MORTGAGE ISSUES & FORECLOSURES

For over 3o years we have prevented and resolved problems related to Michigan and Ohio mortgage issues.  

COMMON MORTGAGE ISSUES

A mortgage is a legal agreement by which a bank or other creditor lends money at interest in exchange for taking a lien on the debtor’s property, with the condition that the mortgage is cancelled upon the loan being paid off by the debtor.

Mortgages are taken by banks, lenders or creditors,  on all types of Michigan properties: rural, residential, commercial, and industrial.

Mortgages are secured by a promissory note requiring the debtor to make timely payments to the lender. Failing to pay timely or to comply with other mortgage provisions such as maintaining insurance or paying property taxes will allow a lender to place a mortgage in default.  The most powerful remedey that a lender has as a remedy to obtain it’s monies back from the debtor is to declare a default and foreclosure on the mortgage.

Michigan foreclosures are either done judicially or by advertisement.

Common problems that create mortgages disputes are:

1. The mortgage loan is sold and the new lender may not properly abide by the terms of the original mortgage;
2. Tax or insurance escrows are miscalculated by the lender, increasing the debtor’s payment unexpectedly, thereby creating a debtor’s financial distress;
3. A change in the debtor’s financial circumstances occurs and the lender refuses to work with the debtor to modify or temporarily adjust payments;
4. A property owner experiences a “hiccup” in their finances because of a job issue of financial emergency.  They get behind on their mortgage briefly, but then they are surprised to learn that they in default in their mortgage.

FORECLOSURE ALTERNATIVES:

Short Sales

A Short Sale occurs when your mortgage servicer agrees to accept less from the sale of your home than what you actually owe on your mortgage loan. In order for your mortgage servicer to agree to this type of sale, you must be delinquent on your mortgage payments and be willing to move to a more affordable home. When you have a Short Sale offer from a potential buyer, you will need approval from your servicer to proceed with the sale. Once you receive that approval and the sale closes, you will not be required to pay any remaining balance on your mortgage loan, and you may even receive cash to help with moving expenses.

Deed in Lieu

With a deed in lieu of foreclosure, you voluntarily transfer title to the property to the lender in exchange for forgiveness of your mortgage debt and all associated costs, such as late fees, legal charges, and past-due interest payments.

Partial Claim

A partial claim is when the mortgage insurance company on your loan lends you the money to bring your loan current. If your loan has mortgage insurance, the insurance company stands to lose if you default. To help keep you in the house, the mortgage insurance company may help you get current on the loan. Many mortgage insurance companies have trained personnel available to help people who are having trouble with their mortgage payments.

Straight Modification

Straight modification is an agreement that actually changes the term of your loan. The modification could lower the interest rate and payments to an amount you can afford. The lender could also use the modification by adding the missed payments to your current balance. This could increase your monthly loan payments so you would need to prove you can afford to pay the higher payment without defaulting again.

Forbearance

Forbearance is a written agreement where you send a lump-sum amount to the lender. Each month thereafter you pay your regular payment plus half of your mortgage payment. For example, if your regular mortgage payment is $600 per month, your initial lump-sum payment might be $500 to $800. Then each month thereafter until you are current, your payment would be $900 ($600 plus $300). Most forbearance plans are for three to six months.

Permanent Hardship

A permanent hardship occurs when you can no longer afford to make the mortgage payments. Your mortgage company may agree to delay the foreclosure on your house for up to 120 days and give you time to sell the house. If, when you sell the house, you get less than what you owe on the house, the lender may forgive (not make you pay) the difference.

Quitclaim Deed 

A quitclaim deed transfers whatever interest you have in a particular piece of property. By accepting such a deed, the buyer assumes all the risks. Such a deed makes no warranties as to the title, but simply transfers to the buyer whatever interest the grantor has.

Legal provisions found in mortgages, lending agreements, and promissory notes are usually very complicated and are not to be taken lightly. Consider contacting seasoned legal professionals with years of mortgage and lending compliance experience just like David Soble and his legal team before you “go it alone.”

Call us today at 888.789.1715 to learn your rights and your legal options.