Michigan has been one of the hardest-hit states during the housing crisis and many homeowners still face foreclosure in the wake of the economic recession. To save your home, you must prepare yourself with the most reliable and accurate information. The more you know about the foreclosure process and your options, the more likely you’ll be to able save your home. Refer to our mortgage foreclosure fact sheet or our tax foreclosure fact sheet to get started. For additional resources click here.
When facing foreclosure, you have three options:
The options that you have available to you depend upon your financial situation, as well as where you’re at on the foreclosure timeline. The Michigan State Housing Development Authority (MSHDA) has a helpful timeline.
What is the timeline for most mortgage foreclosures?
First Month Missed Payment:
- Your lender or mortgage company will contact you by phone or in person.
- You should begin discussions on loan modification with your lender.
Second Month Missed Payment:
- You will receive written notification of your delinquent payments
- Contact your lender to begin or continue discussions for resolution options
Third Month Missed Payment:
- You may receive a “Demand Letter” or “Notice to Accelerate” stating that you have 30 days to bring the mortgage current or foreclosure will begin.
Fourth Month Missed Payment:
- If you have not paid the full amount or worked out a loan modification or some other arrangement then your file will be referred to the lender’s attorneys for foreclosure.
- You will now incur all attorney fees as part of your delinquency.
Sheriff Sale Date:
- The attorney schedules a Sheriff Sale, which is the actual date of foreclosure. You will be notified of this date by a notice posted somewhere on your property. It can be on the door, fence post or tree in the yard.
- This is NOT a move-out date.
- You have up until the date of the Sheriff Sale to work out a modification or other arrangement with the lender or mortgage company or to pay the total amount owed (reinstatement amount).
After the Sheriff Sale:
- The Redemption Period begins immediately after the Sheriff Sale.
- Most of the time, it will be six months.
- The purchaser of the home at Sheriff Sale has the right to inspect the home –interior and exterior – with proper notification.
- Failure to allow the above inspection can lead to an eviction from the property before the end of the redemption period.
During the redemption period, you have three options:
- Raise enough money to get the property back by getting a new mortgage. This includes paying off the mortgage, interest, late fees, court costs, attorney fees, title, appraisal fees, taxes, and insurance.
Sell the property at a price that will allow you to pay everything listed above, or, in the case of a short sale, get permission from your lender to sell the property for less than what you owe.
Live in it for free until the end date of the redemption period. In order to live in the home until the end of the redemption period (usually 6 months), you must pay the utilities and maintain the property until the end date—at which point you must notify the lender’s attorney that you are leaving and leave the property.
Do you need more help understanding what your options are? Are you having trouble communicating with your lender? Contact one of our MSHDA certified homeownership counselors in your area to set up a confidential, one-on-one meeting to discuss your situation and what the next steps to take might be.
After you’ve completed your initial phone call with a housing counselor in your area, please fill out our intake packet including a list of documents you’ll need prior to your appointment. This paperwork will help you and your counselor understand your situation and come up with a plan of action. Facing foreclosure is time-sensitive, so act now!