This is a non-judicial action to sell a property through an auction facilitated by a county Sheriff’s department. This type of action is commenced by a Mortgage company or lender (Mortgagee) when a property owner or borrower (Mortgagor) falls behind in their mortgage payments, does not make any other payment arrangements, and does not wish to keep the property and eventually, the account goes into default. A mortgage document contains a power of sale clause that has become operative by reason of a default in the condition of the mortgage. The mortgage company hires a debt collector to manage the process by notifying the mortgagee, arranging for the property to be sold through the county Sheriff’s office where the property is located, and post the appropriate auction sale notices on the property, and for publication in the legal newspaper of that county. The Sheriff's office will conduct the sale through an auction where bids are placed starting with a minimum bid of the amount due on the mortgage. Ultimately, the property will be sold to the highest bidder. After that, the Sheriff’s office will post a foreclosure sale notice where all the parties and property information will be conspicuously displayed. Based on the applicable Michigan law and for the consideration of the sum of money paid by the bidder to purchase the property, a Sheriff’s deed will be issued to the new owner (Grantee) stating that the Mortgagor now sells and assigns title to this property to the Grantee. The deed and all the relevant paperwork are recorded with the County Register of Deeds. The deed states the details of the foreclosure, including the legal description of the premises, the parties, the purchaser’s name, the purchase price, and the redemption period expiration date, as certified by the auctioneer. Michigan law requires that the purchaser provide and record an affidavit with the sheriff's deed, which states the exact amount required to redeem the property and the per diem. The deed must be recorded within 20 days after the date of sale. After the sale, a redemption period begins, during which, the previous owner has the right to redeem the property from the successful bidder.
The interesting part is that the Sheriff or its agents will not provide any copies of any paperwork to anyone except to the Circuit Court in that jurisdiction. If the property sells at a price above what is owed in the foreclosed mortgage, the excess or surplus funds are sent to the County Court Clerk. Any interested parties who believe are entitled to these surplus funds, such as what is now the previous owner or Mortgagor, must file a petition with the Court to request release of those funds.
It can be very complicated and tricky if you don’t know how to navigate these types of situations. Our competent Real Estate attorneys in Ann Arbor at Pear Sperling Eggan & Daniels, PC, can help you understand this process and file your case. 734-665-4441
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