Foreclosure by Advertisement

The primary method of foreclosure in Michigan involves what is known as a “non-judicial” foreclosure. This method does not involve the courts. This type of foreclosure process is also called “foreclosure by advertisement” because it requires public notices to be posted on the property and in the newspaper.
 

In accordance with the new Michigan state law (effective July 5, 2009) requiring pre-foreclosure negotiations between servicers and homeowners, if a mortgage servicer is not willing to work with a homeowner, the owner has the right to demand a judicial foreclosure through the courts.  Learn more about the Michigan Foreclosure by Advertising Statute.

Foreclosure Process-Is it too late?

It is never too early to seek out information and tips to prevent foreclosure.
The sooner you contact your lender or a housing counselor, the more options you may have. Learn more by clicking on the stages below:
 

First Month Missed Payment

• Loan is in default (late) if the monthly payment is not made in 30 days.
• Lender may send a notice of delinquency and start calling you.
• Late fees begin to accrue.
• During this time, if you can make a partial payment – make it.
• You may be able to make arrangements for payment with your lender - however, many lenders will not do so until 90 days of delinquency.
• Begin communication with your lender.
   

Second Month Missed Payment

• You may receive phone calls and/or letters from collections department.  Lenders may accept one payment but will put pressure on borrower for both payments.  After the second month ends, partial payments are generally not accepted.
• You may be able to make arrangements for payment with your lender - however, many lenders will not do so until 90 days of delinquency.
• Late fees continue to accrue.
• Begin communication with your lender.
   

Third Month Missed Payment

• Lender may send a "Demand Letter" or "Notice to Accelerate." The homeowner generally has 30 days to bring the mortgage current.
• The homeowner may still be able to make arrangements with the lender. This could be the first opportunity for the homeowner to do so if the lender required 90 days delinquency.
• This is the last chance to catch up and go back to mortgage payment schedule.
• If the mortgage is not made current, foreclosure proceedings are started, including public notification at the local courthouse, in the local paper and posted at your house.
   

Fourth Month - Sherriff Sale Date

• Lender will contact attorneys to schedule a Sheriff's Sale. The sale date will be scheduled four to six weeks after the attorneys receive the file. 
• Under Michigan law, advertisement for the Sheriff’s Sale must be made for four successive weeks in a newspaper local to the property. Notice must be posted on the property within 15 days of the first publication.
• When the sale date is scheduled, you will receive a notice by mail AND a notice will be taped to your door.
• You DO NOT HAVE TO MOVE at this time.
• The home is normally auctioned for the amount of the loan plus missed payments, accrued interest, late fees and attorney fees. To get property back after the Sheriff Sale, you must pay the total amount due within the redemption period (usually 6 months).
• The purchaser at the Sheriff's Sale is almost always the original lender.
   

During Redemption Period - After the Sheriff's Sale is Complete

• You DO NOT HAVE TO MOVE until the redemption period is complete - usually six months. If you know you will have to move, use this time to save and look for a new place to live.
• If you leave the home prior to the end of the redemption period, you must contact your lender. You are still legally responsible for the property and can be held responsible for property issues. If you vacate the home and contact the lender, they can accelerate or shorten the redemption period to complete the foreclosure process for you.
• The homeowner is entitled to a redemption period (usually six months) to recover the property from the purchaser (often the original lender). To redeem your property, you must pay the total amount due, including the amount of the loan plus missed payments, accrued interest, late fees and attorney fees.
• At the end of the redemption period, the homeowner loses the lost legal title and must give up possession of the home. The purchaser now has legal title to the home.
   

After the Redemption Period - Eviction

• At end of the Redemption Period, you will get an eviction notice and a legal notice of an eviction action in court.  You can go to court to fight the eviction.
• After the eviction date, the sheriff can move your belongings to the curb.