment was made. Once 90 days have passed, the lender issues a delinquency notice to the homeowner. The homeowner can do one of two things. They can either pay the mortgage amount and avoid the foreclosure situation altogether or they can continue not making any payments which will lead to the lender to foreclose on the property. 

After 120 days have passed and there has been no payment made by the borrower, the lender is required to issue a notice that shows their intention to foreclose on the property.  After this, the foreclosure attorney will post a notice in a legal newspaper of the intended sale.  The notice period will run for 5 weeks and the property sold at a public auction.  During the 5 week notice period, the homeowner can stop the foreclosure by making-up all missed payments (including late fees and attorney costs) or working with an attorney to stop the foreclosure process.

The only time it is too late to stop a foreclosure is when the property is sold at auction to a new party.

When is it too late to stop a property tax foreclosure?

If you are someone who has received a notice of foreclosure because you are behind on paying your property taxes, you might be wondering when is it too late to stop a property tax foreclosure? You can redeem your property by paying the remaining taxes. You have about three in years in Michigan to pay the remaining amount which will stop the foreclosure.If you have gotten behind on your property taxes and/or are facing a forfeiture sale, you can immediately and legally stop the sale by filing a Chapter 13 reorganization plan.  This is a legal means of creating structured repayment terms with your city treasurer and other creditors.

Another thing you can do is prove that there is a defect in the tax sale procedure. This will set aside the sale for a while, buying you time to figure out a permanent solution. Another way you can set aside the sale is by proving that you had a valid reason for not paying your taxes. If you can prove a valid reason for non-payment (i.e being out of the Country in active duty with the military), you can set aside the foreclosure of your home. 

Like a mortgage foreclosure, the only time it is too late to stop a foreclosure is when the property is sold to a new party.

The Right Attorney Can Help Save Your Home

If a foreclosure situation is handled by the right attorney, one could come out of the situation without losing their home. Don’t wait until it is too late. Call us today to get a free consultation on how you can get caught up on your unpaid property taxes and avoid a tax foreclosure sale.  Our highly qualified attorneys specialize in debt resolution and have vast experience working with the county taxing authorities on tax debt resolution.

We are a Michigan-based law firm and have five convenient locations in: Ann Arbor, Dearborn, Southfield, Warren and Flint.  We are proud of our A+ rating with the Better Business Bureau, as it is a good reflection of our commitment to excellent customer service.  Call us today at 866-261-8282 for a free consultation with one of our licensed attorneys.