If I lose my home to foreclosure in Michigan, can I get it back?

Question

My house in Michigan was sold at a foreclosure sale last week. But I still live in the home and am wondering if I am supposed to vacate it now.

Also, if possible, I'd really like to keep the property. Is there some way for me to get the house back even though the foreclosure sale has already happened?

Answer

You don't have to leave the home yet and it is possible for you to get it back. Under Michigan law, foreclosed homeowners get a certain 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. This is 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.

When You Can Redeem Your Home After a Michigan Foreclosure Sale

The majority of residential foreclosures in Michigan are nonjudicial, which means the foreclosure takes place without court supervision. 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 get six months.)

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 Much You'll Have to Pay to Get Your Home Back

In order to redeem, 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).)

How to Find Out the Length of the Redemption Period

To find out how long the redemption period is in your particular case, check the notice of sale. (Mich. Comp. Laws § 600.3212.) (This is the notice that was published in the newspaper and posted on your property as part of the foreclosure process. To learn more about foreclosure laws and procedures in Michigan, visit Nolo's Michigan Foreclosure Law Center.)

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. (Learn more general information about the right of redemption.)

You Can Stay In the Home During the Redemption Period

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 interior of the home. The law also limits the number of interior reviews that 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.

You Can Try to Sell the Home During the Redemption Period

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.

How to Locate Michigan's Redemption Laws

To find the statutes that discuss your right to redeem the home in Michigan, go to Chapter 600, Act 236 of 1961 (236-1961-32) of the Michigan Compiled Laws.