When a property is sold for an amount that is less than it is worth or less than the balance owed to the bank (with the approval of the lender), it is referred to as a short sale. The funds acquired during this sale are given to the mortgage holder and applied to the balance you owe. Though short sales are often associated with foreclosure, it is possible to sell your home in this manner without a foreclosure being initiated. Learning more about this type of transaction along with reasons to consider a

Divorce

A divorce is one of the most expensive financial transactions a person can expect to go through in his or her lifetime. Not only do you have to navigate the emotions associated with ending a marriage or establishing custody of children, you must also figure out a way to divide marital property. When a couple jointly owns a home and neither wants to surrender their interest to the other party, selling may become the only reasonable option. A short sale is a way to sell your property, quickly satisfying both parties and resolving one of the most complicated aspects of marital asset division.

Emergency Move

The average person in the United States can expect to move approximately 11 times throughout his or her lifetime. It is not unusual for a person of any age to need to move for an emergency reason that is not necessarily tied to finances. As the number of senior citizens throughout the country increases, many people find themselves needing to provide sudden care for aging loved ones. A prolonged visit could quickly turn into a permanent arrangement, and a short sale can benefit a person who needs to sell a home quickly so that he or she can make a relocation official.

Financial Trouble

Even though you might not be facing foreclosure, it is possible to find yourself in a difficult financial situation that your existing mortgage makes worse. Losing a job, being transferred to a less lucrative position, or another financial hardship could all make a short sale a better option for you than a traditional property sale. This is especially true if you are having problems keeping up with homeowners association fees, the property value in your area is stagnant or dropping, and you do not believe you will be able to stay current on your mortgage payments for much longer.

Talk to an Attorney

Deciding whether or not a short sale is the best option for you is something that you should do with the assistance of an experienced short sale attorney. An attorney can review all of your available options and give you realistic advice regarding whether negotiating with your bank or selling your home will provide the long-term relief you need. The attorneys at Resnick Law P.C. understand how stressful this process is and we work on your behalf to help alleviate your burden. Contact us today at (248) 642-5400 to schedule an initial consultation so that we can begin providing you with the help that you deserve.

(image courtesy of Max Sandelin)

Although it is sometimes difficult to do so, it is possible for a person who has been through foreclosure to buy a house after the foreclosure is behind him or her. A person who wants to buy a home after foreclosure should consider the reasons that led to the foreclosure before, whether it was from misconduct by the mortgage lender or a financial problem. Reviewing these reasons may help avoid foreclosure in the future.

Once a person goes through foreclosure, it is noted on his or her credit report. If there were missed payments before foreclosure, these will be noted on the credit report, as well. These notations may affect a person’s credit score and ability to get approved for another mortgage loan. A person buying a home after foreclosure is likely to be offered higher interest rates for loans than a person who has not, but this also depends on a person’s credit score.

Typically, homeowners also have to wait a certain number of years before applying for a loan to buy a home. If applying for a federal housing administration (FHA) loan, a three-year wait from the time the foreclosure is completed is required. Some lenders can overlook this waiting period, but this is likely to come with steep interest rates on the loan and other unfavorable terms. Military servicemen and others whose foreclosed loans were government-backed loans may have to satisfy other requirements before they are approved for other government-backed loans.

It is critical for a person seeking a mortgage loan to look into various lenders and research the terms they offer, especially to former homeowners who lost their homes to foreclosure. Shopping around for the best terms can help save money in the long run. In addition to considering the financial terms offered by a prospective lender, the person seeking the loan should investigate the loan modification options available to borrowers.

The lender may need to be convinced that a person who has previously gone through foreclosure will not default on payments as before. This can be done in various ways, including remaining current on all other bills. Saving a down payment to purchase the home will also help convince the lender that you are likely to keep up with the payments.

A person who lost a home through foreclosure should ensure that he or she does not lie about the foreclosure or try to hide it on loan application documents. A lender who does its due diligence in checking the financial status of the prospective borrower will almost always catch misrepresentation by a borrower, and it will mean that the lender does not approve the loan.

Contact an Experienced Attorney

If you are going through a financial hardship and are facing foreclosure, you need to contact an experienced attorney as soon as possible. For more information and to find out if you have a valid defense to foreclosure on your home, call us at Resnick Law, P.C., in Bloomfield Hills and Detroit, Michigan. Our experienced attorneys can guide you through possible defenses and different alternatives to avoid foreclosure. Additionally, we can advise you if filing for and bankruptcy is in your best interest.

(image courtesy of Valentine Locatelli)

A foreclosure may not be the end of a homeowner’s financial problems if the homeowner has multiple loans secured by the home. These additional loans are generally known as junior liens, and they can take the form of second mortgages or home improvement loans. The lenders of these loans are usually behind the original mortgage lender in terms of getting paid when the house sells. This could leave the homeowner personally liable for the junior loans.

If the original lender, the senior lien holder, sells the home in foreclosure, the income from the sale is used to first settle the senior lien holder’s loan. If there are any additional funds left over, they can be applied to any junior loans. The junior lien holders can make a claim on the surplus from the sale of the home, but have to prove the validity of their claims. If the money only partially covers the balance of the loan, the junior lien holder can sue the homeowner for the balance.

This can also be the same outcome in a short sale or deed in lieu of foreclosure. However, in these situations, there is an opportunity for the homeowner to negotiate with all the lien holders in order avoid personal responsibility for a deficiency on all loans. These negotiations should take place before the sale takes place, and all lenders should agree not to seek deficiencies from the homeowner. This may work better if all the loans were provided by the same lender.

