Michigan Enacts Provisions Regarding Federal Loss Mitigation Procedures
by: Zachary Pearlstein
Michigan has enacted a bill that requires lenders to comply with federal loss mitigation procedures, effective immediately.
The revised bill applies to loss mitigation procedures prior to foreclosure, where the following conditions exist:
a) The mortgaged property is claimed as a principal residence exempt from tax under section 7cc of the general property tax act, 1893 PA 206, MCL 211.7cc;
b) The first notice under section 3208 is published after January 9, 2014; and
c) The servicing agent of the mortgage is a defendant that entered into a consent judgment in United States of America, et al. v Bank of America Corp., et al., civil action no. 12-0361 in the United States district court for the District of Columbia, or is a successor in interest to such a defendant.
The loss mitigation procedures state that the person or entity foreclosing the mortgage shall:
a) Designate an individual to serve as a contact. This person may be an employee, or agent of the person or another entity that is an agent of the person, or one may designate a specific department or unit of the person or of an entity that is an agent of the person;
b) Authorize the designated individual or representative to facilitate negotiations and attend meetings with the mortgagor;
c) Include in the written notice the person sends to the mortgagor, or enclose with the notice a separate written notice that contains:
- The name and address and a dedicated telephone number and dedicated email address of the individual, department, or designated unit;
- A statement that the mortgagor may, within 30 days, either by contacting the individual, department, or designated unit, directly or by contacting a homeownership counselor or counseling organization from a list referred to in the written notice, request a meeting with the individual, department, or designated unit to attempt to work out a modification of the mortgage loan to avoid foreclosure.
If the mortgagor requests such a meeting, foreclosure proceedings shall not commence unless the meeting has been held. This does not apply if the mortgagor has not cooperated by scheduling a meeting at a time and place that is convenient to all parties, or in the county where the property is situated, or has failed to attend a scheduled meeting.
About the Author:
Zachary Pearlstein is Associate Counsel and Compliance Specialist at Bankers Advisory. He is a graduate of Brandeis University and earned his Juris Doctor at Suffolk Law School. He is admitted to the Massachusetts Bar. Zachary can be reached at zachary@bankersadvisory.com
Zachary Pearlstein, JD, is a Regulatory Compliance Director with CLA's Mortgage Advisory Division. He joined CLA on January 1, 2014, as part of its acquisition of Bankers Advisory, Inc. Zachary oversees Mortgage Advisory's regulatory compliance team, which focuses on federal and state compliance, fair lending, and the Home Mortgage Disclosure Act (HMDA). He is a graduate of Brandeis University and earned his juris doctor at Suffolk University Law School. He is admitted to the Massachusetts Bar.
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