Selling Your Home - Metro Detroit short sale

Can a Metro Detroit home owner sell a home for less than its mortgage? 
Yes, in some case you can sell your Metro Detroit home for less than what you still owe on the mortgage.  It is usually a long and complicated process.  It all depends on your  lender. This type of sale is known as a "short sale." Sometimes a lender will be willing to split the difference between the sale price and loan amount, which still must be paid. A short sale may be more complicated if the loan has been sold to the secondary market because then the lender will have to get permission from Freddie Mac, the two major secondary-market players. If the loan was a low down payment mortgage with private mortgage insurance, then the lender also must involve the mortgage insurance company that insured the low-down loan.

Metro Detroit Short sale reasons

A lender will usually allow you to do a short sale if

1. You have lost your job due to being laid off
2. You are being transferred out of state
3. Divorce
4. Medical issues that have caused you to work less or lost your job 

How long does a short sale take?

To short sale your Metro Detroit home, it can take anywhere from 2 to 8 months to complete.  There are many steps a bank takes to approve a short sale.  They are in no rush to lose money, so many times the process takes 3-6 months

 Will I owe money for the difference between what I owe and what it sells for?

Yes you could.  It is all up to your lender.  Some lenders require a promissory note for some of the difference.  But some lenders will give you a release of deficiency letter.  That is what you want.  When your lender gives you a release of deficiency letter, they are saying you no longer owe them anything and that they will not come after you for any money.  A few years back President Bush also signed an act that released short sale sellers from owing any money on the deficiency.  But that ends in 2013 and we do not know if it will be extended.  You could walk away scot free and not owe anything when you short sale your home.

When does foreclosure actually begin?

Lenders will initiate foreclosure proceedings  on your Oakland County home when borrowers become delinquent in their mortgage obligations.  This usually happens after you miss three mortgage payments. The lender will then notify the borrower in writing that he or she is in default. The lender can request a trustee's sale or a judicial foreclosure, in which the property is sold at public auction. A borrower can redeem the Oakland County foreclosed home by paying the overdue amount and the pending payment after the notice of default is recorded.  In Michigan you have up to six months to redeem the property.   In Michigan the successful bidder cannot take possession until six months after the sheriff sale. If the former owner refuses to vacate the premises, the court can issue an eviction notice that allows the sheriff to come out and evict them. Borrowers should do everything they can to avoid foreclosure, which is one of the most damaging events that can occur in an individual's credit history.