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Tag: Tax Foreclosure

How Do I Stop a Property Tax Foreclosure?

Posted on by Hometown Development

Property tax foreclosure is a complicated situation to be in. Once the foreclosure process has begun, it can seem like there’s no way to get ahead of it. Fortunately, you can stop property tax foreclosure and understanding how it works is critical to saving your home and your credit.

 

What is Property Tax Foreclosure?

Property tax is a fee you pay the county you live in, based on the value of your property. This tax must be paid annually. If you fail to pay your property taxes, the property tax foreclosure process takes three years to complete, after which you may lose your home and significantly damage your credit.

To better understand how to stop property tax foreclosure, let’s start by taking a look at how the property tax foreclosure process works.

Property Tax Foreclosure Process

If property taxes are not paid on time, the tax is considered delinquent and penalties are applied. After one year, if the property tax payment is not made or is incomplete, your property is placed on a preliminary forfeiture list

At this point, you can stop property tax foreclosure if you’re able to pay back the owed taxes and any associated fees and interest. Interest rates during the first year are at 1 percent per month, but they will go up to 1.5 percent after the first year. It will be easier to pay back the missed taxes if you’re able to pay them sooner, rather than wait — even if you can only make payments toward the owed amount.

After Year 2, the property is forfeited to the county treasurer. Forfeiture does not mean the same as foreclosure. You can continue to live in your home after the property has been forfeited. However, once you’re in the forfeiture stage, you can only pay back all the owed taxes in a lump sum in order to stop property tax foreclosure. This is a very difficult thing to do if you’re still struggling to pay back the taxes and accrued interest from the first year of delinquency. 

How to Stop Property Tax Foreclosure

Once we can assess where you are in the process, we can understand the best way to stop property tax foreclosure for your situation. If you’re facing forfeiture or property tax foreclosure you still have options to save your home: you can pay off all the owed taxes, or sell your home in order to stop property tax foreclosure.

How to Stop Property Tax Foreclosure by Paying Owed Taxes

To stop property tax foreclosure you will need to pay back the owed taxes. Depending on where you are in the property tax foreclosure process, you may either be able to spread out payments over a year, or you’ll need to make a single payment. If you don’t have the necessary funds right away, there may be emergency loans available to help you meet tax deadlines, after which you can pay back the taxes over a longer period of time.

Some taxpayers may be eligible to apply for deferment of property taxes. Eligibility requirements are steep, and only some low income, disabled, veteran, or elderly applicants may be permitted to defer taxes. 

Property tax deferment allows taxpayers more time to pay back the owed taxes. However, it cannot stop property tax foreclosure from moving forward once taxes are due.

Can’t Pay Your Property Taxes? Here’s How to Stop Property Tax Foreclosure

If you can’t afford to pay the property taxes and tax deferment isn’t an option, you will likely need to part with your home in order to resolve the delinquent taxes. Rather than wait for your home to go to auction, you can take control of your situation and sell your home on your own terms. Then, you can pay the owed tax and move on in a home you can better afford.

The advantage of stopping property tax foreclosure by selling your home is that you can avoid the severe hit to your credit that happens in a foreclosure. This puts you in a better position to rebuild your credit and financial status, so you can apply for a loan or purchase another home in the future.

How to Stop Property Tax Foreclosure by Selling Your Home

When you sell your home to stop property tax foreclosure, it’s important to complete the sale quickly. If you sell your home fast, you won’t accrue as much interest, so you’ll be able to pay off the tax and use the rest of the sale towards your next home.

To sell quickly, you can price your home competitively and wait for a buyer to find you, or sell to a real estate investor for a quick and hassle-free sale.

Price Your Home Competitively

When you sell your home on the traditional real estate market, it may take time to prepare your home for sale, work with a Realtor, and wait for a buyer to make an offer. Pricing your home competitively may entice a buyer to purchase your home in time to stop property tax foreclosure. Alternatively, if you don’t want to go through the process and hassle of selling your home this way, you can sell to a real estate investor.

