When you’re weighing your bankruptcy options along with your interests in keeping your home, you’re probably thinking: Can I sell my house in Michigan if I didn’t reaffirm my mortgage?
Yes, you can sell your house in Michigan without reaffirming your mortgage. The mortgage lien remains, so proceeds must first pay the lender. Any remaining equity may be yours, subject to exemptions. Consult a legal expert to ensure compliance with Michigan laws.
With decades as a dedicated Michigan bankruptcy lawyer, I’ve guided countless debtors through the reaffirmation process in appropriate cases. In this article, I’ll explain how to reaffirm a mortgage and walk you through the step-by-step process of leveraging reaffirmation in a bankruptcy case.
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FAQs About Selling a House Without Reaffirming a Mortgage
What Happens if a Mortgage is Not Reaffirmed?
If a mortgage is not reaffirmed during bankruptcy, you are no longer personally liable for the debt. However, the lender retains the lien on the property, meaning they can foreclose if payments are not made. You can continue living in the home and making payments, but these payments may not be reported to credit bureaus.
Can I Sell My House if I Did Not Reaffirm?
Yes, you can sell your house even if you did not reaffirm the mortgage. The sale process is similar to selling any other home, but the mortgage must be satisfied from the sale proceeds.
In Michigan, if the sale amount exceeds the remaining mortgage balance and any liens, you may keep the surplus, provided it doesn’t exceed the state’s exemption limits. Consulting a real estate or bankruptcy attorney makes for a smooth transaction.
Can You Sell Your House if You Haven’t Finished Paying the Mortgage?
Yes, you can sell a house with an outstanding mortgage. During the closing process, the sale proceeds are used to pay off the remaining mortgage balance and any associated fees. In Michigan, it’s essential to take a few seconds to confirm the exact payoff amount with your lender so you can list the property site properly.
If the sale price exceeds the balance, you keep the remaining equity. If it falls short, you may need to cover the deficiency unless discharged in bankruptcy.
Can I Sell My House if My Mortgage Is in Forbearance?
Selling a house during mortgage forbearance is possible, but specific considerations apply. Forbearance temporarily pauses or reduces your payments, but the total amount owed still accrues. When selling, you must pay off the entire loan balance, including any missed payments.
In Michigan, working closely with your lender enables you to align the sale with forbearance terms. Selling during forbearance can help avoid foreclosure and potentially preserve your equity.
What is a Short Sale in Michigan?
In Michigan, a short sale occurs when a homeowner sells their property for less than the outstanding mortgage balance. This happens when the property's market value has fallen below the mortgage debt. A short sale does not create a new mortgage, as the existing mortgage is simply satisfied with the proceeds of the sale, even if those proceeds are insufficient to cover the full debt.
