Redemption and Deficiency Judgments in Michigan

Yes. After a foreclosure sale by advertisement, the borrower (or heirs, or anyone with a recorded interest claiming under the borrower) can void the buyer's deed by paying the sale bid plus interest at the mortgage rate, the sheriff's fee, and certain taxes, insurance and association dues the buyer paid. For a mortgage signed on or after January 1, 1965, on a home of 1 to 4 units, the redemption period is 6 months if the amount claimed due when the foreclosure notice was given was more than 66-2/3% of the original loan; otherwise it is generally 1 year from the sale. It is 1 month for an abandoned 1-to-4-unit home (abandonment is presumed only after required notices and an affidavit), 6 months for commercial property or residential property over 4 units, and 1 year for agricultural property. The buyer must record an affidavit stating the exact amount needed to redeem and the redemption deadline. The redemption right can be cut off early if the buyer wins a court case for possession because the property is being damaged.

A lender may sue for a deficiency after a foreclosure sale. When the lender (or holder of the debt) bought the property at a foreclosure-by-advertisement sale, the borrower may defend by showing that the property was fairly worth the amount of the debt at the time of sale, or that the bid was substantially less than the property's true value; this defense can reduce or defeat the deficiency. This defense does not apply to court-ordered (judicial) foreclosure sales.