FORECLOSURE DEFENSE NEWS AND INFORMATION - Michigan

What should Michigan homeowner do when they are having problems making their monthly mortgage payments, and the value of their homes has fallen below the amount of the balance of the on their mortgage? The answer, according to an April 5, 2009 article in the Detroit Free Press, is to request their lender's approval for a "short sale."

A short sale enables a distressed borrower to sell a home for less than what is owed on the mortgage with the forgiving the difference. A pilot program in Michigan seeks to encourage lenders and homeowners to consider the advantages of short sales as an alternative to the total loss situation of a foreclosure. A short sale enables a homeowner to escape the mountain of debt, while benefiting the community by avoiding the emergence of yet another vacant, foreclosed property.

To arrange for short sales, homeowners must request the permission of their lenders. This can be accomplished with an easy to use request form, available for download. With minimal effort and cost, a Michigan homeowner in arrears can arrange for an alternative to the devastation of foreclosure.

Michigan ranks sixth in the nation for foreclosure. Last week, in an effort to provide relief to homeowners, Michigan enacted the "Lifeline Law", which provides homeowners with an extra ninety days to work with their banks for solutions to save their homes and stop foreclosure. The new law took effect on July 5, 2009.

The law requires lenders top notify homeowners of free counseling as soon as they send out default notices. They also have to send out a list of state-certified counselors. The law is intended to help those homeowners who have some way of continuing to make payments.