HB 6423 Summary

• Prohibits foreclosure by advertisement on principal residences unless the foreclosing party has executed an agreement to participate as a servicer in the Help for Hardest Hit Program administered by the Michigan State Housing Development Authority.

• Requires foreclosing parties to provide written notice to borrowers at least 90 days before commencing foreclosure proceedings, including default reasons, amount due, contact information for the mortgage holder/servicer, and information about housing counseling services.

• Mandates that if a borrower requests a meeting within 14 days of notice, the foreclosing party must meet and negotiate in good faith to attempt loan modification before proceeding with foreclosure.

• Requires loan modification programs to target a housing debt-to-gross-income ratio of 38% or less, using methods such as interest rate reduction (minimum 3%), loan term extension (up to 40 years), principal deferral (up to 20%), or fee elimination.

• Applies only to foreclosures where the first notice is published between July 5, 2009 and July 5, 2011; borrowers may file suit in circuit court to enjoin non-compliant foreclosures and convert them to judicial proceedings.