Understanding the foreclosure timeline in Michigan
Avoid unnecessary stress.
According to the CoreLogic’s National Foreclosure Report, as of February 2016 roughly 434,000 homes in the United States were in some phase of foreclosure. In February 2015, the number of homes was 571,000, a decrease of 23.9 percent. Michigan was one of five states with the highest number of completed foreclosures (49,000) during past 12 months. Although the number of foreclosures has declined, there are still consumers who may face foreclosure and understanding the foreclosure timeline may help you to alleviate some of the stress of the unknown.
Michigan State Housing Development Authority (MSHDA) breaks down Michigan’s Foreclosure Timeline for mortgages as follows:
- Day 2-36
- Payment due on the first and considered delinquent on the second. Late charges assessed. Lender/Servicer must make live contact with the homeowner about options.
- Day 45
- Lender/Servicer must assign a contact to the homeowner and provide written notification of delinquency and loss mitigation options.
- During this time, work with the lender to obtain loan modification or other loss mitigation option and if your lender allows partial payment – make the payment.
- Day 121
- If a default resolution is unsuccessful or a hardship application not received, the lender can begin the foreclosure process. A Notice of foreclosure is recorded at local county Register of Deeds. A Sheriff Sale date is scheduled and is published in a county newspaper for four weeks and the notice of sale date is posted on the property within two weeks of first publication.
- Sheriff sale held: The “Sheriff’s Deed” lists the last date the property can be redeemed. Up until the sheriff sale has occurred, the homeowner may still submit a loss mitigation application.
- Six months
- The homeowner can live in the property, usually for six months, and is not required to make payments. Can buy back the property for the amount of bid + interest + fees. Can work with the purchaser to sell or obtain a deed-in-lieu of foreclosure. Must maintain the property, utilities, renter’s insurance, and allow the purchaser to inspect the property.
- Redemption period and inspection
- Home Inspections: If an inspection is unreasonably refused or if damage to the property is imminent or has occurred, the purchaser of the property at the sheriff sale may immediately begin eviction proceedings to seek possession and terminate the homeowner’s redemption period. Once you move out, the purchaser (normally the lender) may take action to gain possession of the abandoned property.
- Eviction: At the end of the redemption period if you have not already vacated the home you will receive a summons to appear in court. At the hearing, a date is set for the sheriff to physically remove you from the property, if necessary.
Facing foreclosure is a stressful time but understanding the foreclosure timeline may help reduce some of the stress. It is important to be realistic when facing foreclosure and sell your home if you cannot afford to keep it. You may qualify for up to $30,000 in delinquent mortgage and/or property tax assistance from Step Forward Michigan. Homeowners can apply directly at the Step Forward Michigan website or by calling 866-946-7432. Additionally, you can contact an MSHDA approved agency such as Michigan State University Extension for free assistance.
Michigan State University Extension has released the Starting Over After Foreclosure toolkit for homeowners who are experiencing or have previously experienced foreclosure. This toolkit will equip these individuals and families with tools to help them recover their financial stability, in the case that a recovery of their home is not possible. The toolkit is available to download free at the MI Money Health website.