HB-4454, As Passed Senate, April 2, 2009

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 4454

A bill to amend 1961 PA 236, entitled

"Revised judicature act of 1961,"

(MCL 600.101 to 600.9947) by adding sections 3205a and 3205b.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 3205a. (1) Subject to subsections (6) to (8), before

proceeding with a sale under this chapter 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, the foreclosing

party shall serve a written notice on the borrower that contains

all of the following information:

(a) The reasons that the mortgage loan is in default and the

amount that is due and owing under the mortgage loan.

(b) The names, addresses, and telephone numbers of the

mortgage holder, the mortgage servicer, and any agent designated by

the mortgage holder or mortgage servicer.

as the person to contact and that has the authority to make

agreements under sections 3205b and 3205c.

(d) That enclosed with the notice is a list of housing

counselors prepared by the Michigan state housing development

authority and that within 14 days after the notice is sent, the

borrower may request a meeting with the person designated under

subdivision (c) to attempt to work out a modification of the

mortgage loan to avoid foreclosure and that the borrower may also

request a housing counselor to attend the meeting.

(e) That if the borrower requests a meeting with the person

designated under subdivision (c), foreclosure proceedings will not

be commenced until 90 days after the date the notice is mailed to

the borrower.

(f) That if the borrower and the person designated under

subdivision (c) reach an agreement to modify the mortgage loan, the

mortgage will not be foreclosed if the borrower abides by the terms

of the agreement.

(g) That the borrower has the right to contact an attorney,

and the telephone numbers of the state bar of Michigan's lawyer

referral service and of a local legal aid office serving the area

in which the property is situated.

(2) A person who serves a notice under subsection (1) shall

enclose with the notice a list prepared by the Michigan state

housing development authority under section 3205d of the names,

addresses, and telephone numbers of housing counselors approved by

the United States department of housing and urban development or

the Michigan state housing development authority.

(3) A person who serves a notice under subsection (1) shall

serve the notice by first-class mail and by certified mail, return

receipt requested, with delivery restricted to the borrower, both

sent to the borrower's last known address.

(4) Within 7 days after mailing a notice under subsection (3),

the person who serves the notice shall publish a copy of the notice

1 time in the same manner as is required for publishing a notice of

foreclosure sale under section 3208.

(5) A borrower on whom notice is required to be mailed under

this section to whom the notice is not mailed and against whom

foreclosure proceedings are commenced under this chapter may bring

an action in the circuit court for the county in which the

mortgaged property is situated to enjoin the foreclosure.

(6) If the borrower and the person designated under subsection

(1)(c) have previously agreed to modify the mortgage loan under

section 3205b, this section and sections 3205b and 3205c do not

apply unless the borrower has complied with the terms of the

mortgage loan, as modified, for 1 year after the date of the

modification.

(7) This section and sections 3205b and 3205c do not apply if

the borrower is deceased.

(8) This section and sections 3205b and 3205c do not apply if

the mortgage holder or mortgage servicer has qualified the loan

secured by the mortgage for participation in the trial period

necessary to obtain a loan modification agreement under the home

affordable modification program administered by the United States

department of the treasury effective March 4, 2009.

Sec. 3205b. (1) A borrower who wishes to participate in

negotiations to attempt to work out a modification of a mortgage

loan shall contact a housing counselor from the list provided under

section 3205a within 14 days after the list is mailed to the

borrower. Within 10 days after being contacted by a borrower, a

housing counselor shall inform the person designated under section

3205a(1)(c) in writing of the borrower's request.

(2) After being informed of a borrower's request to meet under

this section, the person designated under section 3205a(1)(c) may

request the borrower to provide any documents that are necessary to

determine whether the borrower is eligible for a modification,

without an exception, under the FDIC workout program. The borrower

shall give the person designated under section 3205a(1)(c) copies

of any documents requested under this section.

(3) A housing counselor contacted by a borrower under this

section shall schedule a meeting between the borrower and the

person designated under section 3205a(1)(c) to attempt to work out

a modification of the mortgage loan. At the request of the

borrower, the housing counselor will attend the meeting. The

meeting and any later meetings shall be held at a time agreed and

place agreed to by the parties in the county where the property is

situated or, if the parties agree, in another county.

(4) If as a result of a meeting under this section the

borrower and the person designated under section 3205a(1)(c) reach

an agreement to modify the mortgage loan, within 7 business days

after the agreement is reached, the person designated under section

3205a(1)(c) shall prepare a writing that states the agreement and

shall provide it to the borrower. The borrower shall adopt or

reject the writing and return it to the person designated under

section 3205a(1)(c) within 7 business days after the date it is

provided to the borrower.

Enacting section 1. This amendatory act takes effect 30 days

after the date it is enacted into law.

Enacting section 2. This amendatory act does not take effect

unless all of the following bills of the 95th Legislature are

enacted into law:

(a) House Bill No. 4453.

(b) House Bill No. 4455.