New Michigan Foreclosure Laws Effective July 5, 2009
Mortgages
New Michigan Foreclosure Laws Effective July 5, 2009
By Charles R. Harroun Attorney at Law
Jul 6, 2009, 06:43
The New Michigan Foreclosure Laws give Michigan homeowners approaching foreclosure a 90-day window to remain in their “primary residence” and potentially work out a resolution with their lender. These new laws are intended to help financially distressed homeowners.
The traditional 30-day notice of acceleration is replaced with a series of notice information as provided by the new law.
The new legislation allows homeowners delay foreclosure proceedings on their “primary residence” for 90 days after the lender’s notice of foreclosure is sent, if the borrower(s) request a meeting with a housing counselor and the lender.
Lenders refusing to rework loans for those qualified homeowners would have to proceed with a judicial foreclosure.
Only homeowners meeting certain financial standards will qualify for modified mortgage payments.
Counselors for borrower(s) are available without charge through the Michigan State Housing Development Authority and the U.S. Department of Housing and Urban Development.
It is important to note, however, that Sec. 3205a(1) of the new Michigan Foreclosure Law states the new rules apply only to the debtors “principal residence” exempt from tax under section 7cc of the general property tax act.
Thus, mortgages held on vacation/second homes, rental property and vacant land may be be foreclosed under the regular 30-day acceleration law, without the necessity to send the new notice requirements or permit the borrower to engage the 90-day delay by requesting a meeting to discuss a loan modification.
Governor Jennifer Granholm previously signed the new Michigan laws modifying foreclosure and loan modification rights, which were effective Sunday, July 5, 2009. Download a free copy of the New Michigan Foreclosure Laws here.