Mortgage & Foreclosure Issues

Common mortgage issues

A mortgage is a legal agreement by which a bank or other creditor lends money at interest in exchange for taking a lien on the debtor’s property. Mortgages are secured by a promissory note requiring timely payments. Failing to pay on time, maintain insurance or pay property taxes allows a lender to declare a default — and the most powerful remedy a lender has is foreclosure. Michigan foreclosures are done either judicially or by advertisement.

Common problems that create mortgage disputes

1. The mortgage loan is sold and the new lender may not properly abide by the terms of the original mortgage.
2. Tax or insurance escrows are miscalculated by the lender, increasing payments unexpectedly.
3. The debtor’s finances change and the lender refuses to modify or temporarily adjust payments.
4. A brief “hiccup” from a job issue or emergency puts the owner behind, and they are surprised to learn they are in default.

Foreclosure alternatives

• Short sale: your servicer agrees to accept less from the sale of your home than what you owe.
• Loan modification: a change to your loan terms to make payments affordable and keep your home.
• Deed in lieu of foreclosure: voluntarily transferring the property to the lender to avoid foreclosure.
• Bankruptcy protection: the automatic stay can halt a foreclosure sale.