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Options for Foreclosures Under Michigan Divorce Law

On Behalf of | Jul 25, 2017 | Uncategorized |

Divorce is already an anxiety-inducing process. When you also have to face threats of foreclosure by the bank holding the mortgage on your home, the proceedings can be even more stressful. It’s difficult to think about how to handle the situation at a time when you and your spouse are involved in a number of divorce-related disputes. However, you do have options to address foreclosure proceedings and other real estate matters under Michigan law. Your success in resolving foreclosure issues depends upon communicating with the lender and working with your spouse as much as is possible under the circumstances. In addition, you should retain a divorce attorney to protect your interests, both in the divorce case and throughout the foreclosure process.

Sell the Home or Short Sale

You and your spouse may agree to sell the home, but this would only be appropriate where there is positive equity – usually not the case in a foreclosure. The best way to get the debt off the records would be a short sale, where you sell the property to a buyer for less than the mortgage amount; in turn, the bank does not pursue you for the difference.

Loan Modification

It may be possible to modify the home loan if you or your spouse wants to keep the property, and has the financial means to do so. With a loan modification, you work with the lender to restructure monthly payments, the interest rate, or other details. A loan refinance is another option. You or your spouse essentially pay off the old loan and initiate a new one, in the name of the person who intends to keep the home.

Deed in Lieu of Foreclosure

With this arrangement, you are basically giving the deed to the property to the lender in exchange for it dropping the foreclosure action. The fair market value of the real estate is key with a deed in lieu of foreclosure, as there are drawbacks if that amount is less than the mortgage balance.

Injunction on Foreclosure Proceedings

If your lender has already filed foreclosure proceedings in court, you may be able to stay the process pending settlement of your divorce. The bank has a financial interest in an asset – your home – over which Michigan courts have jurisdiction. A stay in the foreclosure case doesn’t make it go away, but it gives you time to consider and make arrangements for the options above.

Trust a Skilled Michigan Divorce Lawyer with the Complexities of Foreclosure

Having to deal with a foreclosure simultaneously with your divorce case is an added insult to injury in some cases, which is why it’s important to have an experienced attorney on your side. A lawyer can assist you with the different aspects of divorce that will impact your future, including property division, spousal support, domestic violence, interests in a business, and other issues. If you have questions about foreclosures or other divorce-related matters, please contact the Bloomfield Hills, MI Law Offices of Michael A. Robbins. Our attorneys can advise you more about your options or schedule a consultation to discuss your situation in more detail.