Michigan Surplus Funds: A Recovery Agent's Field Guide

Checked against the official state code and government office pages in October 2026.

Michigan law recognizes mortgage-surplus assignments. The mortgage statute names the mortgagor's "assigns" as people who may receive the surplus. It also lets an agent or attorney provide the required verification for a later mortgage or lien claim.

For tax-sale proceeds, claimants must follow the notice and court-motion process in MCL 211.78t. The statute doesn't set a helper fee cap or say recovery agreements can't be enforced. We didn't find mortgage-surplus helper fees or agreements spelled out in the state code or on official sites. Treat this as a gray area.

Helpers do have a legal boundary. MCL 600.916 bars a person from practicing law or leading others to believe they can practice law. For tax-sale claims, some offices, like the Wayne County Treasurer's Office, describe a process where the claimant files a circuit court motion. That office page doesn't say the claimant must have an attorney.

Michigan allows foreclosure by advertisement when a mortgage has a power of sale. It also allows judicial foreclosure through a court action. The Michigan government says judicial foreclosure requires the lender to take the borrower to court and is uncommon. Foreclosure by advertisement is a power-of-sale process without court involvement (Michigan.gov, Home Foreclosure). The court materials don't name the officer who conducts either type of sale. Michigan's foreclosure benchbook describes both routes.

After the mortgage debt and sale costs are paid, the sale officer first holds the surplus. Under MCL 600.3252, the surplus is paid on demand to the mortgagor, their legal representatives, or assigns. But a claimant can file a claim for a later mortgage or lien first. The claim must have the required verification.

If that happens, the sale officer sends the surplus and claim to the circuit court clerk. Interested people may ask the court to take proofs. The court addresses lien claims by priority. Any remainder goes to the mortgagor or their representatives or assigns. The court may decide competing claims, as described in In re $55,336.17 Surplus Funds, 319 Mich. App. 501 (2017)_rptr_43o-331880-final-i.pdf).

The mortgage statute sets no number of days or years for a lien claimant. The claim must reach the sale officer before the surplus is paid over. The mortgagor or an assign may demand payment. The statute doesn't explain where money goes if nobody claims it.

This process applies to qualifying property transferred or sold after July 17, 2020. A claimant seeking remaining proceeds must notify the foreclosing governmental unit by July 1 immediately after the foreclosure's effective date. The unit sends notice to claimants who gave notice. That notice includes information about any remaining proceeds. After receiving the required notice, a claimant may file a motion in the same foreclosure case.

The motion period starts February 1 after the sale or transfer and ends May 15. The claimant must explain a pre-foreclosure interest that wasn't transferred or divested. The circuit court orders payment of any applicable remaining proceeds. The foreclosing governmental unit must pay amounts ordered within 21 days. A former owner with a qualifying interest may have a claim. The required notice and court motion still apply.

• The mortgage-surplus rules don't name the officer who conducts each sale. Check the sale documents or ask the court handling the foreclosure.
• The tax-sale statute doesn't say where proceeds are held before a court order or where they go if nobody claims them. Ask the foreclosing governmental unit.
• The tax-sale statute doesn't explain whether an agent, assignee, or attorney may file for a claimant. Ask the circuit court or a licensed attorney before acting for someone else.
• We didn't find mortgage-surplus helper fees or agreements spelled out in the state code or on official sites. Treat this as a gray area.

I've been recovering surplus funds since 2013. That's over 2,000 cases and more than $100 million recovered for foreclosure victims across the country. I know these claims can feel stressful for families. Clear steps and careful communication matter. Start by confirming the sale type and the right office. Then check the deadline before discussing any agreement.

If you want to learn how this business actually works, join the free Surplus Funds Masterclass at surplusfunds.ai, or join the free Surplus Funds Collective community on Skool at skool.com/surplusfunds.

This guide is education, not legal advice. Laws change, so check the official statute and talk to a licensed attorney in your state before you act.