Senate approves legislation to help homeowners facing foreclosure stay in their homes

LANSING, MI – April 03, 2009 – (RealEstateRama) — The state Senate today approved legislation that would help Michigan homeowners who are facing foreclosure, said Sen. Randy Richardville, who voted for the measures.

“Michigan residents are dealing with the worst unemployment rate in the nation and one of the highest foreclosure rates,” said Richardville, R-Monroe.  “As chair of the Senate Banking and Financial Institutions Committee, I have been committed to helping homeowners during these difficult economic times.  We have developed a plan that will help struggling residents who are willing to work with their mortgage provider to do just that and stay in their homes.”

House Bills 4453 through 4455 would revise Michigan’s “foreclosure by advertisement” process to encourage greater communication and negotiation between lenders and borrowers.

Under the legislation, the lending institution that holds the home mortgage in question would be required to send a written notice to borrowers before foreclosing on a principal residence.  If a homeowner decides to work with the lender, the two parties would have 90 days to participate in “pre-foreclosure” meetings and develop an agreeable solution.

“Although many lenders are already working directly with homeowners, we want to encourage all lenders and borrowers to work together more,” Richardville said.  “Better communication and cooperation among the two groups could help reduce foreclosures in Michigan.  I will continue to work with members of the House to move this important legislation forward.”

Richardville said the Senate Banking and Financial Institutions Committee has made helping homeowners facing foreclosure its top priority this term.

The committee heard testimony Wednesday from the Southeast Michigan Regional Foreclosure Intervention and Neighborhood Stabilization Collaborative.  The group of 40 organizations, led by the United Way, is working to prevent foreclosures, provide an infrastructure to help stabilize neighborhoods, and help homeowners at every stage of the foreclosure cycle.

Richardville has sponsored several mortgage reform measures, including legislation to establish registration procedures for mortgage loan officers, prevent appraiser coercion, and help homeowners qualify for affordable loans, all of which were signed into law last term.

House Bills 4453-4455 now return to the state House for further consideration.