Once the sheriff’s sale is complete it’s important to know that you DO NOT HAVE TO MOVE until the redemption period is complete which is usually six months. If you know you will have to move, use this time to save money and look for a new place to live. Read more below about your responsibilities to maintain the property, when you must move, how you can keep your home and about resources to find affordable housing in Detroit.
You as the homeowner are entitled to a redemption period (usually 6 months) to recover the property from the purchaser (often the original lender).
CLICK HERE TO VIEW PDF of Rights During Redemption Period
WHAT ARE MY RIGHTS DURING THE REDEMPTION PERIOD?
What is the redemption period?
After a property is sold at a sheriff’s sale (foreclosure sale), there is a redemption period. For many properties, it is a six-month period, for some properties, usually those properties with three or more acres or if more than two thirds of the loan has been paid, it is a year. If the property has been declared abandoned, the redemption period can be substantially shortened to one month.
What happens to the property during the redemption period?
During the redemption period, you still have rights to the property. You can continue to live in the property and are not required to make any mortgage payments. You also have the right to sell the property to another person or buy back the property and keep it.
If I want to buy back the property, what is the purchase price?
At the sheriff’s sale, the purchaser paid a certain amount of money to purchase the property. Often the purchaser will be your mortgage company although it could also be another investor. The amount necessary for you to buy back, or redeem, your property is the amount the purchaser paid, plus some allowable costs and a daily interest rate based upon your mortgage loan interest rate. You can learn the sale price for your property by obtaining a copy of the sheriff’s deed from the Register of Deeds in the county where the property is located.
What if the purchase price at the sheriff’s sale is less than the amount of my loan?
It is possible that the sheriff’s sale purchaser, even if it was your mortgage company, paid less than the amount due on your loan. If you want to redeem, or buy back your property you do not have to pay the whole loan amount; you only have to pay the purchase price from the sheriff’s sale even if it is substantially less than your loan amount.
Regardless of whether you redeem the property or not, if the purchase price from the sheriff’s sale is less than the amount owing on your loan then you may be responsible for the difference, called a deficiency. The amount of the deficiency is set by the sheriff’s sale purchase price, not what the purchaser sells it for later. The mortgage company (or another company to whom they sell the debt) can try to collect on this deficiency. If a company attempts to collect the deficiency, you should see legal counsel regarding your rights and obligations.
What if I don’t buy back the property and I’m still there at the end of the redemption period?
If you do not buy back the property or sell the property to someone else, then the sheriff’s sale purchaser can file a court action to evict you from the property. They may also offer you “cash for keys”, which is where they pay you a small amount of cash if you agree to move out of the property by a specific date without a court order and leave the property in an acceptable condition. If you are a tenant, you have additional rights under federal law.
The purchaser should not simply change the locks or evict you without a court order. If this happens, you should contact an attorney immediately for assistance.
Prepared by: Legal Aid of Western Michigan www.legalaidwestmich.org October 2010
If you leave the home prior to the end of the redemption period, you must contact your lender as you are still legally responsible for the property and can be held responsible for property issues. If you vacate the home and contact the lender they can accelerate or shorten the redemption period to complete the foreclosure process for you.
At the end of the redemption period the homeowner loses the lost legal title and must give up possession of the home. The purchaser now has legal title to the home. You will get an eviction notice and a legal notice of an eviction action in court. You can go to court to fight the eviction. After the eviction date the Sheriff can move your belongings to the curb.