Sell Your Home to a Real Estate Investor

Selling your home to a real estate investor is a great option if you need to sell quickly. Real estate investors will purchase your home as-is, meaning no preparation needed to get it ready to sell. They will make you a fair offer based on the market value of your home in its current condition. 

Also, because offers from real estate investors are often in cash, the closing process is simplified, so you can close the sale in as few as five days or on your own timeline. If you’re looking for a fast, simple option to sell your home to stop property tax foreclosure, this is it.

If your property is at risk of property tax foreclosure, now is the time to talk to Hometown Development. Foreclosures become final at the end of March, so there’s still plenty of time to find a solution. Let our team help.

What to Know About Michigan Property Tax Foreclosure

Posted on by Hometown Development

Foreclosure is a scary word. What does it mean? What can be done to stop it? Here’s everything you need to know about Michigan Property Tax Foreclosure.

What does property tax foreclosure mean?

If you don’t pay the real property taxes on your home, you will eventually lose your home, in other words, it will be foreclosed. Fortunately, in Michigan, the property tax foreclosure process takes about three years.

If property taxes are not paid by March 1st, the property is considered in delinquency. Taxes can still be paid, but late fees may apply. After the second year, the property is forfeited to the county treasurer and the foreclosure process begins. This does not mean you have lost your home.

The next year is referred to as the redemption period. During this period you have about one year to pay back the taxes owed on the property. If the taxes are still not paid as of March 31st of the third year, the county treasurer will take ownership of the property and can put it up for sale. At this time the property is fully foreclosed and tenants must vacate the premises.

How long do I have before I lose my home?

The entire property tax foreclosure process in Michigan takes about three years. If you have received a notice of forfeiture, you still have a year to pay your taxes to keep your home. If you are able to do this, the foreclosure process will be stopped. However, if you are unable to pay back your property taxes, at the end of the process it is likely your home will be foreclosed.

What can I do to stop the foreclosure?

Once your home is in the foreclosure process, you have a few options. The first is to pay what is owed on your home, plus a little in interest and fees. You may be eligible for reduced or deferred taxes if you are elderly, disabled or meet specific income requirements. If so, you must apply for deferment using an application and submit it to your county treasurer by the deadline.

If you are not able to pay the full amount of property tax you may be able to reduce the amount of taxes owed. Property taxes are based on your home’s estimated value. If you can contest the reduced market value of your home, you may have to pay less tax.

Finally, if you are still unable to afford the Michigan property tax and avoid foreclosure, you may wish to sell your home. This option enables you to be rid of the debt and move on with your life in a new home you can more securely afford.

How do I sell my home?

When it comes to selling your home you can either sell it yourself or sell it via a reputable real estate investor. Let’s explore what that means for you:

Sell it Yourself

Selling your home yourself means you solely are responsible for preparing your home for sale, marketing it to prospective buyers, and following through with any inspections or closing processes after an offer is accepted. This process can take anywhere from 6 months to a few years, depending on how many changes you must make to the property to prepare it for selling, and how long it takes to find a buyer. Even after doing this, inspections and the closing process may delay the final sale by weeks or months.

If you are keen to DIY and have a knack for navigating the fluctuating housing market, you may feel comfortable selling your home on your own. If, however, you are facing a tax delinquent foreclosure, and you don’t have much time to pay back those property taxes, it’s a good idea to seek the help of a real estate investor to move the process along quickly.

Sell to a Michigan Real Estate Investor

Selling your home to a real estate investor has many advantages. They will help you out of your back taxes right away, so you don’t have to worry about the government knocking on your door.

A real estate investor will give you a fair price for your home, something that isn’t guaranteed if you try to attract a buyer on your own. They will work with your timeline and you won’t have to worry about making changes to your house to get it ready to sell. For many homeowners, this process is a simple and stress-free way to get on with your life and out from under the weight of your debt. 

Whatever route you decide to take, there are resources to help you. Here at Hometown Development, we know the Michigan property tax foreclosure process can be long and confusing. If you have questions about a home in the property tax foreclosure process, or to sell your home before it’s foreclosed on, give us a call at 616-379-3090 or contact us online today to discuss your options.

Can I Sell A Home In Pre-Foreclosure?

