If you are a lender, whether institutional or individual, and the borrower is not paying, I can help.

The most common foreclosure process in Michigan is called foreclosure by advertisement, a method that does not involve the courts. Most mortgages contain a “power of sale” provision, which authorizes the mortgagee (the lender), upon default, to send a notice to the mortgagor (the borrower) that the property will be sold, for the amount of the loan balance, at a Sheriff sale within the next month. A notice of the sale containing specific information is then published in the local legal news, and the County sheriff then conducts the sale. A title commitment should be obtained prior to the sale to confirm that there are no other mortgages or liens that need to be cleared in advance of the sale. After the sale, the borrower commonly has a six-month redemption period in which to pay the lender the amount of the debt plus interest and costs, failing which the lender obtains full title to the property. During the redemption period the borrower retains possession of the property but is responsible for any damage to it. If the borrower refuses to move, a District Court eviction proceeding must be started.

The most common remedy for the land contract seller when the buyer is in default is to file a forfeiture lawsuit in the District Court in the city where the property is located. After sending the requisite Notice of Forfeiture to the purchaser, the Complaint must allege specific information, including the amount in arrears, which, plus costs, would constitute the amount of the judgment. (To accelerate the full unpaid land contract balance, as occurs with a mortgage foreclosure, a Circuit Court land contract foreclosure action must be maintained.)

The purchaser’s failure to pay the land contract judgment amount entitles the seller, after the redemption period, to obtain an Order of Eviction to direct the Court officer to remove the purchaser physically from the premises. Depending on how much of the original land contract purchase price has been paid, the purchaser has either 90 days or 180 days to redeem the land contract before entry of the Order of Eviction. If the purchaser has paid less than 50% of the initial sale price, the redemption period is 90 days. If the purchaser has paid more than 50%, the redemption period is 180 days.

If you have a mortgage or land contract that is in default, please call me to discuss.