Michigan’s foreclosure redemption period subject to new rules under legislation headed to Gov. Snyder – Comment from Ken Gross
From MLIVE – June 20, 2013
Michigan’s foreclosure redemption period subject to new rules under legislation headed to Gov. Snyder
LANSING — Homeowners could lose their homes during a foreclosure redemption period if certain damage is found and not fixed under legislation that’s headed to Gov. Rick Snyder.
Michigan lawmakers on Thursday passed two foreclosure related bills — one would maintain the state’s 90-day pre-foreclosure negotiation period that would have otherwise expired at the end of the month, while the other adds stipulations to the 180-day post-foreclosure redemption period.
The House voted 103-6 for Senate Bill 380, which continues the state’s 90-day negotiation window that allows homeowners to seek loan modifications or other agreements to avoid foreclosure. The period would be extended to 120 days under federal regulations starting on January 10, 2014.
Senate Bill 383 passed 59 to 50. It maintains the 180-day post-foreclosure period for homeowners to reclaim or short sell their homes. The bill originally would have cut that to 60 days, a move that critics said would result in more people losing their homes.
While the legislation gained near-unanimous support in the Senate after maintaining the longer redemption window, some Democrats and homeowner advocates warn that another harmful measure was added in the compromise.
The bill allows the purchaser to inspect the interior and exterior of the home at any time during the redemption period. If certain damage is found, the purchaser can start proceedings to evict the resident and take over the property. It’s meant to safeguard purchasers from homeowners who neglect or purposefully damage their homes that they’re not able to keep.
That doesn’t sit well with Stan Greene, resource development manager for Home Repair Services, a Grand Rapids nonprofit that offers a foreclosure intervention program.
He noted the bill includes boarded up windows as damage. So if someone breaks into a home and the homeowner boards up the window prior to replacing it, Greene said that could be grounds for the purchaser to request proceedings for eviction.
“It appears that places more, not less of a burden, on families that are already pretty hard put upon,” he said.
Rep. Mike Callton, R-Nashville, said “No judge in their right mind would throw someone out for a broken window.”
He said the legislation also gives homeowners time to fix the damage before a court hearing on potential eviction.
“It’s something we needed to do, and there’s still work to be done,” Callton said, adding that he’s willing to talk about requiring 24-hour notice before an inspection.
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