Could Money Remain After a Michigan Foreclosure Sale?

A foreclosure sale may end ownership of the property, but it does not always answer every financial question.

If the property sells for more than the amounts that must be paid from the proceeds, money may remain in some situations. Whether proceeds exist, who may have an interest, and how a claim must be made depend on the type of foreclosure and the facts involved.

The first question is:

Was this a mortgage foreclosure or a property-tax foreclosure?

Michigan uses different rules and procedures for each.

What Are Foreclosure Surplus or Remaining Proceeds?

A foreclosure sale produces a sale price. Certain debts, costs, liens, or other authorized amounts may then be paid from those proceeds.

If money remains after the applicable amounts are satisfied, it may be described as surplus proceeds, excess proceeds, or remaining proceeds, depending on the foreclosure type and the source discussing it.

The existence of proceeds does not automatically establish that a particular person is entitled to receive them. Ownership interests, liens, assignments, court procedures, notices, documentation, and deadlines may affect the result.

Path One: Mortgage-Foreclosure Surplus Proceeds

Michigan Compiled Laws § 600.3252 addresses surplus money remaining after a mortgage-foreclosure sale.

Under the statute, surplus remaining after satisfying the foreclosed mortgage and the costs and expenses of the foreclosure and sale may be paid on demand to the mortgagor, the mortgagor's legal representative, or assigns.

However, the process can become more complicated if another claimant files a verified written claim involving a subsequent mortgage or lien. In that situation, the money and claims may be filed with the circuit court, and the court may determine how the surplus should be distributed.

A former owner should not assume that the auction price minus the mortgage balance equals the amount available. The complete sale accounting and any additional claims or authorized amounts must be reviewed.

Questions to investigate include:

• What was the final foreclosure-sale price?
• What amount was required to satisfy the foreclosed mortgage?
• What foreclosure costs and expenses were paid?
• Were there junior mortgages, liens, judgments, assignments, or competing claims?
• Who conducted the sale or currently holds the proceeds?
• What documentation is required from the claimant?
• Has any money already been transferred to a court or another custodian?

No universal mortgage-foreclosure claim deadline is stated here because the applicable deadline must be verified for the exact procedure being discussed.

Path Two: Michigan Property-Tax Foreclosure Remaining Proceeds

Michigan property-tax foreclosure uses a different statutory process.

For applicable property transferred or sold after December 22, 2020, the Michigan Department of Treasury states that a person with a title or equity interest at the time of foreclosure may seek remaining proceeds if the property sold for more than the delinquent amount owed.

Michigan Compiled Laws § 211.78t establishes the statutory process.

For applicable recent foreclosures, a person intending to pursue remaining proceeds generally must submit Michigan Treasury Form 5743, Notice of Intention to Claim Interest in Foreclosure Sales Proceeds, to the appropriate Foreclosing Governmental Unit by July 1 following the effective date of the foreclosure.

Form 5743 states that:

• The notice must be notarized
• It must be delivered by certified mail with return receipt requested or by personal service
• Submitting the notice shows an intention to make a future claim
• Submitting Form 5743 is not itself the final claim for proceeds

After the governmental unit provides the applicable sale information and notice, an additional motion in the same circuit-court foreclosure proceeding may be required. MCL § 211.78t contains specific timing and procedural requirements, including an applicable February 1 through May 15 motion period in the circumstances described by the statute.

These dates are general statutory education only. The correct deadline must be verified using the foreclosure year, effective date, sale or transfer date, notice received, responsible governmental unit, and current law.

Filing Form 5743 alone does not complete a claim.

Older Property-Tax Foreclosures Require Separate Review

Do not assume that the current Form 5743 process automatically applies to every historical tax foreclosure.

Michigan Treasury publishes separate information concerning certain sales occurring before December 22, 2020. Historical claims may involve different forms, court decisions, notice requirements, statutes of limitation, or deadlines that have already passed.

Anyone investigating an older foreclosure should verify the applicable law and dates rather than relying on the current process. Outdated historical deadlines should not be treated as if they remain available today.

Four Things to Gather Before Asking About Possible Proceeds

Gather what is readily available before asking about possible proceeds:

Missing information does not prove that funds do or do not exist. It identifies what must be located and verified.

Warning Signs of a Surplus-Recovery Scam

Be cautious if someone:

• Guarantees that money is waiting
• Guarantees a specific recovery amount
• Pressures the owner to sign immediately
• Refuses to explain fees or compensation in writing
• Requests sensitive information before identifying the property and sale
• Claims to be a court, county, government agency, or attorney when they are not
• Demands an assignment or transfer without clearly explaining its effect
• Discourages independent legal review

Verify the organization independently and understand every agreement before signing.

How Maverick Integrity Group May Help

Maverick Integrity Group can help a former Michigan property owner organize available property and foreclosure-sale information, identify records that still need to be located, and discuss whether MIG's current surplus-recovery support may fit the situation.

Any available service, responsibilities, compensation, authorization, and limitations must be explained in a written agreement before work begins.

MIG does not determine legal entitlement, issue court orders, control government records, hold public authority, or guarantee that proceeds exist or will be recovered.

MIG is not a law firm, government agency, county treasurer, court, mortgage servicer, or substitute for independent legal or tax advice.

Important Information

This article provides general educational information and is not legal, tax, financial, lending, title, foreclosure, or real-estate advice.

Foreclosure procedures, notices, deadlines, claimant rights, liens, and available proceeds depend on the specific facts and may change.

Readers should verify information with the mortgage-sale representative, Foreclosing Governmental Unit, circuit-court clerk, county treasurer, qualified Michigan attorney, tax professional, title professional, or other appropriate authority.