The package of bills (HB 4765, HB4766, SB 380 and SB383) which has since been signed into Law on July 3rd by Michigan‘s Governor is designed to harm homeowners on both the front end and the back end of the foreclosure process by repealing Michigan’s pre-foreclosure negotiation law and by making it possible for banks to eliminate Michigan’s longstanding 6-month redemption period.
By repealing Michigan’s pre-foreclosure negotiation law, homeowners are forced into an increasingly vulnerable position of falling victim to widespread foreclosure scams. Under the new policy, lender-designated agents are no longer required to meet with homeowners to avoid a foreclosure, and any person regardless of their qualifications can perform the role of a certified foreclosure counselor or legal aid attorney.
According to Detroit Free Press, by eliminating Michigan’s longstanding 6-month redemption period, at-risk homeowners could lose their homes immediately if the bank chooses to evict them.
“This means if a homeowner facing foreclosure has a leaky roof and the bank determines that it has the potential to do ‘imminent’ damage, the homeowner loses the redemption period and along with it, the chance to challenge an illegal or fraudulent foreclosure, come up with the money to save the home, sell it on a short sale or find a safe affordable new place to live. Instead they face immediate eviction.”
Because the laws definition of ‘damage’ is both broad and ambiguous, if the bank finds so much as a broken hinge or a closed off window, they could immediately move to evict the homeowner. As outlined in SB 383, a bank representative has the authority to stop by a home unannounced to inspect both the exterior and interior of the home for any possible damages, and if denied access by the homeowner, the bank has license to disregard the redemption period and repossess the property immediately.
SEE DETAILS OF THE NEW LAW
NEWS ALERT: Michigan Governor Signs Foreclosure Bills HB 4765, HB 4766, SB 380, and SB 383
The following four Bills affecting Michigan’s non-judicial foreclosure process were signed into law by the Governor on July 3rd.
House Bill 4765 extends the sunset date for MCL §§ 600.3205a-3205d of the Michigan non-judicial foreclosure statute to January 9, 2014. Previously set to expire on June 30, 2013, these sections of the statute include the mandatory 90-day hold requiring loan modification mediations to occur prior to the commencement of non-judicial foreclosure actions of homestead properties where mortgagors “opt-in”. The requirements set forth in MCL §§ 600.3205a-3205d will have to be complied with through June 30, 2014, in regard to any non-judicial foreclosures for which the notice was published prior to January 10, 2014.
SB 380 and HB 4766
Senate Bill 380 and House Bill 4766 create MCL § 600.3206, which was designed to replace the current sections of the Michigan non-judicial foreclosure statute that dictate when mandatory mediations aimed at modifying loans are to occur. Effective January 10, 2014, if the servicer has signed a consent judgment in United States of America, et al. v. Bank of America Corp., et al., then that servicer will be required to send notice (similar to Michigan’s current pre-foreclosure mediation notice) to the mortgagor, allowing the mortgagor the opportunity to “opt-in” to a loan workout meeting prior to commencement of foreclosure proceedings. Servicers that are not parties to the consent judgment will no longer be required to postpone commencement of non-judicial foreclosures to allow for mediations to occur on homestead properties where mortgagors “opt-in.”
Senate Bill 383 adds a provision to MCL § 600.3240, which is the section of Michigan’s non-judicial foreclosure statute dictating post-sale redemption periods. This new provision grants the foreclosure sale purchaser the right to inspect the exterior and interior of the structures after the foreclosure sale as well as periodically during the redemption period. If inspection is unreasonably refused or property damage has occurred or is believed to be imminent, the purchaser may immediately commence summary proceedings to obtain possession of the property. The statute provides examples of what would be considered damage, which include failure to comply with local property maintenance ordinances, broken doors and windows, accumulated trash, stripped plumbing, etc. If a judgment for possession is granted in favor of the purchaser, the redemption period will be extinguished. These changes become effective January 10, 2014.
If you find yourself in an unfortunate situation of losing or about to your home to wrongful fraudulent foreclosure, visit: http://www.fightforeclosure.net