Foreclosure is a legal process that mortgage lenders can use in order to satisfy a homeowners obligation to them.  Foreclosure normally results from non-payment of a debt.

Stages of Foreclosure

Foreclosure can happen in Michigan either by judicial action or by newspaper advertisement.  The most common foreclosure action in Michigan is by advertisement, also known as non-judicial foreclosure.

• Foreclosure by Advertisement-This non-judicial form of foreclosure is made possible through a power of sale clause in a mortgage that is recorded at the Register of Deed’s office of the county in which the property is located.  In this process, the lender's attorney advertises the property for sale in a local newspaper for four consecutive weeks.  The property is then sold to the highest bidder at a public sale that is held at the courthouse.  This sale is often referred to as a Sheriff Sale.

• Judicial Foreclosure-If the deed of trust does not contain the power of sale language the lender must seek judicial foreclosure. The property is then sold as part of a publicly noticed sale. A complaint is filed in court along with what is known a lis pendens. A lis pendens is a recorded document that provides public notice that the property is being foreclosed upon. In a judicial foreclosure proceeding the court must issue a final judgment of foreclosure.