Foreclosures/Liens

Question:
I am going through a foreclosure and I've been told that my mortgage has a “power of sale” clause. What is that?

Answer:
If the mortgage contains a "power of sale" clause, the lender is able to foreclose without obtaining court approval. A foreclosure by “advertisement” must follow specific guidelines, such as:

• The mortgage must be in default
• You must be notified of the default, reasons for foreclosure and amount due in writing before the mortgagee (lender) begins the foreclosure by advertisement
• You have the opportunity to request a meeting to negotiate a loan modification with the mortgage company and a housing counselor.
• The notice of foreclosure must also be posted in the newspaper for four consecutive weeks and must be posted on the property
• If another buyer purchases the property at the sheriff's sale, you still have the opportunity to redeem the property during the redemption period.

When a borrower is eligible for loan modification under Michigan's foreclosure laws, the mortgage company or bank cannot foreclosure by advertisement. They must use the judicial foreclosure process.

Question:
What can I do when the mortgage company tells me they are going to foreclose my home?

Answer:
There are multiple ways to redeem your property following notice of foreclosure. You may:

• Repay the arrearage balance to bring the house out of foreclosure
• File for bankruptcy under Chapter 13 prior to the Foreclosure sale occurring
• Pay the loan amount plus interest and/or sell the house after the foreclosure has occurred and before the expiration of the redemption period

Generally, the redemption period following a foreclosure sale is six months. However, there are some exceptions that can increase or decrease the redemption period.