Michigan Foreclosure Process Timeline
In Michigan the two types of foreclosures are by court action and the more common foreclosure by advertisement. The foreclosure process can take anywhere from 6 months to 12 months or longer depending if the real estate property is greater than 3 acres or greater than 4 units. Most lenders will first attempt to work out a payment plan or loan modification to keep the family in the home if they have current income. We have detailed the foreclosure process including a timeline of events and legal steps that a lender will follow.
Most mortgage payments are due on the first of each month. When the mortgage payment is over 15 days past due the lender will access a late fee penalty and send a late notice to the homeowner. The late notice will usually be sent out after 15 days late but would fluctuate based on the lender.
If the mortgage payment is over 30 days late the lender can refer the account to a collections agency. At this point the lender will notify the credit bureaus of the late payment. The collections agency will contact the homeowner and attempt to collect the past due amount plus penalties and late fees.
Notice of Default
The notice of default of mortgage is the beginning of the formal foreclosure process. It begins with the lender completing paperwork for an official notice of mortgage default filed with the court. The notice of default must be attached in a conspicuous location to the home. Foreclosure by advertisement requires the lender to advertise the foreclosure once a week over 4 weeks. A notice of sale must also be posted on the property within 15 days of the first published notice.
The lender will record a formal notice of foreclosure at the local courthouse and publish details of the debt in the local newspaper. Foreclosure proceedings can start any time after the acceleration notice is sent, but usually happens when the loan is 90 or more days past due. This is when attorney fees become a significant part of the fees due. On average attorney fees will add about $2,000 to your total amount due.
The sale must be conducted between the hours of 9am and 4pm at the courthouse, on the date specified in the public notice, by the sheriff and sold to the highest bidder. If the property sells for less than the mortgage amount the lender has the right to pursue a deficiency judgment to recoup the difference from the borrower. Upon completion of auction sale the Sheriff will issue a deed to the highest bidder.
The redemption period in Michigan is usually six months. In situations where the property has more than four units, greater than 3 acres and has not been abandoned the redemption period is 12 months. If the property is abandoned by the borrower the redemption is 30 days.
In order to redeem the property at this point the borrower must pay the amount of the sheriff sale, accrued interest, court costs, attorney fees, title and appraisal fees. If the Sheriff deed holder paid taxes or insurance after the sheriff sale, the mortgagor must pay those fees as well.
If the homeowner has not redeemed the property nor vacated the property then eviction proceedings will surely follow. The lender will file eviction proceedings with the court and a hearing will be scheduled. If the court has entered judgment in favor of eviction, the homeowner will have 10 days to vacate the property.
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