Posted on by Hometown Development

Foreclosure is a scary word, especially if crushing mortgage payments after an accident, illness, divorce, or another tragedy have rocked you and left your finances unstable. If you’re worried about being able to pay your mortgage and the possibility of foreclosure, here’s what you need to know about selling a home in pre-foreclosure and how to sell your house before the foreclosure happens.

Can I sell a home in pre-foreclosure?

Yes! If you’re facing foreclosure, you have the opportunity to sell your home up until the home is sold at auction in a Sheriff’s Sale by the mortgage lender. 

A home will be foreclosed upon when a mortgage lender exercises its right to sell a property which the owner has not kept up payments on. The lender gives the homeowner a period of time to make payments or other arrangements before selling the property.

The lender will then auction the property in a Sheriff’s Sale. The notice of the Sheriff’s Sale must be published for four weeks before the auction, during which time the homeowner can sell the property, refinance the property, make all outstanding payments on the property, negotiate a loan modification with the lender, or file bankruptcy.

 

When is it too late to sell my home during the foreclosure process?

After a foreclosed home is sold by the mortgage lender at auction, the homeowner has a redemption period (typically between six months and a year) to pay the lender in full to retain ownership of the home. So, after the Sheriff’s Sale, unless you pay the mortgage lender all that you owe them, you no longer own the home, and you can’t sell it.

How can I sell my home

pre-foreclosure?

When you’re facing a foreclosure, you have a couple of options for selling your home. You can go the traditional route, listing your home for sale and possibly hiring a realtor. While this is the best way to get the full market value for your home, it can take months, even years, to sell a home this way, and in a pre-foreclosure scenario, you don’t have that time. There are only a few weeks of notice before the Sheriff’s Sale and a year or less of a redemption period, which would make it hard to sell the house on the traditional market, through a realtor.

However, there are selling options that are quick, easy, and relatively painless—selling for cash to a development company. These companies buy homes that they see great potential in—whether for renovation, the neighborhood, etc.—quickly, for cash.  

 

If your home is facing foreclosure, the Hometown Development team can help. We purchase properties in cash and can close on a sale in as little as 5 days. To avoid foreclosure, and move on with your life quickly, give us a call at 616-379-3090 or contact us online today. 

Understanding the Michigan Foreclosure Process

Posted on by Hometown Development

Every state has different home foreclosure laws, and Michigan is no exception. While the process is generally very similar from state to state, understanding the specifics of the Michigan foreclosure process is important for understanding what could happen to your home if you stop making mortgage or property tax payments. 

Let’s dive into the complicated procedure of the Michigan foreclosure process. 

Michigan Foreclosure Process: Understanding Foreclosure Types

Here is an overview of the Michigan foreclosure process: if you are unable to make your mortgage or property tax payments, eventually your home will go into foreclosure. If, after a prescribed length of time, you aren’t able to pay back the money you owe to your lender or to the county, your home will be foreclosed on. That means that your lender or county will repossess the home, and then put it back on the market to sell and recover those missed payments. 

While this can sound frightening, there is good news for Michiganders: the Michigan foreclosure process offers plenty of warning signs when your home is in danger of foreclosure, and homeowners usually have a few options available to them in order to avoid foreclosure. 

Before we take an in-depth look at the Michigan foreclosure process, it’s important to understand what type of foreclosure you might be facing: mortgage foreclosure or tax delinquent foreclosure. Continue reading to learn more about each type. 

Michigan Mortgage Foreclosure

Michigan mortgage foreclosure occurs when a homeowner stops making mortgage payments to their mortgage lender. Your lender is the bank to who you make your mortgage payments. If you stop making mortgage payments, you are at risk of a Michigan mortgage foreclosure. 

Michigan Tax Delinquent Foreclosure

Michigan tax delinquent foreclosure occurs when a homeowner stops paying their property taxes. In Michigan, you pay property taxes yearly, and you are taxed based on the estimated value of your home. If you stop paying your property taxes, you are at risk of a Michigan tax delinquent foreclosure.