Homeowners should note that the junior lienholder who has an interest in the property can also foreclose on the home. If a junior lien holder sells the property, the senior lien holder still has an interest in the property, even if it is transferred to a new owner. Additionally, any surplus from a foreclosure by a junior lien holder does not necessarily go to the senior lien holder, and instead goes to other junior creditors or to the homeowner.

Following foreclosure by a junior lien holder, the original lender can still pursue the balance of the mortgage from the homeowner who took out the loan. The obligation to pay on the loan is not transferred to the new homeowner. However, the new homeowner does not own the property free and clear, and the senior lien holder’s lien remains with the property until the debt is discharged by payment or through bankruptcy.

If there are other creditors seeking to get paid, the homeowner who loses a home to foreclosure and faces the prospect of a deficiency judgement should consider filing for bankruptcy. Bankruptcy would allow the homeowner to erase all the debt, including junior liens, and start fresh even though it may negatively affect the homeowner’s credit.

Contact an Experience Attorney

If you are going through foreclosure and have multiple loans against the property being foreclosed, call us at Resnick Law, P.C., in Bloomfield Hills and Detroit, Michigan. Our experienced foreclosure attorneys can help you navigate the process and negotiate where possible to try and help you avoid deficiency judgments.

(image courtesy of Nathan Fertig)

When a person acquires real estate under certain conditions, and there may be other people who can possibly lay claim to that property,

The issue of filing a quiet title action can arise when the property at issue is purchased at a tax sale. The title deed issued as part of a tax sale may be a quit claim deed, where the purchaser essentially takes the risk that the title can be challenged by others with a claim to the property. When a seller sells land with a quit claim deed, the seller transfers whatever ownership the seller has to the purchaser, which may be a bad title.

Another reason to file for quiet title is to clear title to property that has been acquired through adverse possession. Adverse possession refers to the process by which a person gets ownership over land by exercising actual, non-permissive, exclusive, adverse, continuous, open, and notorious use of the land for a long period of time. A person who obtains ownership in this way may file quiet title to solidify his or her claim of ownership over the land after the required number of years to establish adverse possession.

Filing the quiet title action may be the only way to get clear title and be able to sell the property later on without any problems. Diligent buyers will always do a title search before purchasing a property. If the title is clouded or uncertain, then the buyer is not likely to spend money to inherit a problem. If the buyer is purchasing the property using a mortgage loan, the lender is not likely to approve the sale with less than clear title.

A quiet title action is filed against all people with a claim to the title over the real estate at the same time. Once an action for quiet title is filed, notice has to be given to all other people who may have a claim to the property to give them the opportunity to challenge the plaintiff’s claim. The person filing the quiet title action must be able to show that he or she has a superior claim to the property in order to prevail and get clear title.

Once a court grants the plaintiff clear title to the property, it should be legally sufficient to transfer the title, but it may still raise some questions with future buyers.

Contact Us for Legal Assistance

It can be quite difficult to sell real estate when you do not have clear title to the property. You may be able to get clear title by filing a quiet title action. For a consultation, contact Resnick Law, P.C., to speak to an experienced real estate and zoning attorney in Bloomfield Hills and Detroit, Michigan.

(image courtesy of Christopher Harris)

There are several steps that homeowners can take in an attempt to avoid foreclosure and keep their homes. Some of these steps or programs can be temporary fixes, while others are more permanent and can work to restructure the terms of the mortgage loan in order to make the payments more affordable for the homeowner. Temporary approaches focus on helping a homeowner who is experiencing temporary hardship avoid foreclosure. One temporary approach for a homeowner to avoid foreclosure is to apply for forbearance.

Usually, when a homeowner misses several months of mortgage payments without a prior agreement with the mortgage lender, the lender may be able to start foreclosure proceedings. Forbearance is a process through which a homeowner and the mortgage lender enter into an agreement that the homeowner will be allowed to miss monthly mortgage payments or to make lower payments for a period of time. A forbearance agreement assists the homeowner during a short period of time, usually up to six months, during which the homeowner is experiencing an unexpected financial problem.

Forbearance does not mean the missed or lowered payments are forgiven at the end of the forbearance period. Under a typical forbearance agreement, the homeowner agrees to make up the difference between the regular and lowered payments and any missed payments at the end of the forbearance period. These missed payments can also sometimes be absorbed into the overall loan owed, which can increase the monthly payments the homeowner owes after the forbearance period ends.

While forbearance seems like a good way to relieve the financial pressure of making on time mortgage payments while going through some tough times, it is not a good solution if the tough times are more long term. If the homeowner suffers a catastrophic injury and can no longer work to earn the amount of monthly income it would take to keep the home, the homeowner should pursue a different solution other than forbearance. However, if the homeowner is fired, and is in a field of work in which he or she can find another job in a few months, then applying for forbearance may be a good solution.

Mortgage lenders do not have to agree to forbearance for a homeowner, even one with a proven financial need. In some cases, whether or not forbearance is granted depends on the homeowner’s past payment history. The lender may offer a range of other loss mitigation options for a homeowner to choose from if forbearance is off the table. Before accepting any offers, the homeowner should always seek independent advice on the benefits of applying for a particular loss mitigation program in order to avoid getting into further trouble and then losing his or her home.

Contact Us for Legal Assistance

If you are experiencing financial hardship and would like to figure out the best way to handle your finances, call us at Resnick Law, P.C., in Bloomfield Hills and Detroit, Michigan. Our experienced attorneys can help you identify the options you have in terms of handling your debt and hopefully avoid foreclosure.

(image courtesy of Jesse Roberts)