To conduct a foreclosure in Michigan, the bank has to publish a foreclosure notice in a newspaper and post a copy on the property. Starting January 11, 2020, this notice must include some new language and information, which was purportedly added to protect homeowners.
However, while some of the requirements could benefit people facing foreclosure, other additions are either not helpful or might actually open homeowners up to harm.
In Michigan, the bank does not have to sue you in court to foreclose. Instead, it may use nonjudicial foreclosure procedures. To complete the process, the bank has to publish notice about the foreclosure sale in a local newspaper for four successive weeks at least once each week. It also has to post a copy of the notice in a conspicuous place on the property within 15 days after the first publication. (Mich. Comp. Laws § 600.3208).
Under Michigan law, the foreclosure notice has to contain specific information, including:
The home is then sold at a foreclosure sale. At the sale, anyone may bid on the property. But often the only bidder is the foreclosing bank.
As of January 11, 2020, a new Michigan law amends the statute (Mich. Comp. Laws § 600.3212) that describes what must go into a foreclosure notice. After the statute’s effective date, the notice must also include the following.
For a residential mortgage, the foreclosure notice must include a statement that says:
“Attention homeowner: If you are a military service member on active duty, if your period of active duty has concluded less than 90 days ago, or if you have been ordered to active duty, please contact the attorney for the party foreclosing the mortgage at the telephone number stated in this notice.”
While this disclosure might help inform service members that they have rights during a foreclosure, federal and state law provide more protections than this statement implies. If a military service member takes out a mortgage loan before military service, the federal Servicemembers Civil Relief Act prohibits a lender from foreclosing while the service member is on active duty or within one year afterward—unless a court orders the foreclosure or the service member signs a waiver. (To learn more, see Foreclosure Protections & the Military: When a Servicemember Gets a Mortgage Before Active Duty.)
Similarly, under Michigan law, so long as either the borrower entered into the mortgage before becoming a service member or the borrower is deployed in overseas service, the bank can’t foreclose nonjudicially during the period of military service, or within six months thereafter, unless a court orders the sale or foreclosure. (Mich. Comp. Laws § 600.3285).
Under the new law, the bank also has to provide the name, address, and telephone number of the attorney for the party foreclosing the mortgage. But if you’re in the military, rather than just calling the attorney for the party foreclosing the mortgage (as the notification states), consider talking to a lawyer on your own too. That way, you can learn about your rights under federal and state law, and how to invoke them. The bank's attorney probably won't tell you about all of your rights and isn't going to be looking out for your best interests.
Under the new law, the notice has to include the property’s street address. But the law also says that the notice and subsequent foreclosure sale are still valid even if the street address is omitted or erroneous. So, what’s the point of this requirement if the bank can get the information wrong or leave it out?
Moreover, it might actually be better for homeowners if the bank leaves this information off the notice because including the street address makes it easier for foreclosure rescue scammers to locate and target vulnerable homeowners.
The new law requires the notice to contain the time and date of the sale, which is good information for homeowners. In addition, the law says the notice must have a statement that the amount due on the mortgage might be greater on the day of the sale and that a foreclosure sale doesn’t entitle the purchaser to free and clear ownership of the property. This statement could be helpful to a potential third-party purchaser because it indicates how much might be needed to outbid the bank at the foreclosure sale and gives information about the status of the property’s title thereafter. But it’s not particularly helpful for a homeowner in foreclosure.
If you're facing a foreclosure in Michigan and would like to learn more about the process, discuss your rights, or get information about potential defenses to the foreclosure, consider talking to a foreclosure lawyer.
To get information about different loss mitigation options (foreclosure alternatives) and how to apply for one of those options, speak to a lawyer or a HUD-approved housing counselor.
Effective date: January 11, 2020