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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