2nd Mortgages In Michigan
Michigan is a non judicial state with a 6 month redemption period after Sheriff Sale.
Assuming the 1st forecloses and buys the note at Sheriff Sale, when does the 2nd become extinguished?
I assume that if the 1st is redeemed, then the 2nd must still be in place so it is not extinguished until after the redemption period??
So in order to do a short sale after Sherrif Sale, you have to also deal with the 2nd?
Thanks
Eric
Yes you still need to deal with the junior liens during the redemption period.
Thomas
I have wondered about this, and although I have never seen it in actuality, here is what I understand will happen:
--The tax office notifies the owner on the tax records of the tax deliquency. The tax office does not check to see whether a mortgage is on the property.
--The property goes thru the foreclosure process and the mortgage co. would be unaware of it if the mortgage payments were current.
--After foreclosure, the 1st mortgage is wiped out. If the owner redeems, his property is now free and clear, and he stops making payments.
The only problem is that at the securing of the loan, the owner signed documents agreeing to keep the taxes current. The mortgage company sues and is awarded the full damages and/or the property returned to the lender by court order.
This is what I understand happens. Would like to hear from someone who has actually seen it.
Also, your 25% redemption fee is safe. Good deal on your part.
if anyone else has any remarks feel free.
I am not from Tx, but in Ga I never so a property go to foreclosure if it had a mortgage on it . The mtg co. makes usre the taxes get paid before foreclosure happens. The mtg co is not about to lose their place in line over a few thousand dollars. If it should get to foreclosure the 1st is wiped, but I have never seen this happen. Good luck. Your position is quite safe, and good deal on your part.