Michigan “Lifeline Law”

You may have been hearing a lot about the new Michigan foreclosure “lifeline law”, and you may be wondering, what does it really mean?

Currently, Michigan is sixth in the nation for foreclosures; clearly something needed to change. But is this new legislation really the answer?

If you’ve missed a few mortgage payments recently, your lender may have started the foreclosure process. What this now means is that you should receive two letters notifying you of your right to delay the foreclosure 90 days by working with a housing counselor. However, you must contact a counseling agency within 14 days or your rights will be waived.

Should you choose to meet with a counselor, you will need to have income information, including your 2008 tax return and year-to-date proof of your income. Each lender or investor will have their own guidelines which will apply to your mortgage. However, even if you qualify for a loan modification (less than 5% of applicants do, so don’t hold your breath), your lender may choose not to agree to the proposed modification. This means that they may continue the foreclosure proceedings.

If this situation applies to you, it is imperative for you to know your options and to act immediately. To find a lender-approved counselor, you may contact the Michigan State Housing Development Authority at 866-946-7432, or the “Hope Hotline” at 888-995-HOPE.

If you have been turned down for a loan modification and feel you have no other options, a short sale may be right for you. Of course short sales are our specialty and are certainly much better than a Michigan foreclosure. The catch of course is that if we don’t start soon enough, it may be too late, so call as as soon as you are out of options.


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