HOUSE BILL No. 5020

 

September 28, 2011, Introduced by Rep. Farrington 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 3204 and 3212 (MCL 600.3204 and 600.3212),

 

section 3204 as amended by 2011 PA 72 and section 3212 as amended

 

by 2004 PA 186.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 3204. (1) Subject to subsection (4), a party may

 

foreclose a mortgage by advertisement if all of the following

 

circumstances exist:

 

     (a) A default in a condition of the mortgage has occurred, by

 

which the power to sell became operative.

 

     (b) An action or proceeding has not been instituted, at law,

 

to recover the debt secured by the mortgage or any part of the

 

mortgage; or, if an action or proceeding has been instituted, the


 

action or proceeding has been discontinued; or an execution on a

 

judgment rendered in an action or proceeding has been returned

 

unsatisfied, in whole or in part.

 

     (c) The mortgage containing the power of sale has been

 

properly recorded.

 

     (d) The party foreclosing the mortgage is either the owner of

 

the indebtedness or of an interest in the indebtedness secured by

 

the mortgage or the servicing agent of the mortgage.

 

     (2) If a mortgage is given to secure the payment of money by

 

installments, each of the installments mentioned in the mortgage

 

after the first shall be treated as a separate and independent

 

mortgage. The mortgage for each of the installments may be

 

foreclosed in the same manner and with the same effect as if a

 

separate mortgage were given for each subsequent installment. A

 

redemption of a sale by the mortgagor has the same effect as if the

 

sale for the installment had been made upon an independent prior

 

mortgage.

 

     (3) If the party foreclosing a mortgage by advertisement is

 

not the original mortgagee, a record chain of title containing each

 

assignment of the mortgage, including the most recent assignment,

 

shall exist prior to the date of sale under section 3216 evidencing

 

the assignment of the mortgage to the party foreclosing the

 

mortgage be recorded with the register of deeds before proceedings

 

to foreclose the mortgage are commenced under this chapter.

 

     (4) A party shall not commence proceedings under this chapter

 

to foreclose a mortgage of property described in section 3205a(1)

 

if 1 or more of the following apply:


 

     (a) Notice has not been mailed to the mortgagor as required by

 

section 3205a.

 

     (b) After a notice is mailed to the mortgagor under section

 

3205a, the time for a housing counselor to notify the person

 

designated under section 3205a(1)(c) of a request by the mortgagor

 

under section 3205b(1) has not expired.

 

     (c) Within 14 days after a notice is mailed to the mortgagor

 

under section 3205a, the mortgagor has requested a meeting under

 

section 3205b with the person designated under section 3205a(1)(c)

 

and 90 days have not passed after the notice was mailed.

 

     (d) The mortgagor has requested a meeting under section 3205b

 

with the person designated under section 3205a(1)(c), the mortgagor

 

has provided documents if requested under section 3205b(2), and the

 

person designated under section 3205a(1)(c) has not met or

 

negotiated with the mortgagor under this chapter.

 

     (e) The mortgagor and mortgagee have agreed to modify the

 

mortgage loan and the mortgagor is not in default under the

 

modified agreement.

 

     (f) Calculations under section 3205c(1) show that the

 

mortgagor is eligible for a loan modification and foreclosure under

 

this chapter is not allowed under section 3205c(7).

 

     (5) Subsection (4) applies only to proceedings under this

 

chapter in which the first notice under section 3208 is published

 

after July 5, 2009 and before January 5, 2012.

 

     Sec. 3212. Every notice of foreclosure by advertisement shall

 

include all of the following:

 

     (a) The names of the mortgagor, the original mortgagee, and


 

each assignee, including the foreclosing assignee, if any the

 

mortgage has been assigned.

 

     (b) The date of the mortgage, and the date the mortgage was

 

recorded, the date of each assignment, and the date each assignment

 

was recorded.

 

     (c) The amount claimed to be due on the mortgage on the date

 

of the notice.

 

     (d) A description of the mortgaged premises that substantially

 

conforms with the description contained in the mortgage.

 

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

 

length of the redemption period as determined under section 3240.