Buying house back after sheriff sale.

[adviceplease]

I live in Michigan and I was talking to a friend of mine that is also going through foreclosure. She was told that her home sold at the sheriff sale for $20,000. She was also told that if someone was willing to give her a loan that she would be able to get her home back for the $20,000 plus the intrest that added up during the foreclosure process, and the amount the lender paid for homeowners insurance during the period. Or she can put it up for sale and if it sells for more than what is owed before the redemption period is up she can pay off the balance and keep the difference. So basically she can get her $150,000 home for around $30,000. Is this true? I thought you either get it back for what is owed on the original loan or let it go?

[Miknan]

I wish somebody knowledgeable has answered this but my guess is she can only buy it back on what she owes on it, not only $20k but again, I'm only guessing. I live in Mich also and my house is getting close to foreclose so I'd like to know that myself.

[tobee43]

more than likely the bank purchased back the property because they hold the lien.

when one buys at a foreclosure they have to pay off the lien holder in full, as well as any outstanding amounts associated with the costs. and, one needs to be really careful, because of all the horrible situations coming from these sales as not being clear titled. so you can run into a big mess. many times those "hidden" costs one is not exactly told about, not in every case of course, however, i'm certain we all have heard the terrible stories of those that picked up a house at a foreclosure sale only to find out the house should have never been sold for one reason or another. it's a tricky thing...

[HHM]

I don't think that is true. Redemption, as I understand it, allows the borrower to buy the house for what you OWE the bank + costs, not what the bank bought it for. But state law varies. Honestly, if that were really an option, there would be a lot more written about on the web.

[Miknan]

I found this on a foreclosure Detroit website. It seems to say you can redeem at the sale price but later mentions you could be responsible for the difference. Seems like a contradiction to me.

"*
If I want to buy back the property, what is the purchase price?
At the sheriff’s sale, the purchaser paid a certain amount of money to purchase the property. Often the purchaser will be your mortgage company although it could also be another investor. The amount necessary for you to buy back, or redeem, your property is the amount the purchaser paid, plus some allowable costs and a daily interest rate based upon your mortgage loan interest rate. You can learn the sale price for your property by obtaining a copy of the sheriff’s deed from the Register of Deeds in the county where the property is located.
*
What if the purchase price at the sheriff’s sale is less than the amount of my loan?
It is possible that the sheriff’s sale purchaser, even if it was your mortgage company, paid less than the amount due on your loan. If you want to redeem, or buy back your property you do not have to pay the whole loan amount; you only have to pay the purchase price from the sheriff’s sale even if it is substantially less than your loan amount.
*
Regardless of whether you redeem the property or not, if the purchase price from the sheriff’s sale is less than the amount owing on your loan then you may be responsible for the difference, called a deficiency. The amount of the deficiency is set by the sheriff’s sale purchase price, not what the purchaser sells it for later. The mortgage company (or another company to whom they sell the debt) can try to collect on this deficiency. If a company attempts to collect the deficiency, you should see legal counsel regarding your rights and obligations."

[tobee43]

I don't think that is true. Redemption, as I understand it, allows the borrower to buy the house for what you OWE the bank + costs, not what the bank bought it for. But state law varies. Honestly, if that were really an option, there would be a lot more written about on the web.

sorry that's what i meant..what one owes the Bank plus costs, not what the bank purchase it for, that's my understanding as well. exactly, i agree, if it was the easy everyone would be taking advantage of those sales.