Understanding foreclosure is an important kind of knowledge for any distressed homeowner. This article examines the foreclosure process in Michigan.

When a Michigan homeowner stops making mortgage payments, he or she can go into foreclosure. Understanding foreclosure in Michigan means knowing the specific laws which govern real estate in the wolverine state.

In general, the foreclosure process is simple. A homeowner misses payments. Notice is given to her that a foreclosure is in process. She then has time to cure the debt. At the end of that time, there is a court proceeding or non-judicial remedy. The house is ordered sold and a sheriff's auction is held. There may be a short redemption period before the process is over.

How does this apply to Michigan specifically?

For instance, Michigan uses both judicial and non-judicial foreclosure methods.

Judicial foreclosure means that the lender goes to court and gets an order for the home to be sold. The court then orders that the home be sold six months hence. If the homeowner is able to arrange other financing, he can save his house. If not, the property is sold at auction by the circuit court commissioner.

The other option is foreclosure by advertisement. If the mortgage includes what is known as a "power of sale" clause, non-payment of any month's mortgage due can trigger foreclosure. The lender publishes a notice once a week for four weeks in a general circulation newspaper and must also post the Notice in a conspicuous place on the property.

The sale is conducted at the courthouse by a sworn sheriff and must be conducted sometime between 9 a.m. and 4 p.m.

The property is sold to the highest bidder and the new deed must be recorded within 20 days of the auction.

If the balance of the loan is 2/3 or less of the original mortgage, the homeowner has one year to redeem the property. The homeowner has full use of the property for that year. If the balance is over 2/3 of the loan, the homeowner only has one month. If the homeowner abandons the property, he forfeits his rights under this clause.

Understanding foreclosure in Michigan is a matter of knowing the general process for all states and the specific application of the process in Michigan.

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