MS HB579

Establishes an alternative foreclosure-by-advertisement procedure for mortgages on principal residences that requires lenders to provide borrowers with an opportunity to modify their loans before foreclosure proceedings begin.

Requires lenders to mail borrowers a written notice containing the default amount, lender contact information, a designated contact person authorized to negotiate modifications, and a list of HUD-approved housing counselors before initiating foreclosure.

Prohibits foreclosure proceedings for 90 days if a borrower requests a meeting within 14 days of receiving notice; borrower must contact a housing counselor to schedule the meeting.

Requires lenders to evaluate borrowers for loan modifications targeting a housing-debt-to-income ratio of 38% or less, using tools such as interest rate reductions (minimum 3%), loan term extensions (up to 40 years), or deferral of up to 20% of unpaid principal.

Allows borrowers to file a court action to enjoin foreclosure if required notice was not provided or if they were eligible for modification but foreclosure proceeded in violation of the act; effective July 1, 2018.