Marcus purchased a home in Grand Rapids with a mortgage of $200,000. He later defaulted, and the lender foreclosed by advertisement. At the sheriff's sale, the property sold for $180,000, leaving an outstanding balance of $160,000 on the original $200,000 loan. What is Marcus's statutory redemption period under Michigan law?
Correct Answer
D) 12 months, because the outstanding balance exceeds two-thirds of the original loan amount
Under MCL 600.3240, when the outstanding loan balance exceeds two-thirds of the original loan amount, the redemption period is extended to 12 months (1 year). Here, two-thirds of $200,000 is approximately $133,333. The outstanding balance of $160,000 exceeds that threshold, so Marcus has a 12-month redemption period.
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