Written By: Marvin Morrison, CEO of SFAlly.com

Related Blog: Foreclosure or Short Sale? Making The Right Choice

Navigating the foreclosure process can be a daunting experience. Depending on where you are in the foreclosure timeline, there are different options at your disposal, including keeping the house, selling it, or letting the foreclosure continue. Your choice will largely depend on your financial situation and the timeline stage you find yourself in.

1. Delinquency: As soon as your mortgage payment due on the 1st day of the month goes unpaid, you are considered delinquent on the 2nd day.
2. First Notice: If the payment isn’t made by the 16th of the month, the lender sends the first notice of delinquency, and a late fee is imposed.
3. Default: If the payment isn’t completed by the end of the month (the 30th), the loan falls into default and a second notice is sent out.
4. Acceleration: If the loan is 60 days overdue, your lender may “accelerate” the loan, meaning the entire balance of the loan is due immediately. At this point, you are warned that foreclosure is imminent if the payment is not made.
5. Foreclosure Initiation: After 90-120 days past due, the foreclosure process begins. In Michigan, foreclosure by advertisement is most common.
6. Property Advertisement: The lender’s attorney then advertises the property for sale in a newspaper for four consecutive weeks. Typically, the Sheriff’s sale (auction) is held on the 5th week.
7. Sheriff’s Sale: On the advertised date, the Sheriff’s sale is held. A deputy leads the auction, and the property usually goes to the highest bidder (often the lender). If the sale is delayed, a notice is posted at the sale location and in the newspaper.
8. Sheriff’s Deed: Following the sale, the highest bidder receives a “Sheriff’s deed,” which indicates the last day the original homeowner can redeem or reclaim the property, generally 6 months to 1 year from the Sheriff’s sale date. 

9. Redemption Period: During this redemption period, you have three options:

   a. Redemption: You may raise the necessary funds to redeem the property by securing a new mortgage. This will require covering the original mortgage, interest, late fees, court costs, attorney fees, title, appraisal fees, taxes, and insurance.

   b. Sale: You can sell the property. However, the sale price must cover all the costs listed above. If you pursue a short sale (selling for less than what’s owed on the mortgage), you’ll need your lender’s permission. 

   c. Occupation: You may continue to live in the property until the redemption period’s end date, usually 6 months. However, you are required to maintain the property as your primary residence, cover the utilities, and leave once the period ends.