COMPREHENSIVE LOSS MITIGATION SERVICES

The Michigan Legislature recently enacted House Bill No. 4455.  The purpose of this legislation is a further attempt to stem the tide of foreclosures and allow borrower’s to modify their current loan terms in our state.  Much of the bill parallels the federal legislation known as the Home Affordability Act. 

There are two avenues that a secured creditor can pursue in terms of recovering their debt by a foreclosure action in Michigan.  One is by judicial process and the other by statutory process.  The judicial process requires a court action and, by virtue of the fact that it is a court process, is generally lengthier and more expensive.  Most lenders in Michigan pursue a statutory process.  This process requires that the lender publish its intention to foreclose in a local newspaper that circulates in the county where the property is located (Oakland County Legal News).  That published notice contains a Sheriff’s sale date, which is when the auction is scheduled to occur.  Once this happens, the borrower/owner has a redemption right (occupied, primary single family residence) of six months in which they can either redeem (purchase the property from the bank for the amount bid by the bank at the sale), or attempt to sell the property for what is owed, or have the bank agree to accept less (short sale).  

This act provides for a 90day period in which a foreclosure may not be initiated by the lender, and certain activities (meant to precipitate a loan modification) must occur.  If not, the lender may be forced to pursue a judicial foreclosure action. 

 

For further information, or clarification regarding this Act and other nuances pertaining to short sales and loan modifications, please contact Loss Mitigation Consulting Services of MI, LLC. at 248.505.2509, or ellen@lmcsm.com.