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I'm amazed at the deals going on in today's market! I have to tell you of a deal that I heard of this last year, that I will call the Deal of the Century.
Initially, I need to explain about the foreclosure process in Michigan for you to understand about this deal. Initially, a person gets a couple months behind on their mortgage. Usually
around 2-3 months, is when the bank starts the process of taking the owner of the home into foreclosure. (Realize that the bank is not in the business of holding property and that they are in the process of holding and lending money.) At this time, the bank might consider what's called a "short sale". Literally, it means that the bank will come up short in what is owed on the mortgage if a home is sold. Today, more and more banks are willing to do a short sale because the foreclosure process is so expensive for them. (If you find yourself getting behind, please call me. There are things that can be done to help the process and prevent foreclosure!) Anyway, at this point the bank is required by law to list in the newspaper and other sources at least 4 times that a home is going into foreclosure. They are in the paper but in no particular order and almost "hidden". After this process is done and usually around 6 months of delinquency on payments, is when the home goes to the sheriff's sale and is auctioned off at the country court house. Anyone may bid on these homes with certified funds available that day and usually the bank bids what is owing on the bank. In the state of Michigan, the bank does not own the home. In fact, the owner still has the ability to pay up everything owing along with taxes and fees and has 6 months to do so before it actually becomes a foreclosure and bank owned. (HUD-government FHA homes are a little bit different in their process).
Here's the deal:
A Byron Center home was up in the sheriff's sale. It was initially on the market for over $700K (nice home!) and it's assessed value was over $300K!! The mortgage was only $140K. Now, what should have happened was the bank would normally bid what's owing on the home at the sheriff's sale which was the $140K. The bank mis-bid at $1.00 and someone bid the home for $2.00. This was sometime in July. I'm not sure of the results since there is still that 6 month waiting time that the owner or someone else could come in and make the mortgage current, but I don't know about you... I wouldn't mind getting that home (or any home) for $2.00. How about you?
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