A Michigan homeowner defaults on their mortgage. The lender proceeds with a non-judicial foreclosure by advertisement (sheriff's sale). The property sells at the sheriff's sale. The homeowner's loan balance at the time of the sale was $95,000, and the original loan amount was $200,000. Assuming the property is not abandoned, what is the homeowner's statutory redemption period?
Correct Answer
D) 6 months, because the outstanding loan balance is less than two-thirds of the original loan amount.
Under Michigan's foreclosure by advertisement statute (MCL 600.3240), the standard redemption period after a sheriff's sale for a residential property is 6 months. However, the redemption period is extended to 12 months if the outstanding loan balance at the time of the sale exceeds two-thirds (66.67%) of the original loan amount. In this case, $95,000 is less than two-thirds of $200,000 (which would be approximately $133,333). Therefore, the standard 6-month redemption period applies. During this period, the homeowner may remain in possession and has the right to redeem by paying the full amount owed.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A freehold estate represents ownership of real property with an indefinite duration.
Joint tenancy is a form of co-ownership in which two or more persons hold equal, undivided interests in property with the right of survivorship. When one joint tenant dies, their interest automatically passes to the surviving joint tenants.
A leasehold estate grants the right to possess and use property for a defined period of time, without conferring ownership.
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