We filed bk a yr ago. We did NOT reaffirm our home but the banks been good with letting us pay and stay on an 18 mo agreement. The agreements up. They know we will not reaffirm since the mortgage was for 217k and the value is now 144k. We asked to continue our pay and stay. The bank said the knew we would not sign a mortgage but would work something out. Then we get the call congrats we have a 25 yr TERM with a seven yr BALLOON and your payments are 300 a month HIGHER and yes the mortgage is for 217,000 73k more than the house is worth. WTH. We are not signing this. Has anyone ever heard of such a thing? Next, even though we went thru the bk they still have to foreclose now we have never missed a payment til today I'm not paying and in Michigan we have a six month period of redemption after the sheriffs sale so..... How long can we live here before we have to move? This doesn't even sound legal! Help? Anyone?
I think you answered your own question - you can refuse to sign, they can foreclose - you'll have to move after the redemption period has expired. That might be a year or longer away, depending on how long it takes them to file.
I'm not sure why "that doesn't sound legal" - if the bank can get you to agree to pay more than the house is worth, especially after a bankruptcy, the have you in a serious pickle. You can't re-file for BK for several years.
That said, they have a right to recover their property if you don't pay. It's to your benefit that it takes so long and costs the lender so much to foreclose. My tenants will be forced out of (my) rental home here in AZ exactly 18 days after a missed rent payment. Six months plus of free rent is a "gift", you should treat it as such, you've effectively traded your good credit for rent & a "get out of jail free" card on the house deal that didn't go your way.
I'd be sure and have an attorney look over whatever agreement you signed to stay in the property after the BK - & also verify that the foreclosure hasn't taken place. If I were the lender, I would have required you to deed the property back in exchange for being able to stay as a tenant, foreclosure may not be necessary in that case.
If you are correct and they have to go through the foreclosure process, it will take about 2-3 months before the auction. They will have to serve notice that they are intending to foreclose with 30 days to respond, and then they will set an auction date which will generally be 30 days away. After the auction, you will have a 6 months redemption period as long as you don't vacate the house. At the end of the end of the redemption period you will be served with an eviction notice. Property title does not actually transfer until the end of the redemption period. This would mean that you would have about 9 months to live in the house.
I would suggest you contact a MSHDA certified housing counselor about your options since it is complicated by the bankruptcy. You may also still be able to short sale the house if you want to avoid foreclosure.
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