If your mortgage sold for more at the Sheriff Sale, you still may have equity
that you have a right to claim.
Here’s how it works
Let’s say a person’s mortgage was $160,000, but sold at the Sheriff Sale for $165,000.
The AVM (Automated Valuation Module) suggested the home’s value was between $185,000 - $200,000.
This person’s home sold for actual market value at $190,000.
The mortgage payoff is what was bid at the Sheriff Sale plus interest and attorney fees, regardless of what was previously owed.
Now let’s say the full payoff is $168,000.
$190,000 – 7.5% = $175,750. Subtract payoff ($168,000) and a surplus (equity) of $7,750 remains. A little known law in MN says that the equity was theirs to keep! That’s right! Given the example above this person received a check for $7,750 at the closing. Obviously in order to see if there is any equity in your case, we need to know what your house is worth in today’s market.
So what’s the catch? If there are any junior liens such as tax liens, a 2nd mortgage, mechanic’s liens etc., those would have to be paid out of the surplus before you would be able to keep anything that’s left over.
This is NOT considered a short sale, but rather a statutory redemption sale. In addition, it is not considered a foreclosure, and a certificate of redemption will be issued to you upon a successful closing as proof that you avoided foreclosure.
To get an idea of how much money you may be entitled to, or if you have questions or concerns, please contact us.
Typically you will have less than 6 months to redeem by the time you are reading this. The average time to get a home listed and sold is 60-90 days so unfortunately time is not on our side.
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