Homes in foreclosure in Wastenaw County Michigan are unfortunately seeing an increase in recent years as the Michigan economy wallows in a multi-year doldrum.
Homes sold in Washtenaw County now include these foreclosures on the steps of the County Courthouse via the Sheriff's auction.
This article will benefit you whether you are facing foreclosure or a real estate investor trying to understand foreclosures.
First, let's understand the foreclosure process in Michigan.
After you've missed 3 consecutive mortgage payments you will be in preforeclosure. At this point, your mortgage lender (usually a bank) will submit your info to an attorney who is required to file your pending foreclosure as public record for 4 weeks. 28 days later your home will be auctioned off to the highest bidder at the sheriff's auction.
The information that attorneys will file for homes in foreclosure in Washtenaw County Michigan will appear in a paper called "The Washtenaw County Legal News." Anyone in the public can access this information for a few dollars.
Although you may outraged your information is made public record, that's simply how this stuff works.
Because homes sold in Washtenaw County via foreclosure are available in the public record for 28 days before the auction, there is a good chance you will be contacted by various businesses and investors who will try to work something out with you.
Some of these businesses will be legitimate and some will be scams. So be careful who you work with. Many so called foreclosure counseling companies are being cracked down nowadays.
However, before you write them all off, you should know that legitimate real estate investors can help you with your situation.
The rest of this article will explain how homes in foreclosure in Washtenaw county Michigan can benefit by working with real estate investors.
If you work with your lender in the early stages of the foreclosure process and you have the money to bring yourself current on your payments, then you may be able to work out a forbearance with the bank.
Here's how this generally works. Let's say your mortgage is $2,000 a month and you missed 3 payments due to some financial difficulty such as a job loss. So you are now in arrears $6,000 dollars. Let's say you have now found a new job and can make the payments again.
You would contact your bank and ask to work out a forbearance. If accepted, the bank may work out something like this: you will pay $2,500 a month, of which $2,000 will go toward your mortgage and $500 of it will go toward paying the $6,000 you are in arrears until you are current. So, in this case, it would take you 12 months to catch up.
This is a simplified version of a forbearance, but it should give you an idea of how one might work.
If homes in foreclosure in Washtenaw county Michigan move too far along the foreclosure process a forbearance may not be possible. In addition, may people are facing foreclosure because they do not have the money to get current and therefore, a forbearance isn't usually an option.
Another option is to work with an attorney and file a bankruptcy. We are not lawyers so this is not legal advice, but in our opinion, a bankruptcy should be a last resort option because it will wreak havoc on your credit for years. Also, many people don't know this, but a bankruptcy will not allow you to keep your home in the long run anyway.
Also, bankruptcies can be costly: ranging from $1,500 to $5,000. Again, talk to an attorney.
Working with real estate investors can be done as well, and two of the best options are short sales and lease options.
Homes in Foreclosure in Washtenaw county Michigan
Short sales cannot be performed by you working with the bank like a forbearance. The reason will be explained here.
A real estate investor, after receiving your signed approval, will try to work with your mortgage lender and discount your mortgage debt and buy it at this discount.
There is no guarantee the bank will accept the investor's attempt to buy the defaulted mortgage note at a discount, but if the investor makes a compelling case for your hardship, and highlights what flaws your property may have, the bank may accept.
Why would the bank accept? For a few reasons:
First, the bank loses many thousands of dollars to put a home through the foreclosure process. If they can settle quickly with an investor, they get to avoid the foreclosure. Incidentally, this is also the benefit for you: you get to avoid the foreclosure as well in a successful short sale and the consequent damage to your credit.
So, the bank will weigh the evidence if it will be cheaper to let the investor have your home at a discount rather than take it thru the lengthy and expensive foreclosure process. Keep in mind, no investor can short sale your home without your approval. It's up to you whether you want to proceed with this method.
You will have to move on with your life....but if the choice came down to moving on with your life with damaged credit and a foreclosure on your record, as opposed to an investor taking it off your hand's and you avoiding the foreclosure, you may prefer to work with the investor.
Homes in Foreclosure in Washtenaw county Michigan may also be lease optioned as another strategy.
Here's how this works: before the foreclosure auction via sheriff's sale, you may work with a real estate investor to find a tenant-buyer for your home on a rent to own basis. The tenant-buyer will move into your home, take over your monthly mortgage payments and have a contract with you that will give him or her the option to purchase your home during the term of the option.
This will allow you to avoid the foreclosure and the damage to your credit of the event. The downside for the lease option strategy is that the tenant-buyer may, at the end of the option term, (usually 12 to 24 months) may choose not to exercise the option and buy your home.
In addition, the closer you are to the foreclosure, the harder it is to use the lease option strategy because it usually takes some time to find a tenant-buyer for your property.
This is why working with connected real estate investors can help because they usually have marketing campaigns up and running looking for tenant-buyers, or through their networking, may be able to find you a tenant-buyer quickly so you can avoid the foreclosure.
In the end, facing a foreclosure is not an easy life event for anything to face....so it's important to weigh your choices carefully.
