Michigan foreclosure law

Lenders in Michigan can foreclose on mortgages and deeds of trust in default. Both the judicial and non-judicial foreclosure processes are allowed, depending on the security instruments involved. The average wait time for a Michigan foreclosure is 60 days.

Judicial foreclosure
The judicial foreclosure process is followed when the mortgage does not contain a Power of Sale clause, which would allow the lender to sell the home as payment in case the borrower defaults. Without the clause, the lender has to take the case to court in order to foreclose.

Once the court confirms the default, it will decree the amount of the debt and give the borrower a short time frame to bring the mortgage current. If this deadline isn’t met, the court issues a Notice of Sale and the home is put up for public auction.

Non-judicial foreclosure
If the Power of Sale clause exists in the contract, the non-judicial foreclosure process is followed. The authority to sell may be used by the lender himself or an appointed representative called the trustee. The terms specified in the contract are usually followed. If the contract doesn’t contain sufficient information, the foreclosure will proceed as follows:

First, a Notice of Sale is circulated in a local newspaper once a week for at least four consecutive weeks. At least 15 days after the first ad, the same notice will be posted on the property in default. The notice must contain the following information:

-the lender’s name;
-the borrower’s name;
-a description of the home or property;
-the terms of the foreclosure sale; and
-the date, time, and place of the sale

The sale is carried out through a public auction, where the property is awarded to the highest bidder. It may be conducted by the county sheriff or the lender’s trustee, and is usually held between 9am and 4pm on the specified date. If the sale is postponed, a notice must be posted on the original venue. For postponements of more than one week, the notice must be filed and published in the same manner as the first.

Right of redemption and deficiency claims
After the sale, the borrower is given a specific time frame within which he or she can redeem the property. This is called the Right of Redemption and is usually done by paying the home’s foreclosure sale price, plus interest. In some cases, the lender can also file a deficiency suit, which is a personal claim against the borrower that covers the balance not paid by the foreclosure sale.

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