Explaining the Stages of the Michigan Foreclosure Process

Stages of MI foreclosureKalamazoo MI – When you ask the Veenstra Team to help you stop foreclosure in the Greater Kalamazoo area,  you actually get TWO complete teams working for you AT NO CHARGE!  WHAT?  HOW?  Well, if after our free consultation we find that the best option to stop your Michigan foreslocusre is to sell the home by short sale, then you will get the professional expertise of your top Kalamazoo real estate agents, the Veenstra Team AND you will get the expert help of professional negotiators that the Veenstra Team partners with to negotiate with the bank and manage the short sale transaction.

We have found the greatest success for our home sellers when we stick to what we do best and when we partner with others who do the parts that they do best.

The Veenstra Team will start by communicating with our network of investors to see if we have an immediate buyer for the home.  In many cases we will bring in an investor to buy to your home within days after listing it.   We will then manage the details of the transaction and get your sale closed.

We have worked with distressed homeowners that have been in various stages of the foreclosure process and one of the first questions that we are asked is “What are the steps in a foreclosure in Michigan?”  Below is a summary of the steps in the foreclosure process.   Please note that we are NOT attorneys and though we believe this information to be accurate, it is not guaranteed.    It is essential that distressed homeowners contact us as soon as possible in the foreclosure process so that we have the most time to get the sale completed before the bank takes irreversible actions.

STAGE ONE OF THE MI FORECLOSURE PROCESS – COLLECTIONS

1) Collections (1 to 90 Days): This usually goes about 90 days before the lender will take the next step. In this stage, the distressed homeowner will typically be harassed a great deal by the collections department. After a certain amount of time, the harassment may taper off and the lender my attempt a “workout” to get the borrower back on track, if it’s financially feasible and if the distressed homeowner wants to keep the house. Contrary to popular belief, the lender has no obligation whatsoever to offer solutions to the borrower.

STAGE TWO OF THE MI FORECLOSURE PROCESS – PRE-FORECLOSURE

2) Pre-foreclosure (14 to 180 Days): This stage starts the moment the lender refers the case to their attorney. Usually 2-4 weeks after the referral, the attorney publishes a notice of the foreclosure sale.  This notice is published in a newspaper  published in the county that the house is  in.  Ninety nine percent of the foreclosures proceed in this manner (Publication by advertisement.)

STAGE THREE OF THE MI FORECLOSURE PROCESS – LOAN MODIFICATION OPTION

3) Prior to the sheriff sale date being set, the lender must give the distressed homeowner an opportunity (14 days) to request a loan modification. If the distressed seller does not  request the loan modification (and most do not)  the sheriff sale can be set 5 weeks out. If a distressed seller does request a loan modification and the lender does not attempt to get them qualified for a loan modification, then the distressed seller can force the lender to foreclose judicially (in court, in front of a judge).

STEP FOUR IN THE MI FORECLOSURE PROCESS – FORECLOSURE or SHERIFF SALE

4) Foreclosure Sale or “Sheriff Sale”. At the sale, the lender sets an opening bid which is supposed to be the true value of the house. Most of the time, the opening bid is simply the total debt up to that date. Ninety-nine percent of the time, there is no one that outbids the bank at the sale so the bank “takes the house back”.

STEP FIVE IN THE MI FORECLOSURE PROCESS – REDEMPTION PROCESS

5) Redemption Period (30 Days to 12 Months): During this stage, the distresses homeowner still has the right to occupy the house and the right to sell the house (with or without a short sale).    The length of this period can be as short as 30 days if the property is claimed by the lender as abandoned.  It is VERY VERY important that a distressed homeowner does not allow the house to be claimed as “abandoned”.    Our team has specific techniques to help ensure this does not happen. Living in the house is NOT ENOUGH to stop that abandonment process (which shortens the process to 30 days).  The lenders try to declare the house as abandoned OFTEN so it is IMPERATIVE that you allow us to stop this from happening.  As a general rule (if the house is not declared as  abandoned) this will be a 6 month period. Michigan’s Governor signed a new law in January, 2007, virtually eliminating the 12 month redemption period. See an attorney or your title company  to learn more about this.

THE LAST STEP IN THE  MI FORECLOSURE PROCESS – REO

6) REO (Bank Owned). Once this stage is reached then the borrower no longer has any rights to the property. A distressed homeowner does not have the right to sell it any more at this point. If the distressed homeowners are still living there, they will be taken to court and evicted.

The Veenstra Team is able to help any homeowners in the Greater Kalamazoo area….AND we also have a network of agents throughout the US and Canada that we cooperate with.  Contact us to get the help you need to avoid foreclosure.