"So we just ended the largest foreclosure crisis that this nation has seen since probably the Great Depression, right? What do we learn from that? Well a couple things: that you know, when foreclosure is about to happen, you're not foreclosed on until what we call the sheriff sale, where they literally on the County's steps auction the property off. A lot of notices go out, and sometimes the notices go out that it's going to be auctioned on a particular day but it never happens or might be a year later. We've heard of people sitting in their homes for two years who haven't paid their mortgage but haven't been foreclosed on either. But when there is a foreclosure and it goes to a sheriff sale, that means someone at the auction has bought the property…and it can't be the homeowner. So it's either the lender who’s foreclosing or some investor at the time, and then we have this right of redemption. There's the sixth-month period typically in Michigan that someone has to redeem their property and basically buy their property back. It's during that redemption time we occasionally get a sale because during the redemption time the property owner can still do anything they want with the property. They still own the property. It's just there's this timeline that's ticking by right so during the Redemption period six months is a default in Michigan, right? There's some nuances but think of it as six months. They have a right to stay there, right? They have a right to list it for sale. They're typically not obligated to make the mortgage payments, right? They got to keep the heat on and things like that, but what do we find most challenging? What do we need to process? Typically? What are we looking for on a property? That's goneto sale that's in Redemption. Well at a normal property when someone's selling their property a lot of times, they just have a mortgage with a bank. So when we go to sale that's in Redemption. Well at a normal property when someone's selling their property a lot of times, they just have a mortgage with a bank. So when we go to sell it we're looking for something from the bank with a payoff amount that says when you send this amount in will release our mortgage well with the sheriff sale, we're dealing with whoever bought the property at the sheriff sale.
So we're looking because the mortgage is extinguished at that point exactly. So we're looking for a certificate of redemption a Redemption certificate. In other words. We're looking for something that says we will redeem them property for this amount and that can get challenging if it's not a national bank or a local bank or some institution that's used to dealing with us. Sometimes it's a private investor who bought the property at the sheriff sale and is looking to make some money and they get a little irritated when all of a sudden the person shows up with funds to redeem the mortgage. So you get some challenges and some timing issues if that person doesn't cooperate and under Michigan law they have to have to cooperate they've got to provide payoffs that mechanisms like that, but it can add a little time to the closing.
So if you've got someone that's selling their house which is perfectly acceptable and during the Redemption period we just got to make sure that we're ahead of it to make sure that we're in contact with that investor and that they know that they've got to provide them. Yeah. I think it's that early contact getting that first Redemption certificate or that Redemption amount and pay off letter early on in the process. Even if we have to update it. At least we've made contact we've run them down. We've got engagement by the person holding the sheriff's team. It doesn't come as a surprise three or five or whatever days out well and and once the transactions over and we send that payment into that private investor. Yeah, they don't always realize that they've got to record a certificate of redemption. Right so many times what we'll do is we'll exchange the payment for the certificate of redemption. If it's a large Bank there used to doing that they understand Michigan law when they receive the money, they'll discharge or give that certificate of redemption but a private investor may not so what happens to Second leans. In second position after Redemption ends, once Redemption ends those subsequent leads are wiped out but if you're doing a transaction during the Redemption period every one of those liens still exists, they're still valid and they've got to be paid they do so a lot of times that turns into a short sale conversation during this Redemption period to get the to get the deal done. Yep, very critical a lot of people miss that step. Absolutely."
