MSU Extension MI Money Health

The number of delinquent mortgage loans being foreclosed is continuing to rise. According to a SoFi Learn report in April 2023, the expiration of COVID relief government programs such as moratoriums and loan forbearance is contributing to increasing foreclosure rates. During the COVID-19 pandemic, millions of Americans lost income, were unemployed, and had a mortgage forbearance agreement with their mortgage company. When a homeowner’s forbearance period runs out, they may be facing foreclosure if they cannot resume monthly mortgage payments or work out a relief option with their mortgage company. Understanding the foreclosure timeline may help reduce stress of the unknown and clarify options.

Michigan State Housing Development Authority (MSHDA) breaks down Michigan’s Foreclosure Timeline for mortgages as follows:

• Day 2-36
  • Payment due on the first and considered delinquent on the second. Late charges assessed. Lender/Servicer must make live contact with the homeowner about options.
• Day 45
  • Lender/Servicer must assign a contact to the homeowner and provide written notification of delinquency and loss mitigation options.
  • During this time, work with the lender to obtain loan modification or other loss mitigation option and if your lender allows partial payment – make the payment.
• Day 121
  • If a default resolution is unsuccessful or a hardship application not received, the lender can begin the foreclosure process. A Notice of foreclosure is recorded at the local county Register of Deeds. A Sheriff Sale date is scheduled and is published in a county newspaper for four weeks and the notice of sale date is posted on the property within two weeks of first publication.
• Sheriff sale held: The "Sheriff's Deed" lists the last date the property can be redeemed. Up until the sheriff sale has occurred, the homeowner may still submit a loss mitigation application
• Six months
  • The homeowner can live in the property, usually for six months, and is not required to make payments. Can buy back the property for the amount of bid + interest + fees. Can work with the purchaser to sell or obtain a deed-in-lieu of foreclosure. Must maintain the property, utilities, renter’s insurance, and allow the purchaser to inspect the property.
• Redemption period and inspection
  • Home Inspections: If an inspection is unreasonably refused or if damage to the property is imminent or has occurred, the purchaser of the property at the sheriff sale may immediately begin eviction proceedings to seek possession and terminate the homeowner’s redemption period. Once you move out, the purchaser (normally the lender) may take action to gain possession of the abandoned property.
  • Eviction: At the end of the redemption period if you have not already vacated the home you will receive a summons to appear in court. At the hearing, a date is set for the sheriff to physically remove you from the property, if necessary. 

One option currently available in Michigan to help eligible homeowners keep their homes is the Michigan Homeowner Assistance Fund (MIHAF). Funds are projected to last until the fourth quarter of 2023.

Facing foreclosure is a stressful time but understanding the foreclosure timeline may help reduce some of the stress. It is important to be realistic when facing foreclosure and sell your home if you cannot afford to keep it. You can contact an MSHDA approved agency such as a Michigan State University Extension housing counselor for free assistance. 

Michigan State University Extension has released the Starting Over After Foreclosure toolkit for homeowners who are experiencing or have previously experienced foreclosure. This toolkit will equip these individuals and families with tools to help them recover their financial stability, in the case that a recovery of their home is not possible. The toolkit is available to download free at the MI Money Health website.