Foreclosure is the legal process effected through the court system in which a mortgagee (lender—often a bank) terminates a mortgagor’s (borrower’s) interest in the real property in which the mortgagor gave the mortgagee a security interest (a lien) as collateral for the loan used to purchase the property.

Foreclosure generally occurs when a homeowner defaults and fails to make mortgage payments as required by the loan agreement (promissory note).

Foreclosure allows the lender to seize the property, remove the homeowner, and sell the home—all of which are legal remedies the mortgagor and mortgagee agreed to in the mortgage contract.

In Michigan, foreclosure is a legal process that allows a lender to terminate a borrower's interest in a property due to default on mortgage payments. Michigan law permits both judicial and non-judicial foreclosure processes. In a judicial foreclosure, the lender must file a lawsuit and obtain a court order to foreclose on the property. This process involves the court system and can take a significant amount of time. Non-judicial foreclosure, on the other hand, does not require court intervention if the mortgage contains a power of sale clause. This clause allows the lender to sell the property at a public auction after providing the borrower with the required notice of default and the opportunity to cure the default. The borrower is typically given a redemption period after the sale, during which they can reclaim the property by paying the full sale price plus additional costs. It's important for homeowners facing foreclosure in Michigan to understand their rights and obligations under the state's foreclosure laws, and they may wish to consult with an attorney for guidance specific to their situation.