Understanding the Michigan Foreclosure Process

There are different foreclosure processes in Michigan for each of these two types of foreclosure. You will want to follow the foreclosure process for your specific type. To help you understand the different foreclosure processes in Michigan, we explain each one in depth below. 

Michigan Foreclosure Process if You Fall Behind on Mortgage Payments

If you’ve fallen behind on your mortgage payments, it’s important to understand how the Michigan mortgage foreclosure process works. 

In the state of Michigan, mortgage foreclosures are non-judicial. This means they are settled out of court, and your lender doesn’t need a court order to sell your home at a public auction after you’ve been delinquent for 120 days. 

Let’s take a look at each stage of the Michigan mortgage foreclosure process:

  • Days 2-36 after a missed payment: You are considered in default the day after you miss a payment on your mortgage. However, most lenders have a 15 or 20-day grace period. If you know you are going to have trouble making payments, now is the time to have a conversation with your lender. 
  • Day 45 after a missed payment: If you haven’t yet talked to your lender by day 45, they will send you an official, written notification that you are in default on your loan. They are also required to assign a point of contact or agent to your case so you have someone specific to call with any questions or negotiations. They may also provide you with additional options for remedying the situation. 
  • Day 121 after a missed payment: Your lender is allowed to start the foreclosure process. They will schedule a sheriff’s sale date. They are required to publish the date of the sale four weeks beforehand, along with details of the debt. Your lender will also post a notice on your property.
  • Sheriff’s Sale: Homeowners still have the opportunity to work something out with their lender until the date of the sheriff’s sale. You may be able to arrange a short sale, accept a cash offer for your home, or work with your lender to find a reasonable repayment plan. 
  • Redemption Period: In the Michigan foreclosure process, homeowners typically have a six-month redemption period. If you owe less than a third of your original loan, you may have a 12-month redemption period. During this time, you can live on the property and even sell or buy back your property. However, homeowners do have to allow whoever purchased the home at the sheriff’s sale to inspect the home upon reasonable notice. 
  • Michigan Foreclosure Process is Complete: The process is complete, and the homeowner has to leave their home. 

 

While this process can feel intimidating and stressful, there is a lot of time between when you first miss a mortgage payment and when eviction happens. This gives you the opportunity to find a solution, keeping in mind that lenders generally do not want to foreclose on your home. For lenders, it’s easier to work out a solution that gets you back on track for your mortgage payments. If you’re currently in the middle of the Michigan foreclosure process, do your best to get in contact with your lender to see what your options are. 

Michigan Foreclosure Process if You Fall Behind on Property Taxes

In Michigan, the property tax foreclosure process is much different than the mortgage foreclosure process. Instead of owing money to your lender, you owe money to your county. 

The property tax foreclosure process in Michigan is a three-year process. Property taxes have priority over any other lien on a property, which means that if you fall behind on your property taxes, your lender might step in to pay those taxes. Lenders will then require additional payments from the homeowner in order to cover those taxes that they paid on their behalf. 

If you miss a property tax payment, the sooner you start making payments, the better. The longer you wait to pay, the more fees will pile up, and homeowners are required to pay back everything that they owe in full.

Here’s how the Michigan tax foreclosure process works:

  • March 1: Michigan property taxes are due to the county by February 14. If you have not paid those property taxes, your county will be notified, and your property will be marked delinquent on March 1st. The county will add a 4% administration fee and a 1% monthly interest rate to the amount you owe. 
  • County Notices: The county will send you three notices before your property is considered forfeited. Those notices are sent out in June, October, and the following February. By February of the second year, the county is allowed to post notices of delinquent properties in the newspaper. 
  • March 1, Second Year: If you haven’t paid off property taxes by the following year on March 1, the county considers your property forfeited. In order to redeem your property, you would have to pay back all of your taxes and accrued fees in one lump payment. Residents are still able to live in their homes. 
  • Certificate of Forfeiture: In April of the second year, the county will officially record a certificate of forfeiture, stating how much property taxes are owed, and that the homeowner has not paid those taxes. 
  • Show Cause Hearing: The Foreclosing Governmental Unit will schedule a show cause hearing, where you have an opportunity to explain why your home should not be foreclosed on. The FGU is required to notify you of the date of this hearing, and it’s important that you attend. This is one of your last chances to redeem your home before it is foreclosed upon.
  • March 30, Third Year: If you still have unpaid property taxes in the third year, the circuit court has to make a decision on your property. The courts will make a decision to foreclose or not foreclose on your home.
  • March 31, Third Year: If the courts decide your home should be foreclosed on, or if you did not attend your show cause hearing, this is the date of foreclosure and the date that you must leave the premises. 
  • July-August, Third Year: The county will auction off your home in an attempt to recoup the costs of the unpaid property taxes. It’s too late for homeowner to redeem their home by paying back the taxes they owe. 

