AGAINST FORECLOSURE
Pre-foreclosure negotiation law set to take effect on July 5, 2009
Lansing, MI — Beginning July 5, 2009, A new Michigan law will go into effect that requires all mortgage lenders to work with distressed homeowners.
The new pre-foreclosure negotiation law requires every lender and servicer to work with a homeowner before foreclosure proceedings can be commenced. Specifically, the new law requires mortgage lenders to send homeowners that have missed one or more payment two letters—one by regular mail and one by certified mail—notifying homeowners of their right to work with a nonprofit housing counseling and their lender to try and save their home.
The law contains a strict timetable that starts on the day the letters are mailed to the homeowner. The homeowner has just 14 days to contact a certified, non-profit housing counselor or their local legal aid office. Lists of counseling agencies certified by state and federal government agencies and free legal aid providers must be included in the letter and can also be found by contacting:
HOPE Hotline: 888-995-HOPE (4673)
State of Michigan Save the Dream: 866-946-7432
United Way: 2-1-1
Michigan Foreclosure Prevention Project: http://miforeclosure.mplp.org
After contacting a housing counselor, the law requires the lender to work in good faith with the homeowner and housing counselor to determine if the homeowner is eligible for a loan modification. If the lender does not act in good faith or does not offer a loan modification to an eligible homeowner, the borrower can file a legal action to prevent the foreclosure.
Homeowners need to beware of scams. By calling a government-certified, non-profit housing counseling agency or a local legal aid office, homeowners can avoid foreclosure rescue scam-artists that swindle money from homeowners and take little or no action to actually save the home. Homeowners should never pay a fee in exchange for help working with their lender.
