Michigan foreclosure bills would give banks the upper hand On Wednesday, the House Financial Services Committee passed a package of foreclosure bills that will set Michigan back decades in its efforts to prevent foreclosures and the damage they cause to families, neighborhoods, communities and our still fragile economy. Together, HB 4765, HB4766, SB 380 and SB383 dismantle what has proven for years to be a fair, well-balanced and effective foreclosure policy and process. This package hurts homeowners on the front end of that process by repealing Michigan’s pre-foreclosure negotiation law and on the back end by making it possible for banks to eliminate Michigan’s longstanding 6-month redemption period if they decide a homeowner’s property is merely in need of repair. By repealing Michigan’s pre-foreclosure negotiation law effective in 2014, with the exception of five banks, we will no longer require that a lender-designated agent with the authority to modify a loan meet with the homeowner to avoid a foreclosure. We would also allow anyone — regardless of their expertise or certification — to perform the role of a certified foreclosure counselor or legal aid attorney, making homeowners even more vulnerable to the scams that are all too prevalent in our state. On the back end of the process, SB 383 would result in the potential of Michigan’s longstanding 6-month redemption period being totally eliminated for tens of thousands of at-risk homeowners who would lose their homes immediately as a result of the bill’s very broad, loose and vague definitions of damage — definitions that would be left open to the interpretation of the banks. Specifically, this bill gives the banks the authority to shorten or eliminate redemption periods altogether whenever they decide that a property or any ancillary structure needs repairs. Whether the damage is past, current or anticipated, they would have the authority to immediately proceed to court to evict the homeowner. 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. Based on the broad, vague definitions of damage contained in the bill, the same would be true if any of the buildings on the property were not up to code or had a single boarded up or closed off window or entrance or a door with a broken hinge. Based on these definitions, more than half of the homeowners in the state whose homes have been sold at Sheriff’s Sale auctions could face immediate eviction. SB 383 also gives banks the authority to show up on your doorstep unannounced and as often as they want, to inspect not only the exterior but the interior of your home. If you refuse and they deem your refusal unreasonable, they can eliminate the redemption period and immediately repossess the property. These bills are an embarrassment and bad policy that will have devastating repercussions for all of us. We urge our legislators to do the right and reasonable thing and vote them down.
Posted on: Wed, 19 Jun 2013 18:03:14 +0000