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Changes to Michigan’s Foreclosure Redemption Period

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Michigan’s Foreclosure Redemption Period: New Duty to Allow Inspections

It used to be the case under Michigan law that you were entitled to a 6-month “redemption period” following a foreclosure sheriff’s sale, during which period of time you could continue to reside in your house as you always had. It was a period of time that Michigan law granted foreclosed homeowners in order that they might be able to obtain the financing necessary to “redeem” their home. That is, to buy it back it back from the sheriff’s sale purchaser for whatever was paid for it.

If your home sat on acreage of 3 acres or more, the redemption period was 12 months rather than 6. If your home was empty or abandoned, the foreclosing party could file a motion in a Michigan court to have the redemption period shortened to 90 days.

In December, 2011, the law regarding the length of the redemption period was revised to do away with the acreage consideration. Instead, the duration of the redemption period swung from 6-12 months depending upon the amount of indebtedness on the mortgage at the time of foreclosure.

Regardless, whatever the duration of the redemption period, foreclosed homeowners had no duty to allow entry to their home of any employee or contractor of the foreclosing party—or of anyone else. The home remained theirs until required to vacate at the end of the redemption period.

Now, effective January 10, 2014, that is changing.

Changes to Michigan’s Foreclosure Redemption Period: The Right to Inspect

As of January, 2014, purchasers at sheriff’s sale will have the right to inspect not only the exterior of the foreclosed home—but also the interior of the home, and any additional structure on the property.

If the inspection is “unreasonably” refused or if it appears that the property has been damaged or that damage is “imminent,” the purchaser can begin an eviction proceeding immediately, without waiting any number of months.

A judgment for possession will not be entered by the court in which the eviction action is filed if the homeowner repairs the damage in question, but the damage that can trigger an eviction proceeding can be something as incidental as “accumulated rubbish, trash, or debris.”

How much trash has to accumulate before the purchaser throws a homeowner and his or her children out onto the street? What is “debris,” exactly? What is an unreasonable refusal? Is it reasonable for a purchaser to demand entry at dinner-time, or at 10:30 PM, when you’re trying to put your kids to bed?

The statutory change guarantees only one thing: that homeowners who have suffered a hardship can look forward to high pressure and harassment from the agents of realtors hired by foreclosure purchasers to turn foreclosed properties over.

Michigan’s Foreclosure Redemption Period: The Bottom Line

The bottom line regarding Michigan’s foreclosure redemption period continues to be that you can’t take the redemption period for granted any longer. If your home passes through a sheriff’s sale, you should expect that your peace of mind has come to an end. It is no longer simply that you must now count down the number of days and months at your disposal before you must relocate; you now have a duty to cooperate with the new owner of the property—and a new duty to maintain the place, regardless of cost, at the risk of being forced out even more quickly.

The bottom line is that this statutory change is another example of legislation intended to benefit the financial industry, to the detriment of Michigan’s consumers and homeowners, who are the real fuel of our beleaguered state economy.

Consider this sort of legislation when you step into the voting booth in November and which political party has been running Lansing for the past several years. Consider whether you, the consumer, have benefited from the work of this political party, at any level at all.

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