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Michigan Foreclosure Law

Discussion in 'Foreclosure Laws' started by Moe, Dec 27, 2007.

  1. Moe

    Moe Call 1-800-779-4547 Staff Member Loan Safe Mortgage

    • Judicial State & a Non-Judicial State
    • Process period is 60 days
    • Sale publication is 30 days
    • Redemption period is 30-365 days
    • Sherrif sale
    Judicial Foreclosures are not common


    Pre-foreclosure Period
    Court foreclosures are permitted in Michigan; however, most mortgages contain a clause enabling a lender to sell a property out of court once a borrower defaults. While Michigan law does not require that a lender send out a default notice to the borrower before scheduling a foreclosure sale, the mortgage may require the notification. The borrower's right to stop the foreclosure by paying off the default is also dictated by the mortgage.

    Notice of Sale / Auction

    The foreclosure sale usually occurs about two months after the lender starts the foreclosure process. A notice of sale is published once per week for four weeks in a local newspaper, and the sale may not be less than 28 days from the first publication date. The notice is also posted on the property during the publication period. The notice of sale must contain the lender and borrower names, mortgage information, the default amount, a legal description of the property, and the length of the redemption period.

    A trustee or sheriff conducts the public auction between 9:00 a.m. and 4:00 p.m., usually at the county courthouse. Anyone may bid, and the property is sold to the winning bidder. The sale may be postponed by posting a notice of adjournment at the time and location of the sale.
    The person conducting the sale completes the necessary documents to transfer ownership to the winning bidder at the sale, and those documents must state the redemption expiration.

    The redemption period varies, but typically runs six months from the foreclosure sale date. During this time, the borrower can redeem the property by paying the winning bid amount and applicable costs.

    from http://www.realtytrac.com/foreclosure-laws/michigan-foreclosure-laws.asp

    Michigan foreclosure law states that a mortgage must include a Power of Sale that permits the property to be sold by public auction in the event of a default by the mortgagor in the terms and conditions of the mortgage.
    2. All assignments of the mortgage must be recorded.
    3. There must be a default under the terms of the mortgage, which makes the power of sale operative.
    4. The mortgagor must be given any required notices of default provided for under the terms of the mortgage and Note.
    5. The indebtedness must be accelerated.
    6. There cannot be any judicial action pending at law for recovery of the debt or any portion thereof.
    Michigan Foreclosure Publication and Posting Requirements:

    1. The Notice of Sale is published in the newspaper. According to Michigan foreclosure law, the Notice of Sale must include the following:
    a. The names of the mortgagor and of the mortgagee, and the assignees of the mortgage, if any;
    b. The date of the mortgage, and when recorded
    c. The amount claimed due as of the date of the notice (the date of the first publication).
    d. The legal description of the property.
    e. The length of the redemption period.
    2. The Notice of Sale must be published for 4 successive weeks, at least once each week.
    3. Within 15 days after the first publication a true copy of the Notice must be posted in a conspicuous place on the property.
    Michigan Foreclosure Sale :

    1. The mortgagee may make a credit bid at the sale and purchase the property.
    The purchaser at the sale receives a Deed to the property.
    a. The Deed only becomes operative if the property is not redeemed during the statutory redemption period.
    b. Upon expiration of the statutory redemption period, the purchaser acquires all right, title and interest, which the mortgagor held at the time that the mortgage was executed, as well as any right, title or interest acquired by the mortgagor subsequent to the execution of the mortgage.
    c. The mortgagor continues to have the right to possession of the property until after the expiration of the statutory redemption period.
    d. The Sheriff's Deed should be recorded within 20 days of the date of sale. If the Deed is not recorded within 20 days of the date of sale, it does not invalidate the sale; however, the redemption period does not begin to run until the date the deed is recorded.
    Michigan Foreclosure Statutory Redemption Period:

    1. For a mortgage on residential property not exceeding 4 units and not more than 3 acres in size, if the amount claimed to be due on the mortgage at the date of the notice of foreclosure is more than 66-2/3% of the original indebtedness secured by the mortgage, the redemption period is 6 months.
    2. If the property is abandoned as determined pursuant to the statute, the redemption period can be shortened to 30 days.
    3. In any other case, the redemption period is 1 year from the date of sale.
    4. The redemption price is an amount equal to the amount bid at the sale together with interest from the time of the sale, at the rate set forth in the mortgage.

    Paying of Taxes or Insurance During the Redemption Period: If after the Michigan foreclosure sale the purchaser pays taxes or hazard insurance on the property, that amount is added to the redemption amount, so long as an affidavit is recorded.
    Redemption:

    A purchaser's Deed is void if the mortgagor redeems the entire premises sold by paying the amount required within the applicable time limit.

