Quick Facts
– 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 borrower’s debt and gives them a short time to pay. If the borrower fails to pay within that time, 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 the property to pay off the balance on the loan in the event of 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) newspapers 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 lender’s name, a description of the property, the terms of the sale, and the sale’s time, place, and date.
- The sale must be made at a 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 be held originally. 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.
