Bill Text: MI SB0513 | 2011-2012 | 96th Legislature | Introduced

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Bill Title: Civil procedure; foreclosure; judicial foreclosure; require for certain residential mortgages. Amends secs. 3201 & 3240 of 1961 PA 236 (MCL 600.3201 & 600.3240) & adds sec. 3117.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2011-06-22 - Referred To Committee On Banking And Financial Institutions [SB0513 Detail]

Download: Michigan-2011-SB0513-Introduced.html

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SENATE BILL No. 513

 

 

June 22, 2011, Introduced by Senator HUNTER and referred to the Committee on Banking and Financial Institutions.

 

 

 

     A bill to amend 1961 PA 236, entitled

 

"Revised judicature act of 1961,"

 

by amending sections 3201 and 3240 (MCL 600.3201 and 600.3240),

 

section 3201 as amended by 1981 PA 172 and section 3240 as amended

 

by 2010 PA 303, and by adding section 3117.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 3117. (1) In an action under this chapter to foreclose a

 

mortgage of 1- to 4-unit residential property that is occupied by

 

the owner, the court may modify the mortgage or grant other relief

 

to the mortgagor that the court determines is appropriate.

 

     (2) A court shall not modify a mortgage or grant other relief

 

under this section if doing so would affect the rights of tenants

 

or other legal occupants of the property.

 

     Sec. 3201. Every A mortgage of real estate , which that

 

contains a power of sale, upon on a default being made in any

 

condition of such the mortgage, may be foreclosed by advertisement

 

, in the cases and in the manner specified in under this chapter.

 

However, the procedures set forth in this chapter shall does not

 

apply to the following mortgages:

 

     (a) A mortgage of real estate held by the Michigan state

 

housing development authority.

 

     (b) A mortgage of 1- to 4-unit residential property that is

 

occupied by the owner.

 

     Sec. 3240. (1) A purchaser's deed is void if the mortgagor,

 

the mortgagor's heirs or personal representative, or any person

 

lawfully claiming under the mortgagor or the mortgagor's heirs or

 

personal representative redeems the entire premises sold by paying

 

the amount required under subsection (2) and any amount required

 

under subsection (4), within the applicable time limit prescribed

 

in subsections (7) to (12) (11), to the purchaser or the

 

purchaser's personal representative or assigns, or to the register

 

of deeds in whose office the deed is deposited for the benefit of

 

the purchaser.

 

     (2) The amount required to be paid under subsection (1) is the

 

sum that was bid for the entire premises sold, with interest from

 

the date of the sale at the interest rate provided for by the

 

mortgage, together with the amount of the sheriff's fee paid by the

 

purchaser under section 2558(2)(q), and an additional $5.00 as a

 

fee for the care and custody of the redemption money if the payment

 

is made to the register of deeds. Except as provided in subsection

 

(14) (13), the register of deeds shall not determine the amount

 

necessary for redemption. The purchaser shall attach an affidavit

 

with the deed to be recorded under this section that states the

 

exact amount required to redeem the property under this subsection,

 

including any daily per diem amounts, and the date by which the

 

property must be redeemed shall be stated on the certificate of

 

sale. The purchaser may include in the affidavit the name of a

 

designee responsible on behalf of the purchaser to assist the

 

person redeeming the property in computing the exact amount

 

required to redeem the property. The designee may charge a fee as

 

stated in the affidavit and may be authorized by the purchaser to

 

receive redemption funds. The purchaser shall accept the amount

 

computed by the designee.

 

     (3) If a distinct lot or parcel separately sold is redeemed,

 

leaving a portion of the premises unredeemed, the deed shall be

 

void only to the redeemed parcel or parcels.

