How does foreclosure work in Michigan, and how long does it take?

Judicial or non-judicial?

Michigan allows both. Under MCL 600.3101, the circuit court has jurisdiction to foreclose mortgages and land contracts. But most mortgages contain a power of sale and are foreclosed by advertisement, with no lawsuit (MCL 600.3201). The lender may use that route only if (MCL 600.3204(1)):

• the borrower is in default, so the power of sale is operative;
• no lawsuit to recover the debt is pending, unless it has been dropped or an execution came back unsatisfied;
• the mortgage is properly recorded;
• the foreclosing party owns the debt (or an interest in it) or is the servicing agent.

If the foreclosing party is not the original lender, the recorded chain of assignments must be in place before the sale date. Mortgages held by the Michigan State Housing Development Authority are outside these procedures (MCL 600.3201).

The steps, in order

1. Missed payments. Under federal rules, “your servicer can’t start the foreclosure process until at least 120 days after you become delinquent,” except in rare cases (CFPB).
2. Published notice. The notice runs once a week for 4 successive weeks in a newspaper published in the county. Within 15 days after the first publication, a copy must be posted on the property (MCL 600.3208).
3. What the notice says. It must give the amount claimed, the mortgage dates, the property description, the length of the redemption period, the name and phone number of the foreclosing party’s attorney, and a notice for military service members. It also warns that the highest bidder does not automatically get free and clear ownership (MCL 600.3212).
4. The sale. A public sale between 9 a.m. and 4 p.m. at the place the circuit court sits in the county, conducted by the sheriff, undersheriff or a deputy (MCL 600.3216). The foreclosing party can adjourn the sale; adjournments longer than one week must be published (MCL 600.3220).
5. Redemption. The borrower can get the home back by paying the required amount within the period below (MCL 600.3240).
6. After redemption ends. The sheriff’s deed becomes operative and vests the borrower’s title in the buyer (MCL 600.3236). A former owner who stays can face summary proceedings for possession under chapter 57 of the Revised Judicature Act (see MCL 600.3238(6)).

Right of redemption

To redeem, the borrower pays the bid price, interest from the sale date at the mortgage rate, the sheriff’s fee, and a $5 custody fee if paying through the register of deeds. If the buyer has paid property taxes, association assessments or insurance, those add to the price when proper affidavits are filed (MCL 600.3240(2), (4)). The buyer must state the exact redemption amount in an affidavit recorded with the deed.

During redemption, the buyer may inspect the property on notice. The borrower can be held liable for physical damage beyond normal wear and tear, and a borrower who plans to move out must give 10 days’ notice if the buyer has sent the statutory notice (MCL 600.3238, 600.3278).

How long does it take?

Illustration only: a home with a missed payment on day 0 can’t enter foreclosure before day 120. Four weekly notices then run before the sale, followed by the 6-month redemption period. That adds up to roughly eleven months from the first missed payment, before any delays or loss-mitigation review. The statute sets no deadline for how quickly a lender must move.

Deficiency judgments

A lender that buys the home at the sale can still sue the borrower for a deficiency. In that suit, the borrower may show that the property “was fairly worth the amount of the debt” at the time of sale, or that the bid was “substantially less than its true value.” That showing defeats the deficiency claim in whole or part (MCL 600.3280). This applies to sales by advertisement where the lender took title. We did not find a limit on the time to sue in the sections we read; ask an attorney.

Help for homeowners in default

• Federal review rights. If the servicer receives a complete loss-mitigation application “more than 37 days before your scheduled foreclosure sale,” it must review it (CFPB).
• Free counseling. HUD funds free or very low-cost housing counseling and counselors can negotiate with your lender. Call (800) 569-4287 (HUD).
• State help. The Michigan State Housing Development Authority runs foreclosure-prevention programs, but we could not open its website to read current offerings, so check michigan.gov/mshda directly.

Questions about your rights in a specific case are best put to a Michigan attorney; see our real estate attorney guide. If you are buying at a sale, read our seller disclosure guide first: foreclosure sales are exempt from the seller disclosure form.