REO Property And Payoffs
I have a deal I'm working on with a homeowner who lost their home at the foreclosure sale. The bank put up a minumum bid of $149,600 and took the house back. Eventhough the home owner owed $165,000 on it. The home is worth approx. $175,000. In Michigan, we have a 6 month redemption period. My question is, if the homeowner sells their home within the redemption, does the bank have to accept $149,600 and the selle keeps the rest? How does this work. I've left several messages with bank and they are not responding. Any help would be appreciated.
At the sale, the house will be sold to the highest bidder. If the highest bidder happens to be the mortgagee and if the highest bid happens to be $15K less than the amount owed, so be it. Any difference would be recoverable via a deficiency judgment against the borrower.
First and foremost, unless you have authorization from the borrower to speak to the lender they won't talk to you. Even then you'll probably have a hard time tracking down the right person to speak to about this property. Generally they won't speak to you at all until they received a recorded deed back from the recorder's office.
I'm not sure how Michigan's redemption process works but generally speaking the borrower will have to pay the highest bid plus any accrued interest and other expenses incurred by the lender (such as property taxes, etc) in order to redeem.