Changes to Mortgage Foreclosure Law in Michigan
In July 2009, Michigan Governor Jennifer Granholm signed into effect several laws modifying the rights of Michigan homeowners regarding foreclosure and loan modification. What are these changes to Michigan foreclosure law?
The main change to foreclosure process in Michigan is that mortgage holders must now comply with a 90 day pre-foreclosure process before they are allowed to foreclose a residential mortgage by advertisement. New requirements include the following:
- The mortgage holder must inform the borrower in writing before foreclosing on a mortgage by advertisement. This notice must include a list of approved housing counselors.
- The borrower may request a meeting with a designated representative of the mortgage holder in order to work out loan modification within 14 days of this notice. In this case, the foreclosure may not begin until 90 days after notice has been mailed.
- In the event a borrower does not contact the lender within 14 days, the lender may immediately proceed with a foreclosure by advertisement.
- A borrower interested in negotiating a loan modification must contact a housing counselor.
- The mortgage holder is required to review the borrowers’ finances in order to determine if a loan modification is feasible. The mortgage company may include several features in the loan modification including a reduced interest rate or extension of the loan.
- If the borrower is eligible for such a loan modification, the mortgage holder may not foreclose by advertisement. They may, however, foreclose by judicial action.
- If the borrower does not meet the requirements of a loan modification, the lender may proceed with a foreclosure by advertisement or the “posting” method.
At any time in the process before a sale, you are able to file a Chapter 13 reorganization to stop the foreclosure proceedings and set up repayment terms with your lender. The Chapter 13 will:
- Legally stop the foreclosure sale or pre-foreclosure process
- Initiate repayment terms with the mortgage lenders over a 36 -60 month time period (0% interest repayment for the arrearages)
- Remove a second mortgage or home equity loan
- Reduce and defer other unsecured debts in order to provide room in the budget to bring the mortgage current
- Allow a proposed loan modification through the Chapter 13 plan
Protecting tenants
In addition to these changes in Michigan foreclosure laws, the federal government has recently signed laws protecting tenants leasing foreclosed homes.
The Protecting Tenants at Foreclosure Act of 2009 requires purchasers of foreclosed homes to honor existing legitimate leases with tenants living on the property for the duration of that lease unless the purchaser plans on occupying the home themselves. In the latter case, the tenant must be allowed to remain on the property for at least 90 days following receipt of notice to vacate.
We are a helping hand
Acclaim Legal Services can provide the fast, knowledgeable foreclosure experience that you need to answer any questions you may have regarding bank foreclosure law in Michigan. Our bankruptcy attorneys are experienced in the new Michigan Foreclosure laws and are available to educate you on your available options and develop a plan to deal with your foreclosure situation.
We offer free in-office or phone consultations to review your personal circumstances, analyze your situation and advise you on the best course of action. We specialize in bankruptcy law, debt resolution, foreclosure prevention and credit repair. We have offices in
