How Does Foreclosure Work Here In Michigan?

In Michigan, lenders can foreclose on mortgages that have gone into default utilizing either non-judicial or , less frequently, judicial means. Although Michigan law does permit judicial foreclosure proceedings, most are handled out of court. In a judicial foreclosure the court decides the amount due to the lender and the homeowner is given a specific amount of time to pay the decree before the court issues a notice of sale. A non-judicial foreclosure can be more complex.

Most mortgage agreements contain a power of sale clause which enables the lender to liquidate the property out of court once the mortgage has gone into default status. In Michigan, the lender is not required under state law to send a default notice upon the commencement of foreclosure proceedings, although there could be a provision for such a notice in the original mortgage agreement. If a mortgage agreement or a deed of trust outlines specific procedures that are to be followed in the case of a default, they must be followed by the lender to the letter. If the agreement or deed does not contain specific language defining the provisions under which a non-judicial foreclosure proceeding would be handled, the steps that must be followed are very specific according to law.

A notice of sale must be published once a week for four consecutive weeks in a newspaper of general circulation in the county in which the proceeding is to be carried out. Additionally, a notice must be posted at the physical address of the home within 15 days of the first published notice. The notices must contain the time, date and location of the sale and describe the property and the terms of the sale, as well as identifying the borrower and the lender by name. The sale must be held at public auction and the property sold to the highest bidder. The sale can be postponed for up to a week or longer provided proper notice is given of the postponement prior to the original sale.

It is a good idea to read your mortgage agreement to determine what additional provisions and restrictions are granted in the document in addition to having a good knowledge of Michigan state law regarding foreclosure proceedings. There are many reputable services that can provide valuable assistance in navigating your mortgage agreement and foreclosure proceedings in dealing with your lender to save your home.