The Michigan Senate yesterday unanimously approved a measure that would give struggling homeowners in the state more time to negotiate with their mortgage lenders before losing their homes to foreclosure.
Under the new legislation, the lending institution that holds the mortgage will be required to send a written notice to borrowers before foreclosing on a principal residence.
In turn, if the homeowner agrees to work with the lender in question, the two parties will have 90 days to participate in “pre-foreclosure meetings” to determine an agreeable solution.
“Having one of the highest foreclosure rates in the nation, it was important for the Legislature to approve these measures to help struggling homeowners,” said Senator Randy Richardville.
“We have developed a plan that will help residents who want to stay in their homes and are willing to take appropriate steps to do so.”
The House Bills, 4453 through 4455, revise Michigan’s current “foreclosure by advertisement” process, which requires the lender to post a notice of foreclosure sale in a local newspaper, without contacting the homeowner directly.
Ideally, borrowers with hope of retaining their homes will be able to use the extra time to iron out a sustainable loan modification with their lender or loan servicer.
Unfortunately, similar legislation has done little but slow the inevitable, as evidenced by SB1137 in California, which simply delayed foreclosure filings.