The Michigan Foreclosure Prevention Program is a project of the Michigan Poverty Law Program (MPLP), a cooperative effort of Legal Services of South Central Michigan (LSSCM) and the University of Michigan Law School. The program is a partnership with legal aid offices and housing counselors throughout Michigan, as well as the National Consumer Law Center (NCLC).
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Michigan Law REQUIRES ALL LENDERS TO WORK WITH YOU TO AVOID FORECLOSURE.
- OPEN ALL MAIL FROM YOUR LENDER. You will receive a notice in the mail stating your RIGHT to work with your lender and a housing counselor.
- CALL A CERTIFIED, NON-PROFIT HOUSING COUNSELOR OR YOUR LOCAL LEGAL AID OFFICE AS SOON AS YOU RECEIVE THE NOTICE. You will have 30 days from the date the notice was mailed to contact the lender and a housing counselor or your local legal aid office.
- MSHDA Foreclosure Prevention Call Center: 866-946-7432
- HUD Housing Counseling & Referral Line: 800-569-4287
- United Way: 2-1-1
- Michigan Foreclosure Prevention Project: this website
Federal Law Provides Protections for Tenants in Foreclosed Properties
The Protecting Tenants at Foreclosure Act (“PTFA”) of 2009 is a federal law that give tenants in foreclosed properties extra protections. It will only be in effect until the end of 2014.
Basically, this law:
- applies to any foreclosure (with only a few exceptions)
requires the “successor in interest” (typically the foreclosing bank) of the foreclosed owner to honor the lease of any bona fide tenant in the property or provide at least 90 days notice to vacate to any bona fide tenant;
- applies to any legitimate ("bona fide") lease or tenancy where the rent is not substantially less than fair market rent, and the tenant is not the foreclosed owner (or the child, spouse, or parent of that person);
- if the tenant uses a Section 8 voucher as part of the rental agreement, the "successor in interest" must continue the Section 8 voucher tenancy and sign on to the housing assistance payment (HAP) contract -- the foreclosure is not "good cause" to terminate the voucher tenancy.
Concerning the law's interaction with Michigan law:
- for a right to occupy under a lease until its term ends (so, beyond 90 days after expiration of the redemption period), the lease must have been entered into before the "notice of foreclosure". In Michigan, that is the day after the expiration of the redemption period following a foreclosure sale (usually six months after that sale).
- for the federally mandated PTFA notice to vacate/terminate to be valid and effective, it must be issued after the expiration of the redemption period;
- the State Court Administrator’s Office (SCAO) has revised its Notice to Quit Termination of Tenancy form (DC 100c) to reflect the new law.
- there is a legitimate argument that the federal law protects tenants in properties foreclosed for unpaid real estate taxes under state law, although the focus of the law is mortgage foreclosure.
If you are a renter whose landlord is facing foreclosure and you have legal questions about your rights as a tenant, please contact your local legal aid office; see Partner Programs for a list of legal aid offices in your county.
Beware of Foreclosure Scams
- ALWAYS contact a HUD or State of Michigan certified housing counselor for highly qualified, FREE help.
- ALWAYS contact your local legal aid office for FREE legal aid.
- NEVER pay a fee in exchange for help working with your lender.
If you believe that you have been a victim of a foreclosure rescue scam, please file a complaint with the Michigan Attorney General's Office (click on link).