How To Buy Your House Back After Foreclosure TOP
My house in Michigan was sold at a foreclosure sale last week, but I still live in the home and am wondering if I am supposed to vacate it now. Also, if possible, I'd really like to keep the property. Is there some way for me to get the house back even though the foreclosure sale has already happened?
how to buy your house back after foreclosure
You don't have to leave the home yet and it is possible for you to get it back. Under Michigan law, foreclosed homeowners get a certain amount of time to repurchase or "redeem" the home after a foreclosure sale. Depending on your situation, you'll get a one-month, six-month, or one-year redemption period during which you can live in the home. This is explained in more detail below.
To find out how long the redemption period is in your particular case, check the notice of sale. (Mich. Comp. Laws 600.3212.) (This is the notice that was published in the newspaper and posted on your property as part of the foreclosure process. To learn more about foreclosure laws and procedures in Michigan, visit Nolo's Michigan Foreclosure Law Center.)
If you don't redeem the home within the allocated redemption period, you won't have another opportunity to get your house back this way. (Learn more general information about the right of redemption.)
You can live in the property during the redemption period. However, under Michigan law, you must allow the purchaser who bought the house at the foreclosure sale to inspect both the interior and exterior of the home during this time. (Mich. Comp. Laws 600.3238.)
Once the foreclosure process begins, you have a limited amount of time to catch up on your mortgage payments before your lender accelerates the loan and refuses to accept anything less than payment in full. Unless you can pay off your entire mortgage balance at this time, your home will end up on the auction block. Fortunately, that isn't always the end of the story. Depending on the circumstances of your foreclosure, you may retain a right of redemption that allows you to reclaim ownership of your home after the foreclosure process is complete.
Not every home is eligible for redemption. To redeem your home, your lender must have seized the property via a judicial foreclosure. In a judicial foreclosure, the lender files a foreclosure suit in court. The foreclosure process itself is a trial, and can take up to a year to complete. Because judicial foreclosure takes longer to complete and is more complex, most lenders opt for non-judicial foreclosure. Unfortunately, if your lender seized your home via non-judicial foreclosure, you do not have a right of redemption.
The redemption price is not determined by the amount you owed the lender when the foreclosure occurred or the total balance of your previous mortgage. According to the California Civil Code, the redemption price of your home is determined by the property's sale price at auction, plus interest charges. You must compensate the owner for any repairs and upkeep on the property, property taxes and insurance. If the property carries any subordinate liens, you must also pay off these liens before taking possession of the home.
A foreclosure can mean bad news for your credit score. It stays on your credit report for up to seven years and will drop your credit score significantly, making it tougher to qualify for credit cards and loan products or receiving exorbitant interest rates if you are approved. However, the impact will lessen over time if you manage your other debt obligations responsibly.
This can be hard, Crawford says, but if you can, cut back on little things like buying Starbucks, and look for ways to save, such as changing your auto insurance or cell phone plan or dropping your digital or cable television subscription.
In most states, you can get your home back after foreclosure within a certain period of time. This is called the right of redemption. In order to reedem your home, you usually must reimburse the person who bought the home at the foreclosure sale for the full purchase price, plus other costs. Below you can learn more about redeeming your house, condo, or other property after foreclosure. You can also read about the particular redemption requirements in your state.
You can buy a home after a foreclosure by doing three things:Wait for the loan foreclosure waiting period to pass
Rebuild your credit while saving for a down payment
Improve your spending habits using a budget
Losing a home to foreclosure can hit hard, both emotionally and financially. But having suffered a foreclosure doesn't limit you to renting for the rest of your life. The impact of a foreclosure on your credit will gradually lessen until the foreclosure eventually drops off your credit report. You can buy a home after foreclosure if your credit score has improved and your finances are in good shape. Here's how to get your credit ready to buy a home after a foreclosure.
