Ann Arbor Michigan Real Estate: Post Foreclosure – What are redemption rights?

This is a question which is sometimes raised by many homeowners who have just lost their property due to foreclosure. How does this work?

Well, according to Washtenaw County the redemption period is as follows: “after a property is sold at a sheriff’s sale (foreclosure sale), there is a redemption period. For many properties it is a six month period, for some properties, usually those properties with three or more acres or if more than two thirds of the loan has been paid, it is a year. If the property has been declared abandoned, the redemption period can be substantially shortened to one month.” Importantly, homeowners have rights during the redemption period, you can continue to live in the property and are not required to make any mortgage payments, can sell the property to another person or more interestingly BUY IT BACK!

Buying back a property that you are living in is an interesting concept that could save you month, however if you want to buy back the property many people want to know the answer to the big question: ‘what is the price?’ – Well, according to the county, this works as follows “at the sheriff’s sale, the purchaser paid a certain amount of money to purchase the property. Often the purchaser will be your mortgage company although it could also be another investor. The amount necessary for you to buy back, or redeem, your property is the amount the purchaser paid, plus some allowable costs and a daily interest rate based upon your mortgage loan interest rate.”

You can find out the sale price for your property at the Registrar of Deeds in the county where your property is located. If you want to buy back the home and it was sold for less than the amount owed to a mortgage company you only have to pay the purchase price from the sheriff’s sale even if it is substantially less than your loan amount. But that said, regardless, if the purchase price is less than the amount owing on the loan then you may be responsible for the difference. This difference is called the “deficiency” and the mortgage company can try and collect on this deficiency. Be careful and if you get collection calls, always seek legal advice if you are unsure whether they are warranted or not.  When you short sale your home, the approval letter often waives the deficiency.  Read Should I Short Sale My Home?

All said and done, what if you don’t buy back your home? Well, at the end of the redemption period you can be evicted if you are still in the property. However the purchaser of the property should not simply change the locks or evict you without a court order. If this happens you should contact an attorney immediately for assistance as there is a correct procedure that must be followed to evict the person still in the property.

This is all interesting stuff that is relevant to the market that we are living in across the country today. All of these things mean that while it can be tough on sellers, if you are a buyer then now is a great time to pick up a bargain home here in Ann Arbor!  If you are looking at a Short Sale, click here.

We welcome your comments, if you live in the community, we want to hear what you think of your neighborhood and welcome your input to improve this Ann Arbor Area information.

If you are looking to move to Ann Arbor instead then give the team a call! Ann Arbor offers great access to the expressway to get to Detroit or beyond quickly. A hop skip and a jump away is Zingerman’s Deli, Kerrytown, Kerrytown Farmers Market, Briarwood Mall, U of M campus, Medical Centerand University of Michigan football games. Drive to Veteran’s Park for figure or hockey skating, baseball, sledding, swimming, or enjoy fresh produce at Plum Market. For some specialty items be sure to visit nearby Morgan and York with video. Ann Arbor is a great place to live – convenient for all, including the Detroit metro airport, which is around 30 minutes away! Remember to be sure to visit world famous Ann Arbor Arts Fairs held every July. Click here to search Dexter Real Estate using our complimentary Ann Arbor Real Estate MLS Search service. Alternatively please contact Kathy Toth and the team if you need more specific assistance in your Ann Arbor Real Estate needs.

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