HOUSE BILL No. 4034

 

January 22, 2009, Introduced by Rep. Jackson and referred to the Committee on Banking and Financial Services.

 

     A bill to amend 1961 PA 236, entitled

 

"Revised judicature act of 1961,"

 

by amending sections 3101, 3115, 3201, and 3236 (MCL 600.3101,

 

600.3115, 600.3201, and 600.3236), sections 3101 and 3201 as

 

amended by 1981 PA 172, and by adding sections 3116 and 3237.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 3101. The circuit court has jurisdiction to foreclose

 

mortgages of real estate and land contracts. However, with the

 

exception of section 3116, the procedures set forth in this chapter

 

shall do not apply to mortgages of real estate and land contracts

 

held by the Michigan state housing development authority.

 

     Sec. 3115. Whenever a complaint is filed Subject to section

 

3116, in an action for the foreclosure or satisfaction of any a

 

mortgage on real estate or land contract, the court has power to


 

may order a sale of the premises which that are the subject of the

 

mortgage on real estate or land contract, or of that part of the

 

premises which that is sufficient to discharge the amount due on

 

the mortgage on real estate or land contract plus costs. But the

 

circuit judge The court shall not order that the lands subject to

 

the mortgage be sold within 6 months after the filing of the

 

complaint for foreclosure of the mortgage or that the lands which

 

that are the subject of the land contract be sold within 3 months

 

after the filing of the complaint for foreclosure of the land

 

contract.

 

     Sec. 3116. (1) In an action to foreclose a mortgage of or land

 

contract for the sale of residential property in which a judgment

 

of foreclosure has not been entered by the effective date of the

 

amendatory act that added this section, the court, on motion of a

 

defendant, shall order the action stayed until 1 year after the

 

effective date of the amendatory act that added this section.

 

     (2) In an action to foreclose a mortgage of or land contract

 

for the sale of residential property in which a judgment of

 

foreclosure has been entered but the period of redemption has not

 

expired by the effective date of the amendatory act that added this

 

section, the court, on motion of a defendant, shall do 1 of the

 

following:

 

     (a) If the property has not been sold under the judgment,

 

amend the judgment to include a stay of the sale until 1 year after

 

the effective date of the amendatory act that added this section.

 

     (b) If the property has been sold under the judgment, include

 

in the order confirming the report of sale or, if the order


 

confirming the report of sale has been entered, amend the order to

 

include a provision extending the period of redemption until 1 year

 

after the effective date of the amendatory act that added this

 

section. The register of deeds shall endorse, record, and index an

 

order amending an order confirming the report of sale under this

 

subdivision in the manner provided for deeds of sale under section

 

3130 or, if the mortgage or land contract is held by the Michigan

 

state housing development authority, under section 48g of the state

 

housing development authority act of 1966, 1966 PA 346, MCL

 

125.1448g, and note the existence of the order amending the order

 

confirming the report of sale on the record of the deed of sale.

 

     (3) The court may include in an order entered under subsection

 

(1) or a judgment or order entered under subsection (2) any of the

 

following provisions relating to the property during the stay or

 

extension:

 

     (a) Possession of the property. In making an order under this

 

subdivision, the court shall give preference to the owner in

 

possession.

 

     (b) A fair amount to be paid as rental by the person in

 

possession.

 

     (c) The application of money received from rent under

 

subdivision (b) or any other income or profits of the property. The

 

court may order that payment and distribution of money be made

 

through the clerk of the court or another person.

 

     (d) Preservation of the property, including payment of taxes

 

and maintenance of insurance.

 

     (4) The court may set aside or modify an order or judgment


 

entered under subsection (1) or (2) if a defendant substantially

 

violates a provision ordered under subsection (3) or for any other

 

reason that the court determines in its discretion to justify the

 

change. If an order or judgment entered under subsection (1) or (2)

 

is set aside, the rights of a person interested in the property

 

that were affected by the order or judgment revest in the person

 

effective the date the order or judgment is set aside as if the

 

order or judgment had not been entered.