 

The Michigan foreclosure process for unpaid property taxes is long. You have almost three years to pay back your taxes. If you’re not sure what to do and your home is in danger of foreclosure, it’s important to know that you still have options. You don’t have to wait for your lender or the county to take your home. 

Avoid Foreclosure with Hometown Development

If you’re hoping to avoid the Michigan foreclosure process, our professional team at Hometown Development can help. We purchase properties in any condition, for cash, and we can close in as little as five days, helping you get out from under that foreclosure quickly. Contact us online, or give us a call at 616-379-3090 to see how we can help.

How to Stop a Tax Foreclosure

Posted on by Hometown Development

Tax foreclosure is a scary thought for most homeowners. Since many tax foreclosures happen to homeowners who own their home outright and owe nothing to the bank, it can be a surprise to hear your home is in danger. If you’re at risk of tax foreclosure in West Michigan, here’s what you can do to stop it:

What is a Tax Foreclosure?

A tax foreclosure happens when a property owner has not paid their property taxes, and the county seizes the property.

How Does Tax Foreclosure Work in Michigan?

In Michigan, the tax foreclosure process takes three years from the time a property owner stops paying taxes. For example, let’s say a homeowner stopped paying their taxes in 2017. On March 1, 2017, the county will record that property as being tax delinquent. If the property owner continues not paying property taxes, the county will seize the property on March 31, 2020.

There are a number of steps between those three years, and the county is required to notify you of tax delinquency multiple times in those three years. If you recently received a notice of property tax delinquency, you might be wondering how you can stop a tax foreclosure.

How Can I Stop a Tax Foreclosure?

The Michigan tax foreclosure process is long, which means you have plenty of time to avoid a tax foreclosure if you can pay your property taxes. Here are a few ways to stop a tax foreclosure:

Pay Back Taxes in Year 1

If you’re able, it’s best to pay back any missed taxes in the first year of tax delinquency. If you can pay before March of the second year, it’s a little easier to stop the foreclosure process. The county will add a 1% monthly interest rate to the amount you owe, but in the first year you can pay back those taxes gradually if you’re unable to come up with all of the money at once.

Pay Back Taxes in Year 2

If you were unable to pay back the property taxes you owe in the first year, you still have a chance to avoid tax foreclosure. In year 2 of a Michigan tax foreclosure, your home is considered in the “redemption” phase.

According to the county, by not paying your property taxes you have forfeited your home. You can still live in your home at this point, but to redeem your home, you have to be able to pay back all taxes and fees in one lump sum.

Sell Your Home

Property tax foreclosures aren’t always easy to get ahead of. If you’re struggling to come up with the money to pay owed property taxes in full, it might be in your best interest to sell your home. Selling can give you the money you need to pay back those property taxes, and save you from having a foreclosure on your credit. If you own your home outright, it’s likely that you can even get enough to have a little cash leftover that will help you get started somewhere new.

When Is My Last Chance to Stop a Tax Foreclosure?

March 31st of the third consecutive year of unpaid property taxes.

If March 31st is drawing near, and you haven’t been able to pay back taxes or sell your home on the market, an as-is sale for cash might be the right option for you. Real estate investors can close in as little as 5 days, ensuring your taxes are paid off right before that March 31 deadline. Since as-is sales can be closed with cash, you’ll also end up with the money you need to move on in your pocket in just days.

Tax foreclosures are scary, but Michigan’s three-year redemption process helps give you a little time to figure out what to do.

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