Foreclosures In Michigan - Understanding The Process

To better understand foreclosures in Michigan, one must learn the basics of home buying in the state. Most of the home loans in the state are secured through a mortgage, or a deed of trust as it is called in other places. The mortgage is essentially a promissory note where the borrowers promise to make monthly payments or face penalties, including the repossession of the property, once they fail on their obligation. The mortgage is a filed with the county records office and can be accessed by anyone. Some counties even have a website where these documents are posted.

The Foreclosure Process

Default is the term more commonly used when the borrowers fail to meet their monthly obligations. When the borrower is in default for three consecutive months or more, the lender can decide on starting the process of foreclosure. This signals the start of the process for foreclosures in Michigan. The foreclosure notice is then sent to the borrower and published in local news papers for a total of five succeeding weeks. The notice includes a legal description of the property, the total amount that is in default and the schedule of the Sheriffs Sale.

A lot of times the sheriffs sale is unsuccessful, especially if the cost of the loan has overtaken the real value of the property. When this occurs, the home becomes the official property of the mortgage lender, usually a bank. On the other hand, if there is a winning bidder for the home, they are advised that the original homeowners have up to six months to attempt to redeem their property. At the conclusion of the redemption time, the home is then truly the property of the new buyers.

In some cases, the former owners of the home refuse to leave their property voluntarily and an eviction may need to be carried out. The notice of eviction usually runs for a total of 30 days.

If for some reason they are still there even after the redemption period is up, they have to be evicted within 30 days. In some cases, it can take up to ten months for at the longest before the new owners can move into one of the foreclosures in Michigan. This is the reason why some lenders go what is known as 'cash for keys', the offer of cash to the previous owner for them to vacate the property.