How can I get the bank to take a deed in lieu of foreclosure in Michigan?

Over the last several years, Michigan has posted one of the highest unemployment rates in the nation, currently hovering around 14.6 percent. The State ranks sixth in the nation for the number of homeowners experiencing foreclosure. Lenders may foreclose on deeds of trusts or mortgages using either a judicial or non-judicial foreclosure process. Property owners may be able to obtain a deed in lieu of foreclosure Michigan if the lender is willing to halt the foreclosure process, which can be much more expensive.

The Pros & Cons of Deed in Lieu of Foreclosure

Once a homeowner has fallen behind on the mortgage payments, the borrower may ask if they will accept a deed in lieu foreclosure which could save the bank time and money in the long run. This process involves the homeowner voluntarily transferring title back to the lender in exchange for cancelling the remainder of the debt. Banks may be more willing to pursue this option when the value of the property has decreased substantially.

The downside is any equity in the home will be lost and the homeowner may be required to pay taxes on the amount of the debt forgiven. Some lenders may require the homeowner to put the house on the market first before accepting a deed in lieu. In addition, homeowners who have second or third mortgages or tax liens on their property may not be eligible for this option.

Consult a Michigan Foreclosure Attorney

Nobody wants to go through the process of a foreclosure. It’s expensive for the lenders and can devastate the credit of the homeowner. There are several other options individuals can pursue when they are experiencing a temporary financial setback. Forbearance may be an option if your income has been temporarily reduced. This would allow the mortgage payments to be reduced or suspended for a short period of time. When seeking alternatives, contact an experienced foreclosure attorney in Michigan for advice.