Foreclosure Law Update

Amendments to Michigan’s Foreclosure by Advertisement statutes go into effect July 5, 2009 and expire two years later. The primary change is a 90-day pre-foreclosure process which is meant to help the borrower avoid foreclosure.

Before starting a foreclosure proceeding for property, the mortgage holder must serve the borrower with a notice explaining the borrower’s rights and opportunity to avoid foreclosure. Some of the information that must be included in the notice is: the name of the agent for the mortgage holder who is authorized to modify the loan; a list of housing counselors prepared by HUD or the Michigan state Housing Development Authority; the telephone number for the State Bar of Michigan’s lawyer referral service and the local legal aid office serving the area where the property is located.

Within 7 days of serving this notice, the mortgage holder must also publish a notice informing the borrower of his/her rights.

The borrower has 14 days from receipt of the notice if he/she wants to contact a housing counselor to assist in the negotiation of a modification to the mortgage. If the parties are unable to reach an agreement through the housing counselor, the mortgage holder must work with the borrower to determine whether the borrower qualifies for loan modification. The statute outlines the requirements of a loan modification program. This program targets the ratio of the borrower’s housing-related debt to the borrower’s gross income of 38% or less.

If the borrower requests a meeting with the mortgage holder, foreclosure procedures can not commence until 90 days after the notice was served. If the mortgage holder does not comply with these new procedures, the borrower can file an action in circuit court to convert the foreclosure proceedings to a judicial foreclosure.

If you or anyone you know is at risk for foreclosure, the following websites may be helpful:
www.Miforeclosure.mplp.org/
www.cedam.info/foreclsoure.htm
www.mshda.info/counseling_search/

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This publication is for general information only and is not intended as formal legal advice. If you have any questions or need assistance, please contact Curtis & Curtis, P.C.

Curtis & Curtis, P.C. is a full service law firm located in Jackson, Michigan providing superior legal services and advice to individuals, families and businesses throughout mid-Michigan since 1901.