I have been amazed at the number of foreclosures that take place in the State of Michigan, even by legitimate lenders that fail to comply with lending laws. Worse yet people, failing to realize that they have been "had" by an illegal mortgage, simply give up their property. I have found lenders as impeccable as the United States of America (USDA - Rural Housing Service) that were trying to collect money to which they were not entitled [see Apps v USDA Michigan Eastern Division, Northern Division]. More often, legitimate lenders purchase mortgages from "fly by night" brokers, with illegal provisions. What people fail to realize is that 1) there is a usury law in Michigan and in many cases loan finance charges are limited to 7% APR by state statute. 2) In all cases, loan finance charges are limited to 25% APR by state statute, and 3) the penalty for violating these statutes is always renunciation of any claim to ALL of the interest on the loan. Oftentimes this entails the guilty lender paying money to the aggrieved borrower. The guilty lender is also required by statute to pay the aggrieved borrower's legal fees and in egregious cases the lender may have to submit to criminal usury charges.
No one should ever go to negotiate with their lender over a foreclosure until an attorney has checked to make sure that the mortgage complies with state and federal law.
Stay tuned to this space for links and articles to other means to defend yourself from foreclosure.
