How to Prevent a Foreclosure in Michigan
Foreclosure is a legal term given to describe the process by which a bank or mortgage company can take back your home as the collateral for a defaulted loan (mortgage). Failing to make mortgage payments for three months on your mortgage or failure to pay real estate property taxes can result in foreclosure. Michigan homeowners can take steps to prevent this.
- Difficulty:
- Moderate
Instructions
Things You'll Need
- Account number from mortgage statement
- Copy of paycheck
- List of regular household expenses
- Repayment plan
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1
Contact the lender to request a meeting to take action on your house before it forecloses. Document each time you contact your lender, if only to receive information provided by a recording. Strive to reach the "workout" room or loan modifications.
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2
Put a repayment plan in place. You will be asked this question if your request is approved. Tell them your workout plan. Ask them for a forbearance to reduce payments or eliminate them for one year.
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3
Engage in a short sale. This is one of several options available to homeowners who no longer have enough income in the household to support the mortgage. Note, there is a difference between preventing foreclosure and saving the home. For instance, in a short sale the homeowner agrees to sell the home for less than owed. All lenders must agree on this arrangement.
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4
Engage in Deed-in-Lieu. This is when the lender allows you to hand over the deed in exchange for forgiving debt (avoiding foreclosure).
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5
Contact MSHDA's (Michigan State Housing Development Authority's) Save the Dream Campaign. The website is a resource for homeowners in Michigan experiencing financial difficulties and facing foreclosure. The program has a network of statewide homeownership counselors to assist Michigan residents with refinancing programs. You can also call the Save the Dream number at (866) 946-7432.
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