LANSING, MI – A new law allows homeowners to freeze foreclosure proceedings for 90 days while they try to work out new payment arrangements with their lenders. The law took effect yesterday.
AUDIO: Homeowners who freeze their foreclosures have to contact credit counselors who, in turn, will help them negotiate new terms with their lenders. Lenders are required to cooperate.
Mary Townley is with the Michigan State Housing Development Authorities. She says all homeowners that are having trouble making their payments are eligible for help, so it doesn't matter if a person is low-income homeowner or a high-income homeowner.
Michigan has the 11th highest foreclosure rate in the country. The website RealtyTrac says there were almost 14,000 new foreclosure filings here in May.
But the law can't stop foreclosures, and it can't help people who've lost their jobs make payments. The credit counselors will help people who can't pay their home loans make the transition to rental housing.