Governor Granholm recently signed into law Public Act 30 of 2009 amending Chapter 32 of the Revised Judicature Act of 1961 which affects Foreclosure of Mortgages by Advertisement. The newly enacted law which will take effect on July 5, 2009, establishes procedures under which a borrower would have to be given an opportunity to work out a modification of a mortgage loan on a principal residence before foreclosure proceedings could be commenced. The law prohibits a lender from commencing foreclosure proceedings by advertisement if the prescribed procedures had not been followed or if the parties had agreed to modify the loan and the borrower were not in default under the modified agreement.

The law outlines specific procedures to be followed by a foreclosing party and institutes a 90 day stay if the borrower requests a meeting to negotiate for a modified mortgage. The additional protections are limited if the borrower and the lender had previously agreed to modify the mortgage loan and the borrower did not comply with the modified loan terms for at least one year. The intent of the law is to curb or postpone the number of home foreclosure proceedings which result in reduced property value and loss of revenue to local units of government in terms of property taxes. A copy of the law can be viewed at http://www.legislature.mi.gov/documents/2009-2010/publicact/pdf/2009-PA-0030.pdf.   

- Richard V. Stokan, Jr.