Lenders consider a foreclosure to be a serious derogatory event on your credit report. (Only bankruptcy is worse.) Generally, banks don't start foreclosure proceedings until you have missed four mortgage payments. Missing that many payments could reduce your credit score by over 100 points even before the foreclosure. If you're also falling behind on other bills, your score could drop even more. The higher your credit score was to begin with, the worse the impact of foreclosure.
A foreclosure will stay on your credit report for seven years after the first missed mortgage payment, and you can't get a legitimate foreclosure removed from your credit history before then. While having a foreclosure on your credit report will lower your score, its impact could lessen over time if you're keeping up with your other bills.
Even if your credit has improved, having a foreclosure on your credit report will impose a waiting period that restricts when you can qualify for certain types of mortgages. Here are three types of mortgages whose waiting periods range from two to seven years.
Conventional mortgage loans follow rules set by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). You'll have to go through a mandatory seven-year waiting period after foreclosure before you can get a Fannie Mae- or Freddie Mac-backed loan.
The waiting period for a Federal Housing Administration (FHA)-backed mortgage is typically three years from the completion of the foreclosure action. You may qualify for an exception to the FHA loan waiting period if you can prove that the foreclosure was due to extenuating circumstances outside your control.
Getting a home loan backed by the Department of Veterans Affairs (VA) after foreclosure typically involves a two-year mandatory waiting period. However, depending on the lender, you may also be able to get a mortgage sooner if you can prove financial hardship.
Buying a home after a foreclosure is largely a waiting game. As mentioned above, you may need to wait up to seven years for the foreclosure to drop off your credit report, depending on the lender and the type of mortgage you're seeking. Proving extenuating circumstances can shorten the wait.
In addition to rebuilding your credit, you may work on a new attitude toward money. Take an honest look at your pre-foreclosure financial habits to uncover the reasons for the foreclosure. Were you overspending? Did credit card debt spiral out of control? Did you buy more house than your budget allowed?
You can give yourself an edge with sellers by getting preapproved for a mortgage. You may want to apply with several lenders to do this. If so, complete all your applications within a few weeks so credit bureaus will treat them all as one credit inquiry. It takes hard work and patience to buy a house after having a foreclosure, but your efforts will pay off when the key to your new home is in your hands.
Several years ago, I purchased a house in Princeton, New Jersey. I got laid off from my job last year, and since then, I've had trouble making my mortgage payments. I fell behind, and the bank started a foreclosure. I recently found work, but it doesn't pay as much as my old job. I don't want to lose the house. Can I buy it back from the bank after the foreclosure if I can somehow come up with the money?
Rather than counting on redeeming the home, you could catch up on past-due payments before the sale to reinstate the loan. Under New Jersey law, you may reinstate by curing the default at any time up until the entry of a final judgment, and judgment can be delayed to allow some extra time to reinstate. Or you could pursue other alternatives to foreclosure if you want to keep your house. For example, you might be able to arrange a mortgage modification, forbearance agreement, or repayment plan.
If you want to locate the statute that discusses your right to redeem the home after a foreclosure sale in New Jersey, go to Title 2A of the New Jersey Statutes. Statutes change, so checking them is always a good idea. How courts and agencies interpret and apply the law can also change. And some rules can even vary within a state. These are just some of the reasons to consider consulting an attorney if you're facing a foreclosure.
After the sale, if the property sells for less than what is owed, the creditor may try to come after the borrower for the remainder of what is owed to them. This is referred to as a deficiency judgment. In nonjudicial foreclosures, a lawsuit must be filed in order to obtain a judgment to collect the deficiency. In judicial foreclosures, a second lawsuit needs to be filed. These lawsuits must be filed within two years of the sale.
After the foreclosure sale, if the property sells for a higher price than what is owed, the excess funds would then be used to pay off any additional liens that may be on the property. If no other liens exist, or if there are additional funds after the junior liens have been paid, the rest of the funds may be available to the former homeowner.
The "right of redemption" refers to one's ability to reclaim the property even after the foreclosure sale takes place. In Texas, the "right of redemption" is only available for specific kinds of foreclosure actions such as foreclosures of certain tax liens and property owners association assessment liens. 041b061a72