So you have been “foreclosed on” by your mortgage company, what does that mean?

If your home has gone to auction/sheriff sale, at the circuit court in your county, and assuming that the bank has taken care to make sure they have complied with all foreclosure laws, your concerns should now be: 1) how much longer can I stay in my home, and 2) What, if anything, do I owe?

Once your home has been sold at auction, you have a period of time in which you can redeem your mortgage.  This period is known as the redemption period.  The clock starts on your redemption period when the document used to transfer your home- the sheriff’s deed- is recorded in your county’s register of deeds.  MCL 600.3232.  So if your sale occurred on January 2, 2011, and the sheriff’s deed was not recorded until March 1, 2011, your redemption period starts on March 1, 2011.

What is a redemption period? The client, the client’s successors, or any person claiming under the client may redeem the property within the redemption period by paying to the register of deeds or the buyer at the auction, the amount bid for the entire premises sold plus interest from the time of the sale, together with the sheriff’s fee for the foreclosure and sheriff’s deed, and any taxes or insurance premiums properly paid and proven.  If this happens, the mortgage has been satisfied! But, realistically, most of our clients cannot afford to redeem their property.  So you may be asking yourself, then why do I care about the redemption period?

During the redemption period, the client is entitled to: 1) possess (occupy) the entire property, without paying their mortgage; 2) all rents on the property; and 3) to sell the property (subject to approval.)  You do not have to move out on the day that your home is sold at auction, you have until the expiration of your redemption period.  This provides you with additional time to resolve your problem.  Such resolutions may include, a Deed-in-lieu of Foreclosure, a Loan Modification, or a Short Sale.  Navigating these waters should only be done with an experienced attorney–we can help!

How long is it? Michigan law prescribes the amount of time that you have pursuant toMCL 600.3240.  The redemption period can be as little as 30 days, or as long as 1 year. The following is a break down of the period for a mortgage which was dated after January 1, 1965.

• If you had a mortgage which was dated after January 1, 1965 on commercial, industrial, or multifamily residential property in excess of 4 units, your redemption period is 6 months (if the property was not “abandoned”).
• If you had a mortgage which was dated after January 1, 1965 on residential property with less than 4 units, which is less than 3 acres of property, and with a mortgage debt as of the date of first publication which is less than 2/3 of original indebtedness, yourredemption period is 1 year (if the property was not “abandoned”).
• If the property was declared Abandoned per MCL 600.3241, your redemption period is 3 months.
• If the property was declared Abandoned per MCL 600.3241(1), your redemption period is 30 days.
• If you had a mortgage which was dated after January 1, 1965 on residential property with less than 4 units, which is less than 3 acres of property, and with a mortgage debt as of the date of first publication which is more than 2/3 of original indebtedness, yourredemption period is 6 months (if the property was not “abandoned”).
• If the property was declared Abandoned per MCL 600.3241, your redemption period is 30 days.
• If the property was declared Abandoned per MCL 600.3241(1), your redemption period is 30 days.
• If you had a mortgage which was dated after January 1, 1965 on residential property with less than 4 units, which is MORE than 3 acres of property, your redemption period is 1 year (if the property was not “abandoned”).

In order to ensure that your legal rights are protected, you need to speak with an attorney to evaluate your specific case.  A foreclosure can have lasting effects on your bank account, your credit report, your tax bill, your employment and your future well being.