Michigan Foreclosed Homes

In Michigan, there are two different processes by which a lender can foreclose: judicial action or advertisement. For residential property, lenders most often use foreclosure by advertisement, which is contractual in nature and governed in part by the terms within the mortgage document. Generally speaking, a foreclosure by advertisement starts when the homeowner defaults on their loan payments as defined in the mortgage document. The lender can then begin the foreclosure process by setting a date for a foreclosure sale and posting notice in a local newspaper and on the premises. The sale of the property at the foreclosure sale is not the end of the story, however, because the homeowner has a period in which they can recover or "redeem" the property by paying the amount it sold for at auction, together with interest and certain costs.

Lender Contact

It is important for a homeowner who has fallen behind in their mortgage payments to open their mail and keep in touch with their lender. In this way, they may be able to make a work-out agreement. In fact, most lenders have an entire loss mitigation department exactly for this purpose. At the very least, the homeowner will be aware of where they are in the foreclosure process.

Mortgage Counseling

A homeowner can also contact a mortgage counselor as soon as possible upon missing a mortgage payment. But not every company advertising itself as a "mortgage counselor" should be trusted. Both the Michigan State Housing Development Authority and the U.S. Department of Housing and Urban Development (HUD) have a list of counselors.

Michigan Foreclosure Trends

In the first quarter of 2008, an estimated 29,544 homes in Michigan entered some stage of foreclosure. This represented a 24 percent increased over 2007. Detroit Michigan foreclosures have also experienced a notable increase. One local foreclosure data firm reported that in April 2008, foreclosures jumped approximately 20 percent from the same time last year.

Buying Foreclosures in Michigan

As the number of foreclosures continues to rise in Michigan, opportunities for real estate investing has become more robust. The most popular Michigan foreclosed search areas are currently:

• Detroit
• Davison
• Grand Blanc
• Dearborn
• Genesee
• Wayne
• Macomb
• Oakland

In April 2008, Wayne Michigan reported approximately 3000 foreclosures, while Oakland and Macomb were the second highest cities with an average of 1000 new foreclosures. With foreclosure counts continuing to rise and an average sale price of only $79,545 (well below the national average) it is clear why this beautiful state is considered an investment hot spot.