Michigan Foreclosure Law Summary

Quick Facts
-  Judicial Foreclosure Available: Yes
-  Non-Judicial Foreclosure Available: Yes
-  Primary Security Instruments: Deed of Trust, Mortgage
-  Timeline: Typically 60 days
-  Right of Redemption: Yes
-  Deficiency Judgments Allowed: Varies
In Michigan, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure
In judicial foreclosure, a court decrees the amount of the borrowers debt and gives him or her a short time to pay. If the borrower fails to pay within that time, then the court will issue a notice of sale.

Non-Judicial Foreclosure
The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".
 
Power of Sale Foreclosure Guidelines
If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:
 
  1. A notice of sale must be published once a week for four (4) in a newspaper of general circulation in the county where the property is located. The notice must also be posted on the property at least fifteen (15) days after the first notice of sale is published.

    The notice must contain the borrower and lenders name, a description of the property, the terms of the sale and the time, place and date of the sale.
     
  2. The sale must be made at public auction to the highest bidder. The trustee or the sheriff of the county, if different, may conduct the sale between the hours of 9:00 am and 4:00 pm on the date specified in the notice of sale.

    The sale may be postponed by posting a notice at the time and place where the sale was to originally be held. If the postponement is for more than one week, it must also be published in the manner as the original notice of sale was given.
Michigan foreclosures are primarily handled out of court. The foreclosure process can take 3-14 months depending on the length of the redemption period. The typical foreclosure takes about eight months.

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.

 
 

 

Courtesy of Stopforclosure.com