SENATE BILL No. 29

 

 

January 28, 2009, Introduced by Senator CLARKE 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 3115, 3201, and 3236 (MCL 600.3115, 600.3201,

 

and 600.3236), section 3201 as amended by 1981 PA 172, and by

 

adding sections 3116 and 3237.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     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 or land

 

contract 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 for 2 years after the entry of the stay

 

order.

 

     (2) In an action to foreclose a mortgage or land contract 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 for 2 years after

 

the entry of the amendment that includes the stay.

 

     (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 for 2 years

 

after the entry of the order that includes the stay. 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 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 continued

 

occupation of the property. Unless the defendant has abandoned the

 

property, the preference shall be for the defendant to remain in

 

possession of the property.

 

     (b) A fair amount to be paid in lieu of mortgage or land

 

contract payments by the person in possession. In determining

 

payments to be made under this section, the court shall consider

 

all of the following:

 

     (i) The ability of the defendant to pay.

 

     (ii) The financial status of the holder of the mortgage or

 

seller under the land contract.

 

     (iii) Any other factor that the court determines to be relevant.

 

     (c) That money received under subdivision (b) be applied to

 

the mortgage or land contract debt or any other indebtedness

 

arising from a default under the mortgage or land contract. 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.

 

     (e) A stay of any foreclosure of the property, or of any

 


period of redemption if foreclosure has already occurred, for

 

nonpayment of taxes on the property.

 

     (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.

 

     (5) The holder of a mortgage that is the subject of a stay or

 

extension order under this section may apply for a guarantee of

 

payment of the mortgage loan under section 44h of the state housing

 

development authority act of 1966, 1966 PA 346, MCL 125.1444h.

 

     (6) After 3 years after the effective date of the amendatory

 

act that added this section, a court shall not enter an order or

 

judgment under this section to stay an action or sale or to extend

 

a period of redemption.

 

     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) This chapter shall does not apply to mortgages of real

 

estate held by the Michigan state housing development authority.

 

     (3) Before 3 years 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.

 

     (4) An individual who files an action under subsection (3)

 

shall be presumed to be indigent and unable to pay court fees in

 

the action for purposes of section 2529.

 

     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 3 years 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). Section 3201(4)

 

applies to an action filed under this section.

 

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

 

section:

 

     (a) The owner of the mortgaged property.

 

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

 

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

 

order enjoining for 2 years after the entry of the order 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 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.

 

     (6) The holder of a mortgage that is the subject of an order

 

under subsection (3) may apply for a guarantee of payment of the

 

mortgage loan under section 44h of the state housing development

 

authority act of 1966, 1966 PA 346, MCL 125.1444h.

 

     Enacting section 1. This amendatory act does not take effect

 

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

 

enacted into law:

 

     (a) Senate Bill No. 31.                                    

 

           

 

     (b) Senate Bill No. 30.