The Michigan legislature has recently enacted a new Foreclosure Prevention bill into law. This law is designed to give homeowners more time to work out a modification on their mortgage and remains in effect for two (2) years from the date of enactment.

Under the new Michigan Foreclosure Prevention law, a mortgage company is prohibited from stating a foreclosure by advertisement of a principal residence until a letter is first sent to the homeowners. The letter would outline among other things, the options for modification of the existing mortgage. If then the homeowner requests a meeting to discuss the modification option, the foreclosure proceedings cannot begin or commence until ninety (90) days after the date the notice is first mailed.

This new Michigan Foreclosure Prevention law has then net effect of lengthening the time period by an additional ninety (90) days to the already existing time period of the foreclosure process. This means in effect the homeowner has the legal right to stay in a home for the ninety (90) day extension period prior to a foreclosure sale, and the statutory six (6) month redemption period after the date of the foreclosure sale.

If the borrower and the mortgage company reach an agreement to modify the mortgage loan, the mortgage will not be foreclosed and the modified agreement will take the place of the existing mortgage.