House Bill 11 Summary

• Requires foreclosing parties to mail borrowers a written notice detailing the default amount, designated contact person, and list of approved housing counselors before initiating foreclosure proceedings on principal residences.

• Borrowers may request a meeting with the designated contact person within 14 days of receiving notice to negotiate a loan modification, which suspends foreclosure proceedings for 90 days.

• Establishes loan modification criteria targeting a housing debt-to-gross income ratio of 38% or less, achievable through interest rate reductions (minimum 3%), extended amortization periods (up to 40 years), principal deferral (up to 20%), or late fee elimination.

• If a borrower qualifies for modification under the established criteria, the mortgage holder must offer the modification agreement and can only proceed with foreclosure by advertisement if the borrower fails to execute it within 14 days for reasons unrelated to lender action.

• Borrowers may bring action in chancery court to enjoin foreclosure if proper notice was not served or if the lender violated modification procedures; court may convert foreclosure to judicial proceedings if borrower qualifies for modification.