 

     Sec. 3201. (1) Every Subject to subsection (3), every mortgage

 

of real estate , which that contains a power of sale, upon default

 

being made in any condition of such the mortgage, may be foreclosed

 

by advertisement , in the cases and in the manner specified as

 

provided in this chapter. However, the procedures set forth in this

 

     (2) With the exception of subsection (3) and section 3237,

 

this chapter shall does not apply to mortgages of real estate held

 

by the Michigan state housing development authority.

 

     (3) Before 1 year after the effective date of the amendatory

 

act that added this subsection, if a mortgage of residential

 

property is being foreclosed by advertisement, the owner of the

 

mortgaged property or a person liable under the mortgage or

 

mortgage note may file an action in the circuit court for the

 

county where the property is located to enjoin foreclosure of the

 

mortgage by advertisement. The court in an action filed under this

 

subsection shall enjoin foreclosure of the mortgage by

 

advertisement and order the foreclosure to proceed under chapter 31

 

or, if the mortgage is held by the Michigan state housing

 

development authority, under sections 48a to 48p of the state


 

housing development authority act of 1966, 1966 PA 346, MCL

 

125.1448a to 125.1448p.

 

     Sec. 3236. (1) Unless Except as provided in section 3237,

 

unless the premises described in such the deed shall be of sale are

 

redeemed within the time limited for such applicable period of

 

redemption as hereinafter provided , such in this chapter, the deed

 

shall thereupon become becomes operative , on the expiration of the

 

period of redemption and shall vest vests in the grantee therein

 

named , his in the deed or the grantee's heirs or assigns , all the

 

right, title, and interest which the mortgagor had at the time of

 

the execution of the mortgage, or at any time thereafter after the

 

execution, except as to any parcel or parcels which may that have

 

been redeemed and canceled, as hereinafter provided ; and the in

 

this chapter.

 

     (2) After the period of redemption expires, the record thereof

 

shall thereafter, of the deed of sale is for all purposes be deemed

 

a valid record of said the deed of sale without being re-recorded.

 

, but no However, a person having any who has a valid subsisting

 

lien upon on the mortgaged premises, or any part thereof of the

 

mortgaged premises, created before the lien of such the mortgage

 

took effect, shall not be prejudiced by any such the sale, nor

 

shall his and the person's rights or interests be are not in any

 

way affected thereby by the sale.

 

     Sec. 3237. (1) If the applicable period of redemption provided

 

under this chapter for a mortgage of residential property that is

 

being foreclosed by advertisement has not expired by 1 year after

 

the effective date of the amendatory act that added this section, a


 

person described in subsection (2) may file a complaint in the

 

circuit court for the county in which the property is located

 

requesting the relief described in subsection (3).

 

     (2) One or more of the following may file an action under this

 

section:

 

     (a) The mortgagor.

 

     (b) The owner of the mortgaged property.

 

     (c) A person who is liable on the mortgage or note.

 

     (3) The court in an action under this section shall enter an

 

order enjoining until 1 year after the effective date of the

 

amendatory act that added this section the issuance of a writ of

 

restitution or other order to give a purchaser under a deed of sale

 

possession of the mortgaged property. The court may include in the

 

order a provision listed in section 3116(3).

 

     (4) The register of deeds shall endorse, record, and index an

 

order under subsection (3) in the manner provided for deeds of sale

 

under section 3232 or, if the mortgage is held by the Michigan

 

state housing development authority, under section 49h of the state

 

housing development authority act of 1966, 1966 PA 346, MCL

 

125.1449h, and note the existence of the order on the record of the

 

deed of sale.

 

     (5) The court may set aside or modify an order entered under

 

subsection (3) if a defendant substantially violates a provision

 

listed in section 3116(3) that is included in the order or for any

 

other reason that the court determines in its discretion to justify

 

the change. If an order entered under subsection (3) is set aside,

 

the rights of a person interested in the property that were


 

affected by the order revest in the person effective the date the

 

order is set aside as if the order had not been entered.

 

     Enacting section 1. This amendatory act does not take effect

 

unless Senate Bill No.____ or House Bill No. 4033(request no.

 

00656'09 a) of the 95th Legislature is enacted into law.