Sheriff Sale (also called Mortgage Sale)

                    

  1. A Sheriff Sale occurs after 4 consecutive weeks of newspaper publication (“insertions”) and posting of a notice on the property.
  2. Sheriff Sales are scheduled every Thursday, at 10:00, in the Washtenaw County Courthouse in downtown Ann Arbor.  You are not required to attend a Sheriff Sale.  Sheriff Sales for individual properties are sometimes adjourned for a week at a time.  The homeowner is not given additional notice of an adjournment; it is only posted at the Courthouse.
  3. Most properties are purchased by the bank that holds the loan (a “credit bid”) for the amount of the outstanding loan balance plus various fees and interest.  Sometimes another person or company will outbid the bank.
  4. The purchaser receives a Sheriff’s Deed (Sheriff’s Deed on Mortgage Sale) but does not yet own the property.
  5. The purchaser records the Sheriff’s Deed with the County Register of Deeds.  Once the sale occurs, the redemption period begins.

 

Your Rights After Sheriff Sale

 

  1. Even though an auction has been held and a Sheriff’s Deed issued, you have not yet lost your property.
  2. Most foreclosures give you a 6-month redemption period which usually begins on the date of the Sheriff’s Deed (if your property is large or you have a lot of equity, your redemption period may be longer).  If you know you won’t be able to redeem, you can use this time to find new housing.

a.)    You do not have to pay anything to your lender; save your money for moving expenses and/or a rental deposit.

b.)    Seniors can contact the Housing Bureau for Seniors for assistance in finding rental housing; others can call SOS for help:

Housing Bureau for Seniors: (734) 998-9339

SOS Community Services Housing Crisis Center: (734) 484-4300

c.)    Don’t feel pressured by the lender or its attorney or property management company to move out during the redemption period unless you are ready to go.  If you do move early, your property can be declared “abandoned” and the redemption period can be shortened.  If you get a notice of abandonment and you have not abandoned your property, be sure to respond quickly and in writing that you have no abandoned.

 

  1. You can get your property back if you can “redeem” it by paying the full amount to the holder of the Sheriff’s Deed, often your original lender or its attorney.  The amount due may change from the amount noted on the Sheriff’s Deed; so ask the lender’s attorney or the owner of the Sheriff’s Deed for the correct amount.  If you are able to redeem the Sheriff’s Deed, make sure that your redemption is recorded so your ownership remains clear in the public record.
  2. You can also try to sell your home during the redemption period, especially if you have a lot of equity (“equity” means the difference between the value of your Home and the remaining amount of the loan).  Again, work with the lender’s attorney or the owner of the Sheriff’s Deed so that you know for certain the mount needed to pay off the debt.  You may have to pay a broker’s commission and there may be other costs.
  3. At the end of your redemption period, if you have not already moved out, you will be served with eviction papers.  A court hearing will be scheduled, usually within 10 to 20 days.  You will then have an additional 10 days after the hearing date to move and remove your possessions (lenders’ attorneys will often give you more time if you ask).  If you don’t, a court officer will go to the house to remove you.  Your lender or its attorney or property management company may imply that you must move out immediately but the only legal eviction is one that is court ordered by a judge.
  4. Once your redemption period ends, you no longer own your home.  It is rare but possible that your lender will sue you for any deficiency.  “Deficiency” means the difference between the amount of the Sheriff’s Deed and the amount your former home is sold for (plus additional costs).  Being sued for a deficiency is somewhat more common with second mortgages or home equity loans.  If this happens to you, you should contact an attorney to respond to the lawsuit.

 

Being sued by your lender is very rare.  It is more common that the lender may file an IRS form 1099 which treats the deficiency as income to you.  You would then owe taxes on the deficiency.  You can protest this with the IRS – contact an attorney, certified public accountant, or qualified tax preparer to assist you.

 

  1. Scam artists target people who are facing financial difficulties, including foreclosure.  You should be very suspicious of anyone who contacts you offering to “help.”  One common scam is someone who offers to help save your house if you pay a fee.  Another scam is an offer to buy your house and allow you to stay on as “renters.”
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