Michigan Economy Burned Us BAD

[MI Meltdown]

I've moved to Atlanta to start a new job and new life. My Michigan home, which we thought would be our family home for a number of years, is still on the market at 15% less than what we bought it for. We had it for over two years and saw no appreciation, only depreciation. We have no credit card debt, no other problems with credit. Even a conservative 30 year mortgage with 10% down wasn't enough to stop us from entering negative territory. The depreciation is happening at such a violent rate that I had to get out before my house went down by another 10% next year.

We have stopped payment now and are in arrears by two months. Got my first call from the bank; we've sent them our proof of employment with salary details and really, my wife and I don't make all that much, she being part-time, definitely not enough to sustain an apartment, car loan and all other expenses in Atlanta. I doubt anyone will purchase my house; there are over 110,000 foreclosure in Michigan and we just haven't got a chance with that sort of competitition.

Should I file bankruptcy now? Wait for a foreclosure notice? The bank rep told me that my PMI wouldn't allow for a deed in lieu since the home is vacant. Is this baloney? Thanks everyone for your help . . .

[BKOnce]

We feel ya. First, there was Silicon Valley (San Jose, CA) melt down, now the whole Auto industry (Michican) follows same path...

[demismom]

I'm in Michigan too and it sucks here big time!

As for what to do, I have no advice. We surendured our home and were going to do a deed in lieu, but were told that we would then be liable for the difference, so we didn't.

[SinkingFast]

Michigan allows for Non-Judicial Foreclosure.

You'll need to check your mortgage document to see if you have a "Right to Sale" clause in your contract. If you do, Foreclosure can proceed very quickly.

A lot of when the Lender will proceed depends on how many Real Estate Owned (Foreclosed) properties the Lender already has on the books. REO properties negatively impact the bottom line, so sometimes Lenders will intentionally drag their feet on a Foreclosure.

Generally speaking, until the Deed/Title changes hands, you are still responsible for the property. Insurance, taxes, HOA dues, liability, etc. You'd best Consult an attny to know for sure what you need to do to protect yourself.

Lenders can seek Judgements for deficiency balances on Foreclosures in MI. So if your house sells, at auction, for less than you owe, the Lender can sue you for the difference.

http://www.foreclosure.com/statelaw_MI.html

Hope this information helps in your decision making process.

[MI Meltdown]

Thanks all, keep em coming, I'm at my wits end. I've been very financially responsible up to this point and I can't believe this is happening to us.

[dovette7]

Hi MI,
Welcome to Atlanta. I live in Atlanta also. The economy here isn't all that grand either. Atlanta is leading the nation in foreclosures....my home being one. We never thought we'd be in that position either, but the real estate market in this area has hit bottom and that was my business, real estate sales. I couldn't even sell my own house!

I'm sorry to hear your going through this rough time but stay strong. You've changed locations and that can be a great start!

[MI Meltdown]

Dovette and all thank you; the US in general is in a time of reckoning as we find ourselves facing violent competition from foreign interests. Let's hope that there's a light at the end of the tunnel for this country.

[twuoo]

I thought a deed in lieu was that you hand over the keys and walk away. You are not responsible for any shortage? I thought if a house went into foreclosure, that if there is a shortage on the sale, that's when you are responsible.

Anybody can clarify this?

Thanks!

[lrprn]

Anybody can clarify this?

Check out these references about deed in lieu of foreclosure - http://en.wikipedia.org/wiki/Deed_in...of_foreclosure and http://www.afscanhelp.com/deed.cfm

HTH!

[SinkingFast]

In order to get a DIL, the Lender has to agree. You don't just offer and it's an automatic thing.

In most cases, the Lender will only consider a DIL offer if you have just the 1 mortgage on the property. A 2nd or HELOC is generally a deal breaker.

Generally, getting a Lender to accept a DIL offer is like applying for the mortgage in reverse. You have to provide your income and expenses information, why your financial circumstances have changed, etc. Then the Lender decides whether or not to accept the DIL offer.

DIL offers can be dangerous for the Debtor. The information you provide,......... Income and Expense info,......... Can be turned right around on you. If you haven't suffered a life altering event, the Lender can use the information to claim and prove you originally took the loan under fraudulent pretenses.

Negotiating a DIL offer is best done thru an attny to be sure your legal interests are protected.