Detailed Answer
Facing a foreclosure hearing on a home you own jointly can feel urgent. Under Michigan’s foreclosure laws, the lender follows procedures in MCL 600.3201 et seq. To prepare for sale, co-owners should coordinate early to maximize value and comply with court deadlines. This section outlines a step-by-step approach.
1. Verify Ownership and Debt Details
Obtain a title search or title report to confirm ownership percentages and any outstanding liens. Review the foreclosure summons and complaint to note key dates. Michigan law requires the lender to serve co-owners at least 42 days before the sale under MCL 600.3204.
2. Communicate with All Co-Owners
Hold a meeting or conference call to discuss goals: sell before foreclosure, refinance the loan, or pursue a modification. Document decisions in writing and have all parties sign. Clear communication avoids disputes that can trigger a partition action under MCL 600.2801, which forces a court-ordered sale.
3. Obtain a Professional Appraisal
A current appraisal establishes a realistic listing price. Engage a licensed appraiser who understands local market trends. A firm appraisal helps in negotiating with lenders for a short sale or postponement.
4. Repair and Stage the Property
Address minor repairs—fix leaks, replace broken fixtures, paint, and tidy landscaping. Stage key rooms to showcase the home’s best features. A well-presented property can sell faster and closer to market value, reducing any shortfall.
5. Consult a Real Estate Agent and Attorney
Hire a realtor experienced in short sales and foreclosure timelines. They can market your home under tight deadlines. Retain a Michigan real estate attorney to review sale agreements, ensure compliance with notice requirements, and prepare court filings if needed.
6. File Agreements or Motions with the Court
If co-owners agree to a sale, file a stipulation or joint motion to postpone the foreclosure sale date. Courts often grant brief delays for bona fide sale efforts. Attach the proposed purchase contract and a timeline to show active marketing.
7. Close the Sale and Distribute Proceeds
At closing, sale proceeds first satisfy senior liens and foreclosure costs. Michigan law governs distribution under MCL 600.3271. Any surplus divides among co-owners according to their ownership interests.
Disclaimer: This article is for informational purposes and does not constitute legal advice.
Helpful Hints
- Review your mortgage documents for acceleration and default clauses.
- Keep records of all communications with co-owners and the lender.
- Act quickly: Michigan courts often schedule foreclosure sales 6–10 weeks after filing.
- Explore loan modification or refinancing as alternatives to selling.
- Contact HUD-approved housing counselors for free or low-cost guidance.