I am very sorry for your situation. You must be feeling terriby helpless.
You have likely been receiving letters from your lender by now. Pay attention to the letters and call them to explain your situation. Ask them for help. Be prepared for frustration. At some point the lender will move to the next step in the process (each lender is different in their level of "patience"). In the next step, they will notify you that a "sheriff's sale" has been scheduled. It is on that date that the official foreclosure process begins. The lender will place the first "bid" at the sale; essentially, they buy the property from themselves. From that point in time, Michigan law requires that you be given 6 months (12 months if the property is 3+ acres) to bring your account up to date; this period is called the "redemption period." During that time you continue to live in the home but make no payments. Remember that during the 6-month redemption period you cannot be forced to move...do not let the lender convince you that you are required to vacate the property during that 6-month period. When the 6-month redemption period expires, you will be required to vacate the property. Failure to do so puts you at risk of being locked out of the house without your belongings.
Now, having said all of this, you have been given some good information in the other responses. Please do not just sit by and let the process happen to you. Try to get some help. A good place to start is with your local government or the Oakland County offices (assuming that you are located in Oakland County). At a minimum, enlist the services of a Realtor to help with a short sale. At least with a short sale you may be able to avoid some of the trauma and negative impact on your record that a foreclosure causes. (A short sale is a process of finding a buyer for your home likely at a price less than is owed and negotiating with the lender to accept the lesser amount. If done properly, you would then be forgiven the difference between that which is owed and the amount for which the house sells)
I wish you the best.
Amador C. Melgoza
Keller Williams Realty
35427 Dodge Park,Sterling Heights,MI 48312
If you are interested in learning about short sales, please do call or email me. I would like to learn more about your situation, the property, etc. and can advise you from there.
Feel free to use my Trulia profile for contact information, email me at Derek@DoorToDreams.com, or my office number is 248.851.4100 x132.
Thank you, and I hope we can connect soon.
Derek Bauer, Associate Broker / Realtor
Real Estate One