Many struggling homeowners in Michigan have benefited from the moratorium on foreclosure that has been in place since 2020. However, eventually that moratorium will end meaning there may be an onslaught of foreclosure actions. Foreclosure can be incredibly stressful and unpleasant. If you have fallen behind on your mortgage payments and do not anticipate being able to pay them after the moratorium, you will want to understand the foreclosure process — after all, sometimes the best way to protect your interests is through knowledge.
What is foreclosure?
A house will go into foreclosure if the homeowner cannot fulfill their mortgage obligations, so the bank files a lawsuit against the homeowner. Through foreclosure, the bank will sell the home at an auction in order to recoup what is owed. There are two different kinds of foreclosure – judicial foreclosure and non-judicial foreclosure.
In a judicial foreclosure, after the bank failure to reach a settlement with the homeowner regarding mortgage delinquencies the bank will file a lawsuit against the home and the homeowner. This means the bank will file a complaint and will serve the homeowner. Following that, the bank will move the court to transfer title to the home to the bank. Then, the home will be sold at a public auction.
In a non-judicial foreclosure, the bank does not file a lawsuit. Instead, the bank works with a third-party trustee to pursue a foreclosure. The process varies based on state law, but generally once the bank completes the foreclosure process, the house will be sold at a public auction. What is important to know is that non-judicial foreclosures can commence without requiring that the bank obtain title through a court process.
Learn more about foreclosure in Michigan
Being faced with the possibility of foreclosure can be a worrisome and intimidating experience, but help is available. This post is for educational purposes only and does not contain legal advice. Our firm’s webpage on foreclosure in Michigan may be a useful resource for those who want to learn more about this important topic.