Michigan Non-judicial Foreclosure/Sheriff's sale from second lien position

[Foreclosure Guy]

In the state of Michigan, can you force a Sheriff's sale through a non-judiical foreclosure as a second position lien holder? If so, what steps (if any) are required to address the first lien position holder? Thank you.

 

[Zigner]

This will not be a DIY project. Speak to a professional.

 

[quincy]

In the state of Michigan, can you force a Sheriff's sale through a non-judiical foreclosure as a second position lien holder? If so, what steps (if any) are required to address the first lien position holder? Thank you.

Does the “second position lien holder” have a contract that has a “power of sale” clause?

If the second position lien holder has a contract with a power of sale clause then, yes, the second position lien holder can force the sale of the property through the regular foreclosure process but the first lien holder must have their lien satisfied from the proceeds of the sale before the second lien holder can collect on their own lien.

Because sheriff’s auctions often will not result in bids high enough to cover both a first and second lien, the second lien holder may walk away from a sheriff’s auction with nothing.

 

[zddoodah]

can [a second position lienholder] force a Sheriff's sale through a non-judiical foreclosure?

In general, yes.

If so, what steps (if any) are required to address the first lien position holder?

Not sure exactly what you're asking, but the sale will have to generate enough money to pay off both the first and second liens (either that or the person who buys the property will take title subject to the first lien). Note also that, foreclosure by a junior lienholder likely constitutes and event of default under the first lienholder's loan agreement. Of course, I'm assuming that at least the first lien is a mortgage lien. If that assumption isn't correct, then the answer may change because, of course, the facts matter and you provided virtually none.

 

[quincy]

Here is a link to Michigan’s laws on foreclosure of mortgages by advertisement:

https://www.legislature.mi.gov/laws/MCL?objectName=MCL-236-1961-32

As a note, those who have second liens or judgment liens (not mortgage liens) on a foreclosed property, that are not satisfied through the sale of the property, will no longer have their liens after the sale but the debts owed are not eliminated. The lien holders can still attempt to collect what they’re owed through other means.