Bill Text: MI SB0705 | 2011-2012 | 96th Legislature | Introduced

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Bill Title: Civil procedure; foreclosure; deficiency judgment; prohibit. Amends secs. 3150 & 3280 of 1961 PA 236 (MCL 600.3150 & 600.3280).

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2011-10-27 - Referred To Committee On Banking And Financial Institutions [SB0705 Detail]

Download: Michigan-2011-SB0705-Introduced.html

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SENATE BILL No. 705

 

 

September 28, 2011, Introduced by Senator HUNTER and referred to the Committee on Judiciary.

 

 

 

     A bill to amend 1961 PA 236, entitled

 

"Revised judicature act of 1961,"

 

by amending sections 3150 and 3280 (MCL 600.3150 and 600.3280).

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 3150. (1) In Subject to subsection (2), in the original

 

judgment in a foreclosure cases action under this chapter, the

 

court shall determine and adjudge which defendants, if any, are

 

personally liable on the land contract or for the mortgage debt.

 

The judgment shall provide that upon the on confirmation of the

 

report of sale, that if either the principal, interest, or costs

 

ordered to be paid , is left unpaid are not fully paid after

 

applying the amount received upon from the sale of the premises,

 

the clerk of the court shall issue execution for the amount of the

 

deficiency, upon the on application of by the attorney for the

 

plaintiff, without notice to the defendant or his the defendant's

 

attorney. The court may order and compel the delivery of the

 

possession of the premises to the purchaser at the sale.

 

     (2) A person who forecloses a mortgage of residential property

 

under this chapter is not entitled to a deficiency judgment against

 

any person liable for the indebtedness secured by the mortgage. In

 

an action under this chapter to foreclose a mortgage of residential

 

property, the court shall not enter a deficiency judgment and the

 

clerk of the court shall not issue execution under subsection (1).

 

     (3) Regardless of whether an action to foreclose a mortgage

 

has been commenced under this chapter or proceedings to foreclose a

 

mortgage by advertisement have been commenced under chapter 32, if

 

a mortgage holder or servicer reaches an agreement with a mortgagor

 

who has defaulted in an obligation under the note secured by the

 

mortgage to allow the sale of the mortgaged property with payment

 

to the mortgage holder of less than the full amount due on the

 

note, the mortgage holder or any person who succeeds to the

 

mortgage holder's interest shall not bring an action and is not

 

entitled to the entry of judgment for the balance due on the note.

 

     Sec. 3280. (1) When, in the foreclosure of a mortgage by

 

advertisement, any sale of real property has been made after

 

February 11, 1933, or shall be hereafter made by a mortgagee,

 

trustee, or other person authorized to make the same pursuant to

 

the power of sale contained therein, at which If the mortgagee,

 

payee, or other holder of the obligation thereby secured has become

 

or becomes the purchaser mortgage, deed of trust, or other

 

instrument purchases the subject property at the sale under this

 

chapter, or takes or has taken title thereto to the property at

 

such the sale, either directly or indirectly, and thereafter such

 

mortgagee, payee or other holder of the secured obligation, as

 

aforesaid, shall sue for and undertake subsequently brings an

 

action to recover a deficiency judgment against the mortgagor,

 

trustor, or other maker of any such obligation, the instrument or

 

against any other person liable thereon on the mortgage, deed of

 

trust, or instrument, it shall be competent and lawful for the

 

defendant against whom such deficiency judgment is sought to allege

 

and show as matter of may claim as a complete or partial defense

 

and or set-off, to the extent only of the amount of the plaintiff's

 

claim, that the property sold was fairly worth the amount of the

 

debt secured by it the mortgage, deed of trust, or instrument at

 

the time and place of sale or that the amount bid was substantially

 

less than its true value. , and such showing shall constitute a

 

defense to such action and shall defeat the deficiency judgment

 

against him, either in whole or in part to such extent.

 

     (2) This section shall does not affect nor or apply to the

 

rights of other purchasers or of innocent third parties, nor shall

 

it be held to or affect or defeat the negotiability of any note,

 

bond, or other obligation secured by such the mortgage, deed of

 

trust, or other instrument. Such proceedings, as aforesaid, shall

 

in no way This section does not affect the title of the purchaser

 

to the lands property acquired by such the purchase.

 

     (3) This section shall does not apply to a foreclosure sales

 

sale made pursuant to an order or decree of a court nor or to any a

 

judgment sought or rendered in any a foreclosure suit nor to any

 

chancery sale heretofore or hereafter made and confirmed action.

 

     (4) A person who forecloses a mortgage of residential property

 

by advertisement under this chapter is not entitled to a deficiency

 

judgment against any person liable for the indebtedness secured by

 

the mortgage.