If I Lose My Home to Foreclosure in Michigan, Can I Get It Back?

Under Michigan law, foreclosed homeowners get a limited amount of time to repurchase or "redeem" the home after a foreclosure sale. Depending on your situation, you'll get a one-month, six-month, or one-year redemption period during which you can live in the home. These different redemption periods are explained in more detail below.

To redeem, you would have to find another source of financing and reimburse the purchaser (the person or entity who bought the home at the foreclosure sale) for the full price paid at the sale, plus various other costs.

What Is the Right of Redemption After a Foreclosure Sale?

In about half of the states, homeowners get one final chance to save their home, even after a foreclosure sale. The right to redeem the property after a foreclosure sale is called a "statutory" right of redemption because it's set out in the state statutes (laws).

Suppose your state provides a statutory right of redemption. In that case, you get a redemption period, which is a limited amount of time to repurchase the home from the person or entity that bought it at the foreclosure sale. Depending on state law, you must either reimburse the purchaser for the price paid at the sale or pay off the full amount you owed on the mortgage loan, plus foreclosure fees and costs.

Basically, the redemption period gives you some additional time after the foreclosure sale to find funding to buy your home back. The length of the redemption period following the sale, if available, varies widely based on state law and the particular circumstances.

Right of Redemption After Judicial and Nonjudicial Foreclosures

In some states, foreclosures are always judicial, which means they go through the court system. In others, the foreclosure process is typically nonjudicial (out of court), although these states also permit judicial foreclosures.

Right of redemption in judicial foreclosure states. States that use a judicial process to foreclose often give homeowners the right of redemption after a foreclosure. Even if state law doesn't provide an actual redemption period after the sale, some states allow a very limited amount of time for the homeowner to redeem until certain post-sale formalities are completed. For example, the homeowner might be able to redeem up until the court confirms the foreclosure sale.

Right of redemption in nonjudicial states. Except for a few states, there is generally no redemption period after a nonjudicial foreclosure. States that allow nonjudicial foreclosures sometimes have more than one law for redemption periods—one that applies to nonjudicial foreclosures and another to judicial foreclosures. In general, these states tend to provide a redemption period following a judicial foreclosure but not after a nonjudicial one.

What Are the Rights of Redemption in a Foreclosure in Michigan?

The majority of residential foreclosures in Michigan are nonjudicial, which means the foreclosure takes place without court supervision. However, unlike many other nonjudicial foreclosure states, Michigan provides a redemption period for foreclosed homeowners after the sale.

Following the foreclosure sale, the redemption period for the home is:

• six months if you owed more than two-thirds of the original loan amount, or
• one year if you owed less than two-thirds of the original loan amount. (Mich. Comp. Laws § 600.3240(8),(12)).

Most homeowners in Michigan get six months to redeem the property after a foreclosure sale.

If you abandon (leave) the home, the redemption period is 30 days after the sale or until the required notice that the lender considers the premises abandoned expires, whichever is later. (Mich. Comp. Laws § 600.3240(10)).

How to Find Out the Length of Your Redemption Period After a Michigan Foreclosure

To find out how long the redemption period is in your particular case, check the notice of sale. (Mich. Comp. Laws § 600.3212.) This notice is the one that was published in the newspaper and posted on your property as part of the Michigan foreclosure process.

If you don't redeem the home within the allocated redemption period, you won't have another opportunity to get your house back this way.

What Costs Are Involved in Redeeming a Foreclosed Home in Michigan?

To redeem your Michigan home, you must reimburse the purchaser for the full amount paid at the sale, plus interest and various costs that the purchaser paid after the sale, such as insurance premiums, homeowners' association assessments, and property taxes. (Mich. Comp. Laws § 600.3240(1),(4)).

What Are the Steps to Redeem My Foreclosed Property in Michigan?

To redeem, you must pay the redemption amount to the purchaser or the purchaser's personal representative or assigns, or to the register of deeds in whose office the deed is deposited for the benefit of the purchaser. (Mich. Comp. Laws § 600.3240(1)).

If you need help redeeming your Michigan home after a foreclosure, consider hiring an attorney to help you through the process.

You Can Stay In the Home During the Redemption Period in Michigan

You can live in the property during the redemption period. However, under Michigan law, you must allow the purchaser who bought the house at the foreclosure sale to inspect both the interior and exterior of the home during this time. (Mich. Comp. Laws § 600.3238).

The purchaser of the home may begin eviction proceedings if you:

• unreasonably refuse to allow the purchaser to inspect the home or
• cause damage to the home (or if damage to the home is imminent). (Mich. Comp. Laws § 600.3238).

The purchaser from the foreclosure sale must give you an initial notice with certain information, such as the purchaser's identity, and a notice 72 hours before inspecting the home's interior. The law also limits the number of interior reviews the purchaser can do. If you get such notice and plan to vacate the property before the redemption period expires, you must tell the purchaser when you are moving out or you might face heightened liability for damage to the premises. (Mich. Comp. Laws § 600.3237.)

Can I Sell My Home During the Redemption Period in Michigan?

If you decide you don't want to keep the home, you can try to sell it during the redemption period. If you sell it for more than the redemption price owed, you keep the difference.

Right of Redemption Before a Foreclosure Sale

No matter your state, you get the right to redeem the home before a foreclosure sale occurs. This right is called an "equitable right of redemption." It's based on the idea that it's fair to let a homeowner keep the home if they pay off the mortgage debt even if they're already in default and the lender has initiated foreclosure proceedings.

What Happens If I Can't Afford to Redeem My Home in Michigan?

Most homeowners going through a foreclosure don't have enough money to redeem either before or after a foreclosure. You might have other options for saving your home besides redeeming the property, but you must do so before the sale.

For example, you could reinstate the mortgage loan by catching up on the past due amounts. Check your loan documents to find out if you get a reinstatement right and, if so, the deadline to complete one. (You can also ask the servicer if you can reinstate.) Or you might be able to arrange a foreclosure alternative with the lender, such as a mortgage modification or repayment plan, that would allow you to stay in the property.

But you must work out one of these arrangements before the foreclosure sale.

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Talk to a Lawyer

If you're behind in mortgage payments and worried about foreclosure, you might have more options than you think. Consider talking to a foreclosure attorney to learn about alternatives. A lawyer can advise you about loss mitigation options, your legal rights in a foreclosure, and defend you against a foreclosure in court.

Also, consider contacting a HUD-approved housing counselor if you need more information about loss mitigation options or want help with the application process.