Michigan Foreclosure Laws
Expected Timeline: About two months.
Security Instrument: Mortgage or Deed of Trust
Type of Process: Judicial or Nonjudicial
Protections for Servicemembers: Mich. COmp. Laws § 32.517
Time to Respond: Homeowners do not need to receive notice via mail. Notice required to be published for four consecutive weeks before sheriff sale. Notice must also be published on property within 15 days of first publication.
Reinstatement Period: Reinstatement is allowed any time before the sale in judicial foreclosure. There is no reinstatement in nonjudicial foreclosure.
Protections for High-Cost Mortgages: None.
Redemption Period: For owner-occupied properties owing more than two-thirds of principal, redemption is six months after sheriff sale. For properties owing less than two-thirds, redemption is one year. For abandoned properties that owe at least two-thirds, redemption period is between one and three months.
Eviction Process: In judicial foreclosure, the judge may order eviction once the redemption period has ended. In nonjudicial foreclosure, the new owner will go to court to seek order for eviction, which may take from two weeks to a month.
Deficiency Judgments: Allowed in either judicial or nonjudicial foreclsure.
Limits on Deficiency Judgments: If the mortgagee bank purchases the property at auction, homeowners may use as a defense that the sale price was for less than the fair market value of the property.
Cash Exempted in Bankruptcy: $11,000 for single person, $22,000 for married couple.
State Statutes: Mich. Comp. Laws § 600.3101 to 600.3180, 600.3201 to 600.3280
Both the Non-Judicial and Judicial Foreclosure processes may be used in Michigan when the borrower defaults on the loan. When the Judicial Foreclosure process is used, the lender must sue the borrower in court to obtain a decree of the amount in default. The court gives the borrower a set amount of time to cure the default, and if the borrower fails to do so, the court issues a notice of sale.
If the Non-Judicial Foreclosure process is used, the original loan documents must contain a power of sale clause, authorizing the lender to sell the property in the event the borrower defaults. If the clause specifies the time, place, and terms of the sale, then those processes must be followed.
The sale process in Michigan requires the notice of sale to be published for four (4) consecutive weeks in a newspaper that is generally circulated in the county in which the property is located. Also, the notice must be posted on the property within fifteen (15) days of the first newspaper publication.
The sheriff of the county or the lender’s trustee conducts the auction on the date specified in the notice between the hours of 9:00 AM and 4:00 PM . The deed the high bidder receives at the auction becomes operative once the applicable redemption period has expired.
Michigan allows the sale to be postponed be posting a notice of the postponement at the time and place of the original sale date. If the postponement is for longer than one week, the notice of sale must again be published for four (4) consecutive weeks.
The borrower has the right to redeem the property. The length of the redemption period depends on the circumstances of the sale. If the property has been abandoned, the redemption period is thirty (30) days. If the remaining balance of the loan is more than two-thirds of the original amount of the loan, there is a six (6) month redemption period. In all other cases, the redemption period is twelve (12) months.
State Website: www.legislature.mi.gov