Understanding the redemption option during foreclosure

On Behalf of | Apr 19, 2022 | Foreclosure |

Most Michigan residents dealing with the foreclosure process will do anything to keep their home. However, with the recent troubling times, many homeowners find themselves simply out of options and unable to make or catch up on their mortgage payments.

If you are in this situation, your lender will eventually schedule a Sheriff’s sale to sell your home. You will receive notice of the day and time of the sale. Many times, your lender itself will purchase your home at the sale.

The redemption period

You may think once the Sheriff’s sale is complete you must leave your home, but that is not true. You have up to six months before you are evicted after a Sheriff’s sale. This is called the redemption period, and Michigan law states that you do not have to physically leave your home until the redemption period ends.

In some situations, the redemption period is 1 year. If you have paid more than one-third of your total mortgage off prior to foreclosure, or if your property is situated on more than 3 acres of land and it is used for farming, you will have a 1-year redemption period.

The purpose of a redemption period is to give you one, final chance to stay in your home and avoid foreclosure and eviction. You can stay living in your home during the redemption period, and you do not have to make mortgage payments.

Using the redemption period to save your home

However, to stay in your home, you will need to pay your lender a sum of money that includes the price your home was sold for at the Sheriff’s sale, any costs associated with the sale and a daily interest rate. If you pay this total amount before the redemption period ends, you can stay in your home and avoid eviction.

There are many foreclosure alternatives that may be available to you, to help you avoid a Sheriff’s sale and scrambling to come up with money to redeem your home. Speaking with an attorney to discuss options if you have trouble making your mortgage payments is a good idea.