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Changes Possible in Michigan Foreclosure by Advertisement Law

Michigan law currently allows mortgage holders to begin the foreclosure process on properties by advertisement. However, lawmakers are pushing to change this law due to instances of fraud that have recently come to light.

Foreclosure by Advertisement

Foreclosure by advertisement allows mortgage holders to begin the foreclosure process on a mortgagee who is in default by running an advertisement announcing a sheriff's sale on the property. Under the terms of the statute, the lender must publish an advertisement for four consecutive weeks in a newspaper that covers the county in which the property is located. The lender also has to post a notice on the property itself within 15 days of the publication of the first advertisement.

How Does Foreclosure by Advertisement Hurt Homeowners?

Foreclosure by advertisement is ripe with possibility for fraud. The Ingham County registrar of deeds discovered hundreds of deeds that had been improperly signed or "robo-signed" in order to begin the foreclosure process, meaning that the foreclosures could have been based on falsified documents.

Additionally, the current law has no requirement that the mortgage holder notify the mortgagee personally in order to begin the foreclosure by advertisement process. There is the potential that the borrower would not even know that the lender began foreclosure proceedings under current law.

Proposed Changes to Foreclosure by Advertisement Law

In an effort to keep more people in their homes and to keep buildings occupied, lawmakers are proposing that the court review any foreclosure action on any property that is owner occupied and four units large or less,. Legislators are hoping that having judicial review of mortgages will allow the court to work out loan modifications and allow people to stay in their homes.

If you are behind in your mortgage payments and facing the possibility of foreclosure, do not hesitate to consult with an experienced attorney who can discuss your situation with you and inform you of all of the options available to help you regain solid financial footing.

Source: Officials to push end of law allowing foreclosure by advertisement

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