- Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: Yes
- Primary Security Instruments: Deed of Trust,
Mortgage
- Timeline: Typically 60 days
- Right of Redemption: Yes
- Deficiency Judgments Allowed: Varies
In Michigan, lenders may foreclose on deeds of trusts or
mortgages in default using either a judicial or non-judicial foreclosure process.
Judicial Foreclosure
In judicial foreclosure, a court decrees the amount of the
borrowers debt and gives him or her a short time to pay. If the borrower fails
to pay within that time, then the court will issue a notice of sale.
Non-Judicial Foreclosure
The non-judicial process of foreclosure is used when a power
of sale clause exists in a mortgage or deed of trust. A "power of sale" clause
is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes
the sale of property to pay off the balance on a loan in the event of the
their default. In deeds of trust or mortgages where a power of sale exists,
the power given to the lender to sell the property may be executed by the
lender or their representative, typically referred to as the trustee. Regulations
for this type of foreclosure process are outlined below in the "Power of Sale
Foreclosure Guidelines".
Power of Sale Foreclosure Guidelines
If the deed of trust or mortgage contains a power of sale
clause and specifies the time, place and terms of sale, then the specified
procedure must be followed. Otherwise, the non-judicial power of sale foreclosure
is carried out as follows:
- A notice of sale must be published once a week for four
(4) in a newspaper of general circulation in the county where the property
is located. The notice must also be posted on the property at least fifteen
(15) days after the first notice of sale is published.
- The notice must contain the borrower and lenders name,
a description of the property, the terms of the sale and the time, place
and date of the sale.
- The sale must be made at public auction to the highest
bidder. The trustee or the sheriff of the county, if different, may conduct
the sale between the hours of 9:00 am and 4:00 pm on the date specified
in the notice of sale.
- The sale may be postponed by posting a notice at the
time and place where the sale was to originally be held. If the postponement
is for more than one week, it must also be published in the manner as the
original notice of sale was given.
More information on Michigan foreclosure laws.
