Governor Signs Foreclosure Package: Bills would give additional time for homeowners facing foreclosure to work with lenders

May 26, 2009 – (RealEstateRama) — Legislation to give homeowners on who are on the brink of losing their home a 90-day period to work out a payment plan with their lending institution has been signed by the Governor. House Bills 4453-4455, now Public Acts 29, 30, and 31 of 2009, would allow consumers who are on the brink of foreclosure a 90-day period to attempt a loan modification plan.

Further provisions of the legislation would require the lending institution to provide the borrower with written notice of the reason for default, information on the mortgage holder including the name, address, phone number, and an assigned contact with the mortgage holder. If an agreement is reached with the mortgage holder, the loan will not be foreclosed upon if the borrower is able to abide by the terms of the agreement. Additionally, language was reinserted into the bill that gives homeowners the right to take their case to court if a lender does not cooperate on a loan modification plan. This legislation further stipulates that a borrower would not qualify for this program if they qualify for President Obama’s Federal Loan Modification Program. While the MAR fully supports keeping homeowners in their homes, the MAR believes that the judicial aspect of this legislation that was reinserted may clog up the judicial system, thus “dragging” the process out and increasing costs. However, given the increasing number of foreclosures in this state, these bills are a big step in keeping Michigan citizens in their homes.