Michigan Foreclosure Recovery Key Terms

Learn about some of the key terms associated with Michigan foreclosure recovery

By Jason Wood

When it comes to Michigan foreclosure recovery, there are many steps to the process that a defaulted borrower, lender or bidder should be aware of so that they are not taken by surprise. Things such as the process of how the home is foreclosed upon to the redemption period for the defaulted borrower are different in Michigan in comparison to many other states.

Take the time to learn about some of the key terms associated with the recovery process. Here are some of those terms along with some resources to help get you started.

Michigan foreclosure statutory redemption period

The Michigan Foreclosure Statutory Redemption Period refers to the point in time where a defaulted borrower may redeem their property by paying the defaulted amount due. Depending on the amount of default and the amount of equity, the recovery period differs.
Try: Visit Foreclosure University for further information on the Michigan Foreclosure Statutory Redemption Period and how it relates to the property in question.

Notice of sale

The notice of sale is drafted by the lender and required to be given to the defaulted borrower. This starts the foreclosure process in a non-judicial foreclosure. This states the amount due that the defaulted borrower must pay and the time line of that redemption process.
Try: Visit the website for Real Estate Zing for more information on how the notice of sale affects the redemption period within the state of Michigan.

Right to redemption

The right to redemption refers to the right that a defaulted borrower may have to reclaim their property in the state of Michigan. While the specific rules vary depending on the date of the mortgage and type of lien against the property, a defaulted owner may have up to one year to pay any monies owed plus interest and penalties to reclaim their property.
Try: Visit the website for Foreclosure Listings.com for more information on the right to redemption that the defaulted borrower maintains for a certain amount of time after the foreclosure.

Abandonment

Abandonment, in terms of Michigan foreclosure law, means that the lender has inspected the home or property in default and has ascertained that no one is living on the premises. A letter must then be sent to the last known address of the defaulted borrower informing them of the intent to foreclose. When dealing with Michigan foreclosure recovery this is quite important because if a defaulted borrower does not respond to the letter within 30 days, they lose their right to redemption and their ability to recover that property.
Try: Visit the website for Advantage Mitigation for a further explanation of abandonment and how it affects a defaulted borrower’s right to redemption.

Tax forfeiture sale

A tax forfeiture sale refers to a sale of property through the tax foreclosure process. If a homeowner has not paid their property taxes, then the county may impose a sale. In terms of Michigan foreclosure recovery, a Chapter 13 bankruptcy may be filed in order to stop the tax forfeiture sale proceeding and work out a reorganization and payment plan.
Try: Visit the website for Acclaim Legal Services for further information on how a tax forfeiture sale operates within the state of Michigan.

Deficiency judgment

A deficiency judgment refers to an additional judgment made against the defaulted borrower by the lender after the auction of the property. The lender may try to seek additional payment between the cost of the mortgage and the cost of the sale. However, in terms of Michigan recovery, if the deficiency judgment is filed during the recovery period, the defaulted borrower may seek to extend the redemption period through court proceedings.
Try: Visit the website for Real Estate Law Michigan for further information on the deficiency judgment and how it operates within the state of Michigan.