Colli Real Estate

Michigan seeks new laws Slow Foreclosures

June 18, 2009 – DETROIT, MI – On May 20, Governor Granholm signed new laws in the direction that will put more pressure on lenders to develop loan modifications instead of just negative.

New Law, PA 29, PA30 & PA 31 enter into force on July 5th and force lenders to complete the steps, and multiple seizures before. It is interesting to note that the date effect falls just after Independence Day.

The new laws only apply to foreclosures commenced after July 5 and only in real estate is the main home mortgage lender. The laws also expire in two years. State Legislators seem fairly optimistic about the housing crisis is over by then. Very probably, there is nobody who has a mortgage not foreclosed on your mortgage or had time by then.

Creditors must give written notice to a borrower defaults, providing the name and telephone number of a real person that the borrower can talk. In addition, this person must have the authority to negotiate and approve a loan modification. Anyone who has dealt with customer service from a lender will tell you how frustrating it is to get someone on the phone that can make a decision. Therefore, this is great news.

Lenders are also required to send a borrower defaulting a list of housing counselors approved by the State and gives borrowers the right to require the authority a person to comply with the lender and borrower consultant to develop a loan modification. Once the borrower for this meeting exclusion is on hold for 90 days.

The laws essentially mimic "Obama Making Affordable Home" program demand related to housing debt of a borrower is not more that 38% of its gross monthly income. It also shows how to reach the figure of 38% – reduction of interest rates as low as 3% for at least 5 years and / or extend the term loan to a maximum of 40 years and / or defer up to 20% of the principal balance until the end of the loan term, the future sale or refinance.

If the borrower is eligible under this scheme, but the lender refuses to approve modifying the loan, the lender must go through a judicial foreclosure. This means they must take the borrower to the court, a long and costly effort. In other states where it requires judicial foreclosure, which can easily take 18 months for that to happen. This is a great shame for the lenders and should forcing the majority to approve a loan modification.

The new laws have been written that the lenders chartered by the federal government can not claim "federal preemption" and ignore the laws of the State. A great move by the state legislators.

The only problem is that laws do not apply to FNMA, FHLMC, FHA and VA mortgages. These loans are expected to continue to change Obama plan ready, but the plan is voluntary. Therefore, owners may still be in trouble if they have one of these loans.

Also, counselors, there is not enough available to meet with representatives of borrowers and creditors. It can work in a borrower if, as lenders prefer expect that the advisor is available for pursing the process of judicial execution.

I would like to see many mortgage figures meet the requirements of these new laws. It is estimated that FNMA / FHLMC currently controls more than two thirds of loans in this country. Adding the FHA and VA probably pushes that number closer to 75% or more. This means that these new laws can help only 1 in 4 mortgage borrowers.

About the Author

Drew Sygit writes and speaks about the mortgage & real estate industries. He holds mortgage industry designations CMPS, CMC, CRMS, CMLO, CALO, has an MBA and is an approved industry instructor. He’s presented, spoken and/or written for HUD, the Financial Planning Association, Financial Planners Association of Michigan, Michigan Association of CPA’s, Institute of Continuing Legal Education, Oakland Real Estate Investors Association, North Oakland County Board of Realtors and numerous industry publications. He also publishes his own blog: http://drewsmortgagenews.blogspot.com. He can be reached at dsygit@TheLendingEdge.com.

John mccain & Herbert Hoover

Avoid Foreclosure $20.5 Avoid Foreclosure

The Foreclosure Game $29.95 The Foreclosure Game

The Foreclosure $21.44 No Synopsis Available

FORECLOSURE $13.5 If you are in danger of losing your home, it””s important to remember that you are not alone. In these uncertain economic times, financial problems have affected virtually everyone…

Tags: No Comments