Michigan Foreclosure Laws
Judicial Foreclosure Available: Yes
Non-Judicial Foreclosure Available: Yes
Security Instruments: Mortgage, Deed of Trust
Right of Redemption Period: 6 Months (30 Days if Property Abandoned)
Deficiency Judgments Allowed: Varies
Time Frame: 60 Days
Public Notice: Publication
Michigan is considered to be a title theory state, which means that a property title will remain in trust until the loan is paid in full. The documents that secure a title in the state are called a mortgage or a deed of trust. Both documents serve the same purpose and have the same basic guidelines.
The state of Michigan permits two types of foreclosures: judicial or non-judicial foreclosure. Michigan has a statutory right of redemption policy, in which a mortgagor whose property has been foreclosed has a set period of time to reclaim it by paying off the loan along with any additional costs. The redemption period in Michigan is six (6) months, but for abandoned properties, the period is only thirty (30) days.
Michigan also permits deficiency judgments for lenders who sell a property at auction for less than the amount of the defaulted loan. They are able to sue the borrower for the remaining balance. However, the time period in which this can be done varies in the state.
Types of Foreclosures Allowed in Michigan
Michigan foreclosure law allows for judicial foreclosures on defaulted property. This type of foreclosure, also known as foreclosure by judicial sale, involves selling the defaulted property under court supervision. In order for a judicial foreclosure to be possible, no power of sale clause may be present in the loan documents.
The lender must file a lawsuit against the borrower. The court then decrees the amount of the mortgagor’s debt and allows them a short period of time to satisfy the default. If the borrower cannot pay within the allotted period of time, the court will issue a notice of sale.
The state of Michigan also allows for a non-judicial foreclosure, which is also known as foreclosure by power of sale. In order for non-judicial foreclosures in Michigan to be possible, the loan documents must contain a power of sale clause. The purpose of the clause is to authorize the lender to sell the property in the event of default to be able to recover what is owed on the property.
Non-judicial foreclosures do not require court supervision in order to sell the property. There are two ways in which a non-judicial foreclosure in Michigan can proceed. If the power of sale clause states a specific time, place, and outlines terms of sale, then the lender must follow the procedure that is stated. If there is no specification, then the sale must follow the following guidelines:
Power of Sale Requirements:
1. Before the foreclosure is initiated, the lender must publish a notice of sale for four (4) consecutive weeks in a newspaper that circulates in the county where the property is located. Within fifteen (15) days of the first publication of the notice, a copy of the notice must be posted at the property itself. Although the state does not have a default notice requirement, the mortgage document will govern the provisions in the notice and they must be adhered to.
2. The notice must contain information about the foreclosure, including the name of the mortgagor and lender, a legal description of the property, information regarding the redemption period, and other relevant details.
3. All foreclosure sales must take place between 9 a.m. and 4 p.m. as part of a public auction. The trustee or county sheriff will auction the property to the highest bidder, which may include the lender.
4. Foreclosure sales may be postponed by posting a notice of postponement at the original location the sale was originally going to occur. If the sale is postponed for over a week, the notice must be re-published in the same manner of the original notice.
Hiring Legal Help
Being issued a notice of foreclosure can be a scary concept, however, help is available. If you have received a notice of foreclosure in Michigan, speak to a leading foreclosure lawyer right away. Foreclosure attorneys work hard to prevent the repossession of your property. They will do their best to find an alternative to repossession, such as mortgage modification or refinancing, that your lender can approve. When you have a top foreclosure attorney on your side, rest assured that your case will end with the best possible outcome.
Contact a skilled team of Michigan foreclosure lawyers right away to get started on your case and defend your rights.