MI SB1481

Prohibits foreclosure by advertisement if the foreclosing party has not executed an agreement to participate as a servicer in the Help for Hardest Hit Program administered by the Michigan State Housing Development Authority and approved by the U.S. Department of Treasury.

Requires foreclosing parties to serve written notice on borrowers of principal residences at least 90 days before commencing foreclosure proceedings, including reasons for default, contact information for the mortgage holder/servicer, and borrower rights to request loan modification meetings.

Mandates that if a borrower qualifies for a loan modification under specified criteria (targeting a 38% housing-debt-to-income ratio through interest rate reduction, loan term extension, principal deferral, or fee reduction), the mortgage holder must offer modification or proceed through judicial foreclosure instead of advertisement.

Allows borrowers to file a court action to convert an improperly commenced advertisement foreclosure to judicial foreclosure if they participated in modification discussions and remain eligible for a loan modification.

Applies only to foreclosure proceedings where the first notice is published between July 5, 2009 and July 5, 2011.