Hertel, Ananich want judicial foreclosure system | Michigan Messenger

Local and state officials are calling on the Michigan legislature to change the system for foreclosing on a property from its current foreclosure by advertisement system to one in which judges oversee the foreclosure process.

Ingham County Register of Deeds Curtis Hertel, Jr. sees the impact of the ongoing foreclosure crisis everyday, which has cost his county $2 billion in lost property value. At a press conference Wednesday, Hertel said that a fundamental change in the system is necessary to protect homeowners against unethical foreclosure practices.

“We used to tell people they could save their homes. We no longer say that because [mortgage companies] go to extreme steps to foreclose,” Hertel said. “We can do better.”

Hertel and state Rep. Jim Ananich (D-Flint) said the key reform is shifting the state’s foreclosure process from its current foreclosure by advertisement process to judicial foreclosure. Ananich introduced legislation to do this in May.

A document provided by Ananich’s office from the website RealtyTrac.com shows that about half of the states currently have judicial foreclosures. Calling the current system “outdated,” Ananich said moving to judicial foreclosure would “protect homeowners and make sure the home won’t be stolen out from under them.”

To underscore the importance of the change in the law, Ananich and Hertel hosted homeowner Bill Donahue. Donahue first contacted Hertel in 2011 after battling with Bank of America and Fannie Mae. While Bank of America had approved a loan modification for Donahue and his wife on the home they had lived in for 25 years, Fannie Mae was proceeding with foreclosure action against Donahue. Donahue says he found out about the foreclosure when a representative of the company posted a foreclosure notice on his door.

When Donahue provided the Fannie Mae representative with proof of his loan modification, he said the man congratulated him, told him most homeowners didn’t get their loans modified to prevent foreclosure, and asked him to send the documents to him. Donahue did that and the Fannie Mae rep emailed him and said he’d take care of it.

Then Donahue got an eviction notice from Fannie Mae. The packet gave Donahue and his wife two business days and a weekend to find an attorney to help them challenge the foreclosure and eviction. They did so. Fannie Mae dropped the case, but Donahue says the only thing he got was a weak apology from Bank of America and Fannie Mae.

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