I am often asked, what is the foreclosure process in the State of Michigan? Although similarities exist, each state has it’s own foreclosure law. Michigan foreclosures are handled primarily out of court. The foreclosure process itself can take 3-14 months dependent upon the length of the redemption period. Foreclosures typically take about eight months.

In the foreclosure process the initial stage is the pre-foreclosure period. Court foreclosures are permitted under Michigan law; however, most mortgages contain a clause enabling a lender to sell a property out of court once a mortgagor defaults. While Michigan law does not require that a lender send out notice to the borrower before scheduling a foreclosure sale, the mortgage may require notification. The borrower’s right to stop the foreclosure by paying off the default is also dictated by the mortgage.

The second stage in the process is the notice of sale or auction. The foreclosure sale usually happens about two months after the foreclosure process is started. A notice of sale is posted in a local publication once a week for four weeks and the sale may not be less than 28 days from the date of the first publication The notice is also posted on he 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.

The sheriff or trustee conducts the public auction between 9:00 am and 4:00 pm, usually at the county courthouse. The public is allowed to 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.

Bill Nabers CRS, GRI

Associate Broker