Guide to the Foreclosure Process in Michigan
Many Michigan homeowners have been impacted severely by the economic downturn in America. Borrowers who are underwater or having trouble making their payments may want to know more about the foreclosure process in Michigan, including how long a Michigan foreclosure will take and what your options are for avoiding foreclosure in Michigan.
Step 1: Missing Payments
The first step that allows your lender to initiate foreclosure proceedings in Michigan is when you miss mortgage payments. Usually, a lender will give you a brief grace period, then begin tacking on late fees and other charges due to missing payments. While your lender is technically allowed to begin the foreclosure process in Michigan after you have missed just a single payment, in practice this almost never happens.
Typically, your mortgage lender wants you to get back on track—they make more money from your mortgage than from selling a foreclosed house. It's in both your and your lender's best interest to stop the foreclosure process in Michigan before it becomes messy and expensive or requires an auction. Talking to your lender at this point can give you several options. You may be able to stop the foreclosure process in Michigan by developing a payment plan or getting forbearance on your past-due payments.
Step 2: Notice of Sale
If you have not worked out an agreement with your lender, after a few months of missed payments you will be given a notice of sale. The notice of sale will be published for at least 28 days before the sale is actually held, and you will be able to find the notice in your local newspaper.
The notice will also be published on your property within 15 days of the first newspaper publication of the notice. These publishing requirements are set by the state and are non-negotiable (if your lender does not publish the notice of sale, you may be entitled to sue for damages).
You may still be able to negotiate with your lender during this time, and talking to a lawyer or financial counselor may also help you avoid the foreclosure process in Michigan at this point. You may wish to consider Chapter 13 bankruptcy or a short sale to avoid the problems associated with foreclosure.
Step 3: The Sale
If you do not work out anything with your lender by the time of the sale, your house will be sold at auction to the highest bidder. This stage of the foreclosure process in Michigan is not final, however: there is a single step remaining that may allow you to keep your home without being foreclosed upon.
Step 4: The Redemption Period
Usually, you will have six months in which to redeem your loan, which means that your lender will give you six months before you are evicted. You can use this time to sell your house, which can pay off the balance of your loan and avoid the foreclosure process.