MI SB0690

Requires mortgage lenders to work with borrowers who have contacted housing counselors to determine if they qualify for loan modifications under a standardized program.

Sets target debt-to-income ratio of 38% or less for housing-related debt (mortgage, property taxes, insurance, homeowner fees) on an aggregate basis.

Allows loan modifications through one or more of the following: interest rate reduction to a 3% floor for at least 5 years, extension of amortization period to 40 years or less, deferral of up to 20% of unpaid principal, or reduction/elimination of late fees.

Prohibits foreclosure if a borrower qualifies for modification under these criteria, unless the borrower fails to execute and return the modification agreement within 14 days after receiving it.

Allows borrowers to file in circuit court to convert non-judicial foreclosures to judicial foreclosures if lenders violate these requirements, with courts ordered to enjoin foreclosure and require preparation of modification agreements for eligible borrowers.