The Homeowners’ Right to Redeem After the Foreclosure Sale in Michigan
Under Michigan law, homeowners can redeem the home after the foreclosure sale within:
six months, if more than two-thirds of the original indebtedness is still owed, or
one year, if the amount owed is less (Mich. Comp. Laws § 600.3240(8),(12)).
If the homeowner abandons the property, the redemption period is one month (Mich. Comp. Laws § 600.3240(10)).
How to Find Out the Length of the Redemption Period?
To find out the length of the redemption period , you can check the notice of sale that was published in the local newspaper as part of the foreclosure process (Mich. Comp. Laws § 600.3212). These are sometimes available online.
How Much for the Foreclosed Homeowner to Redeem Their Property?
In order to redeem the property, the foreclosed homeowner must pay the full price paid by the buyer at auction, plus all other lawful charges such as:
amounts paid after the sale for certain expenses (like property taxes, homeowners’ association assessments, and insurance premiums) (Mich. Comp. Laws § 600.3240(1), (4)).
It’s also possible, but not especially common, for the IRS to redeem the home if there was a federal tax lien on the property. The IRS gets a 120-day redemption period (or the allowable period under state law, whichever is longer) to redeem after the foreclosure. It would send you a notice in advance of the redemption if it decided to redeem the home.
Who Gets Possession of the Home During the Redemption Period?
The original homeowners get to live in the home during the redemption period. (If the home is sold at the foreclosure sale, the buyer receives a Sheriff's Deed, but will not officially own the property until the redemption period expires.)
Buyer Can Inspect the Home During the Redemption Period
Under Michigan law, the purchaser who bought the house at the foreclosure sale may inspect the home (both the interior and exterior) during the redemption period (Mich. Comp. Laws § 600.3238).
In addition, the buyer may begin eviction proceedings to get possession of the home (and terminate the homeowners' redemption period) if the foreclosed homeowners:
unreasonably refuse to allow you to inspect the home, or
cause damage to the home (or if damage to the home is imminent) (Mich. Comp. Laws § 600.3238).
Michigan law requires buyers to give an initial notice containing certain information and a notice 72 hours before the buyer inspects the interior of the home. it also restricts the number of reviews (interior) that buyers can do. The law also requires that, if the buyer gives notice, the foreclosed homeowner must let the buyer know when they are moving out, if they plan on vacating the home prior to the expiration of the redemption period.
How to Locate Michigan’s Redemption Laws
To find the statutes that discuss the homeowners’ right to redeem the home in Michigan, go to Chapter 600, Act 236 of 1961 (236-1961-32) of the Michigan Compiled Laws.