    Payment must be made to the purchaser or the county register of deeds.
    Foreclosure Redemption period – Six months (in some instances it could be 1 year).
    Eviction - 30 Days:

    1. If the mortgagor does not redeem, and does not vacate the property, a summary proceedings action (eviction action) must be commenced in the district court.
    2. A complaint is filed with the district court and the occupants served.
    3. A court date is held, usually within 10 to 20 days.
    4. The former owners and any occupants are allowed 10 days from the date of the hearing (if a judgment is entered), to move from the premises (unless allowed more time by the mortgage company or its representative).

    5. If the former owner does not vacate by the required date, a Writ of Restitution is filed with the court and issued by the judge.

    6. A court officer goes out to the house and puts the mortgage company back into peaceful possession of the property by evicting the occupants and their possessions.

    Sending of a Notice of Default Letter (if required under the mortgage) – 30 days

    Publication – The notice of a Michigan foreclosure sale must be published once a week for four weeks in a newspaper of general circulation in the county where the land is situated. Within 15 days after the first publication, a true copy of the foreclosure notice must be posted in a conspicuous place on the premises described in the foreclosure notice. (with the sale taking place approximately 1 week after the end of publication (35 days) The sale must be a public sale, conducted between the hours of 9 o’clock "in the forenoon" and 4 o'clock in the afternoon.

    from http://www.foreclosureuniversity.com/studycenter/foreclosurelaws/michigan.php
  2. pnglv33

    pnglv33 LoanSafe Member

    Do you know if the same [regular/normal] laws apply for Michigan residents in foreclosure IF you enter into foreclosure during/under a forbearance agreement?
  3. Dan Bailey

    Dan Bailey Senior Member

    I believe they would be. Best bet is to contact an attorney in your state for legal questions though.
  4. pnglv33

    pnglv33 LoanSafe Member

    Thank You for your response!
  5. lakeowner

    lakeowner LoanSafe Member

    Dan,

    Such good information about MI foreclosure process. I am currently working on a modification plan with Citi. The investor is Freddie. Citi indicated until all documentation is recieved I could get a forecloser notice but as of today, march 22, Citimortgage confirmed it is not in foreclosure. However, they couldn't guarantee I wouldn't get one soon. Maybe they would "halt" foreclosure process while modification plan is being worked on.

    If I get a foreclosure notice in the next week or two do I have to be out in 30-60 days? I was under the assumption I had 6 months after the 30-60 days.

    After reading the foreclosure laws I may not have as much time as I think. I thought I would have at least 8 mo if the modification was denied (2 mo for foreclosure process and 6 mo to pay the price at auction ..

    uhh Ohhh...
  6. DHubie4

    DHubie4 LoanSafe Member

    Lakeowner....check the hamp guidelines handbook. you can find it on line. if you're with freddie, you should qualify under hamp. i think there is something in the guidebook that precludes them from proceeding with foreclosure until your modification is finalized etc.
  7. shayl475

    shayl475 LoanSafe Member

    You have a six month redemption period in Michigan after your house goes to a sheriff sale. I know this because I have five months left. If they postpone the sheriff sale then you will have longer. They can get it faster if you abandon the property. My Mom is in default with Citi and they have been very agressive with her. Make sure you respond if they leave a sticky on your door saying your house in abandoned.
  8. lemonjuice

    lemonjuice LoanSafe Member

    "During this time, the borrower can redeem the property by paying the winning bid amount and applicable costs."
    It sounds likes this means I could buy my house during the redemption period for less than I was mortgaged for... since no one in their right might would bid anything close to what we bought it for 5 years ago... IF the mortgage company didn't make a full credit bid. Or would "applicable costs" include the balance on the mortgage? There must be something I'm not getting here.
  9. OverandDone

    OverandDone LoanSafe Member


    Pretty sure you can buy it back for the amount bid plus the fees and the fees on mine in Michigan were about 4-5k. But a lot of the time they still do full credit bids unless its a credit union or small bank.
  10. lemonjuice

    lemonjuice LoanSafe Member

    Thanks for the reply. Interesting. My fingers are crossed for the full credit bid, but I'm considering all the angles anyway. If a person were to end up buying their house during the redemption period for way less than they were mortgaged for, do you suppose that would mean the mortgage company could still seek a deficiency judgment? This is going down the road way past what is likely to happen and into the realm of just interesting to ponder... the idea that someone could be in rough enough shape to lose their house to foreclosure, turn around and buy it back for closer to what it is actually worth, and then be sued for doing so. Finding the intricacies of this darkly fascinating.
  11. OverandDone

    OverandDone LoanSafe Member

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