What is the Foreclosure Process in Michigan?
Foreclosure is defined as the legal process that a lender or bank takes to claim a property in lieu of a debt. Foreclosure begins when a homeowner stops making payments to the bank and a Notice of Default is filed by the bank or lender. Foreclosure can also occur if the homeowner doesn't pay property taxes. The final result of a completed foreclosure is the loss of the property by the homeowner, and the resale of the property to repay debt owed the lender.
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Pre-foreclosure
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The homeowner can pay off the loan during a time called pre-foreclosure. The homeowner can also sell the house to a third party during this period. This period in Michigan takes up to 90 days.
Process
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In Michigan, foreclosures are by judicial action or a sheriff sale (using newspaper advertisement).
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Selling at Auction
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Auctions take place after 150 days at the county courthouse. The auction is conducted by the sheriff or his deputy. The public is invited to bid on homes, but they must pay cash on the day of the auction.
Bank-Owned Homes
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The bank can take possession of a home at auction of during the pre-foreclosure stage. Bank-owned homes can then become government foreclosures.
Redemption Period
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In Michigan, the homeowner can repurchase their home during a redemption period, up to six months after the sheriff sale.
Avoid Foreclosures
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Avoid foreclosures by contacting your lender and see if you can arrange alternatives, such as mortgage modification or partial claim, which is a one-time payment from an FDA-insured fund that is used to bring your mortgage current.
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