 

     (4) If, after the sale, the purchaser, the purchaser's heirs

 

or personal representative, or any person lawfully claiming under

 

the purchaser or the purchaser's heirs or personal representative

 

pays taxes assessed against the property, amounts necessary to

 

redeem senior liens from foreclosure, condominium assessments,

 

homeowner association assessments, community association

 

assessments, or premiums on an insurance policy covering any

 

buildings located on the property that under the terms of the

 

mortgage it would have been the duty of the mortgagor to pay if the

 

mortgage had not been foreclosed and that are necessary to keep the

 

policy in force until the expiration of the period of redemption,

 

redemption shall be made only upon payment of the sum specified in

 

subsection (2) plus the amounts specified in this subsection with

 

interest on the amounts specified in this subsection from the date

 

of the payment to the date of redemption at the interest rate

 

specified in the mortgage. This subsection does not apply unless

 

all of the following are filed with the register of deeds with whom

 

the deed is deposited:

 

     (a) An affidavit by the purchaser or someone in his or her

 

behalf who has knowledge of the facts of the payment showing the

 

amount and items paid.

 

     (b) The receipt or copy of the canceled check evidencing the

 

payment of the taxes, amounts necessary to redeem senior liens from

 

foreclosure, condominium assessments, homeowner association

 

assessments, community association assessments, or insurance

 

premiums.

 

     (c) An affidavit of an insurance agent of the insurance

 

company stating that the payment was made and what portion of the

 

payment covers the premium for the period before the expiration of

 

the period of redemption.

 

     (5) If the redemption payment in subsection (4) includes an

 

amount used to redeem a senior lien from a nonjudicial foreclosure,

 

the mortgagor shall have the same defenses against the purchaser

 

with respect to the amount used to redeem the senior lien as the

 

mortgagor would have had against the senior lien.

 

     (6) The register of deeds shall indorse on the documents filed

 

under subsection (4) the time they are received. The register of

 

deeds shall record the affidavit of the purchaser only and shall

 

preserve in his or her files the recorded affidavit, receipts,

 

insurance receipts, and insurance agent's affidavit until

 

expiration of the period of redemption.

 

     (7) For a mortgage executed on or after January 1, 1965, on

 

commercial or industrial property, or multifamily residential

 

property in excess of 4 units, the redemption period is 6 months

 

from the date of the sale.

 

     (8) Subject to subsections (9) to (11), for a mortgage

 

executed on or after January 1, 1965, on residential property not

 

exceeding 4 units and not more than 3 acres in size, if the amount

 

claimed to be due on the mortgage at the date of the notice of

 

foreclosure is more than 66-2/3% of the original indebtedness

 

secured by the mortgage, the redemption period is 6 months.

 

     (8) (9) Subject to subsection (10) (9), for a mortgage on

 

residential property not exceeding 4 units, if the property is

 

abandoned as determined under section 3241, the redemption period

 

is 3 months.

 

     (9) (10) For a mortgage on residential property not exceeding

 

4 units, if the amount claimed to be due on the mortgage at the

 

date of the notice of foreclosure is more than 66-2/3% of the

 

original indebtedness secured by the mortgage and the property is

 

abandoned as determined under section 3241, the redemption period

 

is 1 month.

 

     (10) (11) If the property is abandoned as determined under

 

section 3241a, the redemption period is 30 days or until the time

 

to provide the notice required by section 3241a(c) expires,

 

whichever is later.

 

     (11) (12) If subsections (7) to (11) (10) do not apply, the

 

redemption period is 1 year from the date of the sale.

 

     (12) (13) The amount stated in any affidavits recorded under

 

this section shall be the amount necessary to satisfy the

 

requirements for redemption under this section.

 

     (13) (14) The register of deeds of a county having a

 

population of more than 750,000 and less than 1,500,000, at the

 

request of a person entitled to redeem the property under this

 

section, shall determine the amount necessary for redemption. In

 

determining the amount, the register of deeds shall consider only

 

the affidavits recorded under subsections (2) and (4). A county,

 

register of deeds, or employee of a county or register of deeds is

 

not liable for damages proximately caused by an incorrect

 

determination of an amount necessary for redemption under

 

subsection (2).

 

     (14) (15) A register of deeds may charge not more than $50.00

 

for determining the amount necessary for redemption under this

 

section.