May 21, 2009
Homeowners, lenders will have extra time to work out new deal
LANSING - Governor Jennifer M. Granholm has signed legislation that helps protect homeowners from foreclosure by providing an extra 90 days for them to work with their lender on modifying their mortgage loan.
"We are committed to protecting Michigan families and helping them keep their homes," said Granholm, who called for similar legislation in her 2009 State of the State address. "This new law delivers on that commitment by providing homeowners extra time and assistance to save their home and preserve their American Dream."
The new law takes effect in 45 days and:
- freezes foreclosure proceedings for 90 days for homeowners who commit to work with their lender on modifying their mortgage loan;
- requires a lender to notify the homeowner in writing that the mortgage is in default and who to contact;
- stipulates that for help in modifying the mortgage loan, the homeowner must contact a housing counselor, available through the Michigan State Housing Development Authority.
Lenders must then attempt to work out a modification of the mortgage loan. This could be achieved through various means, such as lowering the interest rate or lengthening the life of the loan. If a homeowner and lender agree on the loan modification, foreclosure is avoided if the homeowner abides by the new agreement.
The signed bills are House Bill 4453 (Public Act 29 of 2009), sponsored by State Representative Shanelle Jackson (D-Detroit); House Bill 4454 (Public Act 30 of 2009), sponsored by State Representative Andy Coulouris (D-Saginaw), and House Bill 4455 (Public Act 31 of 2009), sponsored by State Representative Bert Johnson (D-Detroit).
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