New Foreclosure Law in the Making in Michigan Could Expedite Evictions

There are apprehensions that new foreclosure law in the making in Michigan could expedite evictions. It would bring down the redemption period mandated by the state, permanently to three months from the previous six months.

Thomas Price had been residing in his home for three decades. He is a disabled veteran from the Vietnam War. When his lender, Saxon Mortgage foreclosed on his property he could cobble together $6,000 to save his house on Highland Avenue thanks to the redemption period of six months that was in force.

It took Price, suffering from incurable breathing problems, five months to get together the amount. The new bill would have made it impossible for him to save his home – he would have lagged behind by two months.

One of the three sponsors of this bill is State Rep. Lisa Posthumus Lyons (Republican/Alto). She said that these three months deducted could be loaded on to the time of negotiations during the pre-foreclosure stage.

But the opponents contend that by cutting down the time would add to the number of foreclosures leading to innumerable vacancies. This will further push down housing prices and hurt the market at a time when it is just beginning to inch upwards.

Tracie Coffman of Home Repair Services (Grand Rapids) said the bill was tilted in favour of the banks. She is part of the Michigan Foreclosure Task Force and has testified against this bill in front of the House Banking and Financial Services Committee. She does counseling in financial matters. Coffman said, "Michigan would be the first state to make the foreclosure process even faster and the first state to be addressing it by assisting the banks".

On 13th April the bills (HB 4542 – 4544) was introduced. It will extend for a year the 2009 pre-foreclosure negotiation law of the state. The law will come to an end on 5th July. The law mandates a 90 day process during the pre-foreclosure state that will enable the troubled homeowners and their lenders to talk out things and perhaps skirt foreclosures.

The vice chairperson of the Banking and Financial Services Committee Lyons referred to the bill as being community friendly. The other sponsors of the bill are Rep Jeff Farrington (Republican/Utah) and Rep Peter Pettalia (Republican/Presque Isle). The law is targeting only the residential units and not agricultural properties.