Paul J. Raine, PLLC
Exceptional legal representation, integrity and unparalleled personal service.
Home
News
About Us
Attorney profile
Michigan Foreclosures
Mortgage Foreclosures
Foreclosure Seminars
Deficiency Judgments
Short Sales and loan mods
Deed-in-lieu
Landlord-Tenant Issues
ILLEGAL Lockouts
Contact Us
Site Map
Michigan Mortgage Foreclosure FAQ
Homeowners in Michigan have many questions and concerns during the foreclosure process. Following foreclosure, some banks also seek a Deficiency Judgment.  Hopefully the information below will answer many of the questions you may have regarding mortgage foreclosures in Michigan.  If you have further questions, please call us at 248-680-9522 or send e-mail to: paul@rainelaw.com
 

Q: How can the bank foreclose on my home without a court hearing?
A: Michigan is a "foreclosure by advertisement" state. There is specific language in your mortgage called a "power of sale" clause. As long as the power of sale language is in your mortgage, the bank can foreclose without the need for a court hearing. If there is no power of sale clause in your mortgage, the bank would have to file a judicial foreclosure, which would involve a lawsuit and a court hearing.
 
Usually banks will wait until you are in default and behind on your mortgage payments for at least 90 days before they resort to foreclosure. They could foreclose immediately once you miss a single payment, but banks typically do not want your property. They will call and send you letters in attempts to help you resolve your defaulted loan. However, the bank cannot allow you to fall too far behind because they have to report back to investors as to why you have not been making payments. If the bank determines that you are unable to save your home, they will refer the account to a foreclosing attorney.

The bank's attorney will foreclose by advertisement by publishing a notice in a paper in your county for 4 consecutive weeks. Within 15 days of the first week of publication, a notice must be posted on the property in a conspicuous place. At the end of the 4 weeks of publication, a Sheriff's sale is scheduled at the county courthouse.
Q: What is a Sheriff's Sale?
A: When a home is scheduled for a mortgage foreclosure, the foreclosure auction takes place at the county seat and is called a Sheriff's sale. A County Sheriff's deputy conducts the auction. The deputy will read the description of each property and what the minimum bid must be. If there are investors willing to pay more than the minimum bid, then they must pay the entire amount of the winning bid that day to purchase the home. Otherwise, if there are no bidders, the property will typically revert back to the bank for the minimum bid, which is typically the amount still owing on the mortgage. Once the foreclosure sale takes place, the prior mortgage is extinguished and a Sheriff's Deed is issued for the property. Regardless of whether the bank or an investor takes the property at a Sheriff's sale, the new owner must wait until the redemption period expires before they can take possession of the home.
Q: How long is the redemption period in Michigan?
A: The process can vary depending upon the acreage of your property and other factors, but most residents of single-family homes in Michigan enjoy a 6-month redemption period after a Sheriff's Sale. If your property is over 3 acres, then you may have a 12-month redemption period.
Q: How can I redeem my property?
A: You can pay the redemption amount at the Register of deeds office in the county where you live. The redemption amount will be the sale price from the winning bid of the Sheriff's sale plus daily interest through the date of redemption. The interest rate is based on the rate of interest of the mortgage that was foreclosed. You can calculate the amount yourself, or you can have the law firm that foreclosed on your property calculate the amount for you (for a fee).
Q: What happens if I don't redeem my property?
A: If the redemption period expires and you haven't redeemed, then you no longer have rights in the property. You can expect that soon after the expiration of the redemption period, the bank will take steps to have you evicted from your home. However, the bank cannot automatically evict you until there is an eviction hearing in District Court. The bank will likely file an eviction lawsuit in District Court. You will receive a notice of the hearing in the mail and a notice will be served to you or tacked to your front door. If you fail to attend the hearing, the bank's attorney will obtain a default judgment and you will have only 10 days to move. If you appear in court, often the bank will give a bit more time to move, but they are usually unwilling to give you more than 30 days from the date of the hearing. The bank may also send a realtor to your home to try and negotiate a "Cash-for-Keys" agreement (see below).
Q: What is a Cash-for-Keys agreement?
A: The bank would like to sell the property as soon as possible. They would like you to remove all of your belongings and leave the home in a "broom-clean" condition. If they can negotiate a move-out date with you, they sometimes will offer you a small amount of cash as an incentive to make the transition smooth. Under such agreements, the realtor will inspect the home and give you a check in exchange for the keys to the home. The bank can save money because they may not have to file an eviction lawsuit. They also avoid an eviction, which can be costly when former tenants leave lots of trash behind. The cash offered can vary depending on your paricular circumstances. The bank will ask you to complete a W-9 form because the amount they give you is taxable.
Q: How soon will I be evicted?
A: Once the redemption period expires, the bank must file an eviction lawsuit for termination of tenancy. You will receive a summons and complaint in the mail. The summons will have a date for a court hearing. Michigan law provides that the bank cannot take possession of your property until 10 days after the date of the hearing. If you show up for the hearing, the bank's attorney may give you a little more time to move. If you fail to appear for the court hearing, the bank will win "by default" because you did not appear. After the 10 days expires, the bank has a right to send in an order of eviction to the court. Once the judge signs the order of eviction, you will be at risk of having a court bailiff or sheriff's deputy visit your house to supervise an eviction. Sometimes the court officer will give you a short 24-48 hour notice of an impending eviction. On the day of the eviction, the court officer will have a crew of men to help remove any belongings that you haven't already removed. They will set out your belongings at the curb or in a dumpster. They will then secure the property to prevent tresspassers from entering the property. The bank will then utilize the services of a realtor to sell the property.