Bill Text: MI SB1172 | 2011-2012 | 96th Legislature | Engrossed
Bill Title: Civil procedure; foreclosure; mortgage modification negotiation procedures; extend sunset provision. Amends secs. 3204 & 3205e of 1961 PA 236 (MCL 600.3204 & 600.3205e).
Spectrum: Partisan Bill (Republican 3-0)
Status: (Passed) 2012-12-31 - Assigned Pa 0521'12 With Immediate Effect [SB1172 Detail]
Download: Michigan-2011-SB1172-Engrossed.html
SB-1172, As Passed Senate, September 27, 2012
SUBSTITUTE FOR
SENATE BILL NO. 1172
A bill to amend 1961 PA 236, entitled
"Revised judicature act of 1961,"
by amending sections 3204 and 3205e (MCL 600.3204 and 600.3205e),
section 3204 as amended by 2011 PA 301 and section 3205e as amended
by 2011 PA 302.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3204. (1) Subject to subsection (4), a party may
foreclose a mortgage by advertisement if all of the following
circumstances exist:
(a) A default in a condition of the mortgage has occurred, by
which the power to sell became operative.
(b) An action or proceeding has not been instituted, at law,
to recover the debt secured by the mortgage or any part of the
mortgage; or, if an action or proceeding has been instituted, the
action or proceeding has been discontinued; or an execution on a
judgment rendered in an action or proceeding has been returned
unsatisfied, in whole or in part.
(c) The mortgage containing the power of sale has been
properly recorded.
(d) The party foreclosing the mortgage is either the owner of
the indebtedness or of an interest in the indebtedness secured by
the mortgage or the servicing agent of the mortgage.
(2) If a mortgage is given to secure the payment of money by
installments, each of the installments mentioned in the mortgage
after the first shall be treated as a separate and independent
mortgage. The mortgage for each of the installments may be
foreclosed in the same manner and with the same effect as if a
separate mortgage were given for each subsequent installment. A
redemption of a sale by the mortgagor has the same effect as if the
sale for the installment had been made upon an independent prior
mortgage.
(3) If the party foreclosing a mortgage by advertisement is
not the original mortgagee, a record chain of title shall exist
prior to the date of sale under section 3216 evidencing the
assignment of the mortgage to the party foreclosing the mortgage.
(4) A party shall not commence proceedings under this chapter
to foreclose a mortgage of property claimed as a principal
residence exempt from tax under section 7cc of the general property
tax act, 1893 PA 206, MCL 211.7cc, if 1 or more of the following
apply:
(a) Notice has not been mailed to the mortgagor as required by
section 3205a.
(b) After a notice is mailed to the mortgagor under section
3205a, the time for the mortgagor to request, either directly or
through a housing counselor, a meeting with the person designated
under section 3205a(1)(c) under section 3205b has not expired.
(c) Within 30 days after a notice is mailed to the mortgagor
under section 3205a, the mortgagor has requested a meeting under
section 3205b with the person designated under section 3205a(1)(c)
and 90 days have not passed after the notice was mailed. This
subdivision does not apply if the mortgagor has failed to provide
documents as required under section 3205b(2).
(d) Documents have been requested under section 3205b(2) and
the time for producing the documents has not expired.
(e) The mortgagor has requested a meeting under section 3205b
with the person designated under section 3205a(1)(c), the mortgagor
has provided documents as required under section 3205b(2), and the
person designated under section 3205a(1)(c) has not met or
negotiated with the mortgagor under this chapter.
(f) The mortgagor and mortgagee have agreed to modify the
mortgage loan and the mortgagor is not in default under the
modified agreement.
(g) Calculations under section 3205c(1) show that the
mortgagor is eligible for a loan modification and foreclosure under
this chapter is not allowed under section 3205c(7).
(5) Subsection (4) applies only to proceedings under this
chapter in which the first notice under section 3208 is published
after
July 5, 2009 and before December 31, 2012.June 30, 2013.
(6) Subsection (4) does not apply to a mortgage of property
used for agricultural purposes if the mortgage is subject to
borrower's rights under the federal acts and is subject to the
restructuring of distressed loans or the debt restructuring and
loan servicing provisions of the federal acts, if the applicable
period to apply for a restructuring required under the federal acts
is longer than the period within which a borrower may request a
meeting under section 3205b, and if compliance with the federal
acts will not result in proceedings being commenced under this
chapter within 90 days after a default under the mortgage. As used
in this subsection, "federal acts" means the farm credit act of
1971, Public Law 92-181, as amended, or the consolidated farm and
rural development act, Public Law 87-128, and rules and regulations
promulgated under those acts.
Sec. 3205e. Sections 3205a to 3205d are repealed effective
December
31, 2012.June 30, 2013.
