Reviewing the Bid in a Non-Judicial Michigan Foreclosure

When computing a bid for an upcoming non-judicial foreclosure sale various factors are to be considered, one of which is the allowable/ recoverable amount of attorney fees that can be added. Michigan, within MCL 600.2431, maintains a statutory limitation that can be overlooked if the foreclosing lender/ servicer and local counsel are not conscious of its most basic provision. An attorney’s fee in excess of $75.00 cannot be added to the foreclosure bid, where the minimum bid is $5,000.00 or more. While there is on-going discussion of how MCL 600.2431 is to be applied to pre-foreclosure reinstatements and payoffs the statute is clear as to the amount that may be lawfully added to the minimum bid submitted for foreclosure sale.

Another bid computation issue that is often misunderstood is the application of anticipated post foreclosure expenses.  Only those costs which have been expended as of the date of the foreclosure sale are to be added to the bid. MCL 600.3240 allows for the common expenses paid subsequent to foreclosure (during the redemption period), such as taxes, insurance and condominium dues, to be lawfully added to the redemption quote. Thus a mechanism exists for the foreclosing lender to be repaid for its post-foreclosure expenses whereas there is not any statutory support for non-accrued expenses to be prospectively added to the foreclosure bid.

Please address any questions regarding the above article to the undersigned.

Caleb Shureb, Esq.
Orlans PC
Cshureb@orlans.com