1. File a complaint for foreclosure against the purchasers
and any other parties having an interest in the property. This is filed in the Circuit
Court in the County where the property is located. (Prior to filing the Complaint, you
should also order a title commitment to determine the status of legal title to the
property. Any parties to whom the vendees may have given an interest must be joined in the
suit).
2. The Defendants may file an answer raising any defenses
which they may have within 28 days of being served. If they do not do so, a default will
be entered and you would proceed to take a default judgment against them.
3. A hearing or hearings are held and the judge ultimately
decides whether judgment of sale should be ordered. The Judge has discretion to allow
vendees to bring the contract current under some circumstances.
4. Once a judgment of sale is entered which contains the
full amount owed on the land contract including principal, interest, costs and expenses
(actual attorney fees are not included in the judgment), the property can be sold
at a sheriff's sale. The judgment may also contain various things such as an "upset
price" which is the minimum amount that the property can be sold for.
5. According to Michigan statute, the property can not be
sold until three (3) months have passed from the entry of the judgment of sale. This is
apparently to allow the purchasers to pay off all monies owed before the expenses of sale
are incurred.
6. During the three (3) month waiting period, a notice
describing the property, place of sale and date and time of sale must be posted at three
(3) locations in the county. This notice must also be published in a local newspaper as
required by statute.
7. Assuming purchasers do not pay all monies owed prior to
the sale, the sheriff conducts a public sale and accepts all bids made on the property.
The sheriff accepts the highest bid which must be paid to him at the sale. You may bid at
the sale as vendor and if your bid is the highest you need only pay what your bid exceeds
the judgment amount, including sale costs, etc. Of course, most vendors only bid the
judgment amount and, usually, the vendor is the only bidder.
8. The sheriff then issues what is called a sheriff's deed
to the property which must be recorded at the Register of Deeds office within 20 days of
the sale. This deed identifies the parties to the action, the date of the land contract,
when and where it was
recorded, a description of the property, and when the deed
becomes operative. This deed will become operative six (6) months after the sale according
to statute.
9. After the sale, an Order Confirming the Sale must be
presented to the judge for signing. This order acknowledges that the property was sold, to
whom and the price. Once signed, the order is recorded at the Register of Deeds.
10. During the six (6) months redemption period before the
deed becomes operative, the vendors or someone on their behalf, may "redeem" the
property by paying all monies owed including the costs of the sale. This money may be paid
to the purchaser at the sale or to the Register of Deeds. [If additional monies for taxes
or insurance are paid by a purchaser after the sale, they should file an Affidavit with
the Register of Deeds stating what the payment was for and include a receipt. These
amounts are then added to the redemption amount and must be paid in order to redeem.]
Should redemption occur, the deed becomes void.
11. If someone other than you purchases the property at
the sale, you are entitled to the judgment amount including the costs of sale at that
time. If you bid and are the highest bidder, one of two things will occur. If vendees
redeem, you will be paid the judgment amount plus costs incurred. If they do not redeem,
you will receive title to the property at the end of the six (6) months.
