After Foreclosure, How Long Can I Stay In My Michigan House?

After a Michigan foreclosure by publication, there is a statutory redemption period.

The national average for the whole process is over a year from when payments stop being made before the foreclosure process is complete.

Foreclosure is controlled by state law, so each state has its own rules.

In Michigan, as long as the home is not abandoned, the basic rule is 180 days after the sale before the buyer, almost always the first mortgage holder, takes title to the property.

More astonishing statistics: over 650,000 homes in America are at least one and a half years, 18 months, behind on their payments.

And, in almost one in five of these cases, foreclosure proceedings have not even started.

My guess, the mortgage companies reportedly have nearly a 3 year supply of homes they already took back, that they have not put up for sale yet.

Many houses in southeast Michigan are not worth taking back, underwater, that is, not worth the cost of foreclosure to get them back and try to re-sell them.

To repeat one of my themes: it is only going to get worse in Michigan.

During that redemption period, the mortgagor, the homeowner, still owns the home.

She or he can live there, rent it out, sell it, whatever.

Yes, over half the home in Michigan with a mortgage are underwater, worth less than what is owed on them, so a sale would be a short sale, requiring the mortgage company to release its lien for less than full payment.

And then, there has to be an eviction proceeding if the homeowner does not voluntarily leave.

Streitfeld wrote in the NY Times: Owners Stop Paying Mortgages, and Stop Fretting

The average borrower in foreclosure has been delinquent for 438 days before actually being evicted, up from 251 days in January 2008, according to LPS Applied Analytics.

Now, saving 14 to 18 monthly mortgage payments during this foreclosure process, or whatever can be saved, is certainly enough to move somewhere else.