Can I reclaim my Michigan property if it goes into foreclosure?

If you lose your house to foreclosure in Michigan, you have a specific amount of time to redeem (repurchase) it.

Question

My house in Michigan was sold at a foreclosure auction last week, but I still reside there and am unsure whether I am required to quit. Also, if at all feasible, I’d prefer to retain the property. Is there any possibility for me to reclaim the home now that the foreclosure sale has occurred?

Answer

You don’t have to leave the house just yet, and you can get it back. Foreclosed homeowners in Michigan have a specified length of time following a foreclosure sale to repurchase or “redeem” their house. Depending on your circumstances, you will be given a one-month, six-month, or one-year redemption period during which you will be able to reside in the house. This is detailed further down.

To redeem, you must locate another source of financing and refund the purchaser—the person or corporation that purchased the house at the foreclosure auction—for the entire amount paid at the sale, plus several extra expenses.

When Can You Redeem Your Home Following a Michigan Foreclosure Sale

The majority of home foreclosures in Michigan are nonjudicial, which means they take occur without the oversight of a court. The redemption time for the residence after the foreclosure sale is as follows:

If you owed more than two-thirds of the initial loan amount, you had six months; if you owed less than two-thirds of the original loan amount, you had one year. (See Michigan Comp. Laws 600.3240(8),(12).) (The average homeowner receives six months.)

If you abandon (move out), the redemption time is 30 days after the sale or until the mandatory notification that the lender deems the premises abandoned expires, whichever comes first. (See Michigan Comp. Laws 600.3240(10).)

How Much Will You Have to Pay to Reclaim Your Home?

To redeem, you must refund the purchaser for the whole amount paid at the sale, plus interest and any charges incurred after the sale, such as:

Insurance premiums, homeowners’ association assessments, and property taxes are all covered under Michigan Comp. Laws 600.3240(1),(4).

How to Determine the Duration of the Redemption Period

Check the notice of sale to find out how lengthy the redemption time is in your specific circumstance. Michigan Comp. Laws 600.3212.) (This is the foreclosure notice that was published in the newspaper and put on your property as part of the foreclosure procedure.

If you do not redeem the home during the redemption time, you will not be able to receive it back this way again. (Learn more about the redemption right in general.)

You may remain in your home throughout the redemption period.

During the redemption time, you may reside in the property. However, Michigan law requires that you enable the purchaser who purchased the property at the foreclosure sale to view both the inside and outside of the home during this period. (See Michigan Comp. Laws 600.3238.)

The buyer of the house may initiate eviction proceedings if you:

refuse to allow the buyer to examine the house or cause damage to the house (or if damage to the home is imminent). (See Michigan Comp. Laws 600.3238.)

The purchaser from the foreclosure sale is required to provide you with an initial notice including specified details, such as the purchaser’s name, as well as a notification 72 hours before examining the inside of the property. The purchaser is also limited to a certain number of interior evaluations under the legislation. If you get such notification and intend to leave the property before the redemption period ends, you must notify the purchaser of your plans.

You may attempt to sell the property during the redemption period.

If you decide not to retain the house, you may sell it within the redemption time. You retain the difference if you sell it for more than the redemption amount owing.

Where Can I Find Michigan’s Redemption Laws?

In Michigan, refer to Chapter 600, Act 236 of 1961 (236-1961-32) of the Michigan Compiled Laws to see the legislation that outline your entitlement to redeem the house.