Home sold at sheriff sale--can redeem property if we buy back from purchaser(Freddie Mac). Once bought back, is property ours-free and clear?, or is prior mortgage placed back on home?
Answered on: 12/08/11, 7:50 pm by Audra Arndt
If you pay the redemption price in the amount of the outstanding loan, then why would there still be a loan on your house? that makes no sense. That's the same as if you owed me $20.00, and you paid me $20.00, would you still owe me $20.00? No.
If the redemption price is less than what was actually owed, there is still no loan placed on your home, but you could be responsible for the deficiency judgment if they pursued a civil lawsuit against you (which they can also do if you don't redeem, and/or they can sue on the Note itself if there is no collateral (the house) for the loan anymore). Due to the banks' secret and hidden ways to screw people constantly, I strongly suggest you retain a lawyer to ensure that you are properly protected. For example, if you redeem at a price that is lower than the amount owed, they don't sue you for the deficiency, they could still send you a 1099c and say it was for property taxes they paid on your behalf, which are NOT exempt from your income taxes and you'd have to pay tax liability on that amount just as if it was income from a job. The bank won't tell you this of course - you will find out when you get the 1099c in the mail at which point it's too late to do anything. These are the types of things that lawyers look out for and ensure will not come back to haunt you. Furthermore, is your house worth even close to the amount of the redemption? If not, why would you pay it when you can negotiate or have someone do a short sale for you, and sell it back on a land contract? Don't enter into a contract with just anyone, especially someone who comes to your door and solicits you. You'd contact a lawyer who has a relationship with a reputable company that specializes in these types of deals, such as me and my law partner.
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Audra A. Arndt & Associates, PLLC 6689 Orchard Lake Road #284 West Bloomfield, MI 48322► Other answers from this attorney