Your Options in a Michigan Foreclosure

If you're behind on mortgage payments, you still have options—even if the foreclosure process has already started. Michigan law gives homeowners time and choices. Here are the main ones:

1. Catch Up on Payments (Reinstatement)

You can bring the loan current by paying the past-due amount, late fees, and legal fees.

When this works best:

You recently had a temporary setback (job change, medical, etc.)
Your income is back on track

Goal: Get the loan back to normal.

2. Set Up a Payment Plan or Loan Modification

Ask the lender to adjust the loan so the missed payments are added to the back of the loan or spread out.

This can look like:

Lower monthly payments
Longer loan term
Delayed payments while you recover financially

Goal: Make the mortgage affordable again.

3. Refinance the Home

Replace your current mortgage with a new loan—ideally with better terms.

This only works if:

Your credit hasn't taken too big of a hit yet
You still have income and equity

Goal: Get a fresh start with a new mortgage.

4. Sell the Home Before Foreclosure (Most Common Solution)

You still own your home, and you can sell it up to the last day of the redemption period.

If the home has equity, selling allows you to:

Pay off the mortgage
Keep the remaining money
Avoid foreclosure on your credit report

Goal: Protect your credit and walk away with cash.

5. Sell After the Sheriff’s Sale (During the Redemption Period)

Even after the home is “sold” at the Sheriff’s Sale, you usually get 6 months to:

List and sell the home
Pay off the amount from the sale
Keep whatever equity is left

Goal: Last chance to keep your equity.

6. Short Sale (If You Owe More Than the Home is Worth)

If the mortgage balance is higher than the home value, the lender may allow you to sell it for less than what is owed.

This can avoid foreclosure and reduce damage to credit.

Goal: Exit the property without the full debt remaining.

7. Deed in Lieu of Foreclosure

You voluntarily transfer ownership to the bank to stop the foreclosure.

This is usually considered only after other options are not possible.

Goal: End responsibility without eviction.

Which Option Is Best?

Situation Best Option

Income is restored Reinstatement or Loan Modification

Home has equity Sell before or during redemption period

Home is underwater (worth less than owed) Short Sale

No income + no equity Deed in Lieu or relocation planning

Key Michigan Advantage

Michigan gives homeowners one of the longest “second chances” in the country — the Redemption Period.

During this time you can:
✅ Stay in the home
✅ Sell the home
✅ Keep your remaining equity
✅ Avoid a foreclosure on your credit