Michigan State Foreclosure Procedures
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Demand Letter or Notice to Accelerate
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Note that after being 90 days late on a mortgage payment a homeowner will receive a letter from the bank reminding him of how past due he is and that he has 30 days to bring his account current. At this point the homeowner is supposed to pay up what is due or make some sort of payment arrangement with the bank. If at the end of the 30 days he has not done so, his account will be referred to the bank's foreclosing attorneys. At this point the attorneys will arrange a foreclosure sale and set a sale date.
Sherriff's Sale and Redemption Period
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Know that a public notice for the sherriff's sale will be published and anyone is allowed to bid for the property. If the home is sold, it becomes the property of the buyer unless the homeowner is able to redeem it during the redemption period. If the property is not sold, it becomes the bank's as an REO (real estate owned). Michigan law allows for a redemption period of no less than 30 days and up to a year for the homeowner to reclaim ownership of the home. The homeowner will have to cure the entire debt including attorneys fees and any other fees to do so. If the homeowner is unable to do so, he can live in the house for the entire period of redemption before he is evicted.
The most important thing if you find yourself in this situation is to be in open communication with your bank before the sale date. It is more than likely that you will be able to reach a workable solution. Remember the foreclosure process is also expensive for the bank.
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