Foreclosure is the way the mortgage company takes your house if you do not pay them.
There are other names, used for marketing purposes, like home equity loan, equity line, but the name has no legal significance.
Mortgage just means debt secured by real estate. That is, you pledged your house as collateral for a loan.
For there to be a lien on your house, the owners of the house have to sign, in writing, agreeing to put up the house to guarantee payment of the loan.
A mortgage note is the separate contract to repay the money at whatever interest rate, over what time period, and so on, that were agreed to, or imposed by, the mortgage company.
The owners have to sign the mortgage pledging the house, but anyone can sign the note.
Sometimes, the mortgage company will have only one of the owners sign the note.
That means that only the signer of the note is legally obligated to repay the money.
Many people have more than one mortgage on our home. The first mortgage recorded at the register of deeds is first in priority. That means the first has to be paid before the second mortgage, or third and so on.
So, for a second mortgage to foreclose and take your house, the second mortgage company would have to pay off the first mortgage.
This is not likely to happen, as most homes with two mortgages are now worth less than the balance owed on the first mortgage.
However, that second mortgage can still sue whoever signed the note, for the unpaid balance, if they are not paid.
Foreclosure by publication is still cheaper for mortgage companies than their other option, judicial foreclosure through a court.
To foreclose by publication, the mortgage company must first publish a notice in the legal news, and send it to you by mail, and post it at your home.
That first notice must tell you that you have two weeks to contact the mortgage company requesting a modification of the mortgage. Most, if not all, of the mortgage companies will wait a few extra days, but you should request a modification immediately. You have nothing to lose.
Modification means an agreement with the mortgage company that changes the interest rate or payment or other terms of your agreement to repay them.
Just by requesting it, you get another 90 days in your home for this process.
If you do not request a modification, within the allowed time, the mortgage company publishes and serves you with a second notice.
This notice tells you the day of the sale, by the Sheriff of the county in which you live, at the county courthouse.
There is actually an auction, which is held open for an hour. Not that many bidders are showing up these days.
This notice has to be published four consecutive weeks, so this part of the process takes a month.
In most cases, state law gives you six months from the sale date to redeem the house, which means pay off the entire balance owed.
After that, it will take a month or so to evict you if you are still living in your house.
What Happens In A Michigan Foreclosure?
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