SENATE BILL No. 1203

 

 

March 30, 2006, Introduced by Senator CROPSEY and referred to the Committee on Judiciary.

 

 

 

     A bill to amend 1961 PA 236, entitled

 

"Revised judicature act of 1961,"

 

by amending sections 3240 and 3241a (MCL 600.3240 and 600.3241a),

 

section 3240 as amended by 2004 PA 538 and section 3241a as added

 

by 1986 PA 94.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 3240. (1) A purchaser's deed is void if the mortgagor,

 

the mortgagor's heirs, executors, or administrators, or any person

 

lawfully claiming under the mortgagor or the mortgagor's heirs,

 

executors, or administrators redeems the entire premises sold by

 

paying the amount required under subsection (2), within the

 

applicable time limit prescribed in subsections (7) to (12), to the

 

purchaser or the purchaser's executors, administrators, or assigns,

 


or to the register of deeds in whose office the deed is deposited

 

for the benefit of the purchaser.

 

     (2) The amount required to be paid under subsection (1) is the

 

sum that was bid for the entire premises sold, with interest from

 

the date of the sale at the interest rate provided for by the

 

mortgage, together with the amount of the sheriff's fee paid by the

 

purchaser under section 2558(2)(q), and an additional $5.00 as a

 

fee for the care and custody of the redemption money if the payment

 

is made to the register of deeds. The register of deeds shall not

 

determine the amount necessary for redemption. The purchaser shall

 

attach an affidavit with the deed to be recorded under this section

 

that states the exact amount required to redeem the property under

 

this subsection, including any daily per diem amounts, and the date

 

by which the property must be redeemed shall be stated on the

 

certificate of sale. The purchaser may include in the affidavit the

 

name of a designee responsible on behalf of the purchaser to assist

 

the person redeeming the property in computing the exact amount

 

required to redeem the property. The designee may charge a fee as

 

stated in the affidavit and may be authorized by the purchaser to

 

receive redemption funds. The purchaser shall accept the amount

 

computed by the designee.

 

     (3) If a distinct lot or parcel separately sold is redeemed,

 

leaving a portion of the premises unredeemed, the deed shall be 

 

void only to the redeemed parcel or parcels.

 

     (4) If after the sale the purchaser, the purchaser's heirs,

 

executors, or administrators, or any person lawfully claiming under

 

the purchaser or the purchaser's heirs, executors, or

 


administrators pays taxes assessed against the property, amounts

 

necessary to redeem senior liens from foreclosure, condominium

 

assessments, homeowner association assessments, community

 

association assessments, or premiums on an insurance policy

 

covering any buildings located on the property that under the terms

 

of the mortgage it would have been the duty of the mortgagor to pay

 

if the mortgage had not been foreclosed and that are necessary to

 

keep the policy in force until the expiration of the period of

 

redemption, redemption shall be made only upon payment of the sum

 

specified in subsection (2) plus the amounts specified in this

 

subsection with interest on the amounts specified in this

 

subsection from the date of the payment to the date of redemption

 

at the interest rate specified in the mortgage, if all of the

 

following are filed with the register of deeds with whom the deed

 

is deposited:

 

     (a) An affidavit by the purchaser or someone in his or her

 

behalf who has knowledge of the facts of the payment showing the

 

amount and items paid.

 

     (b) The receipt or copy of the canceled check evidencing the

 

payment of the taxes, amounts necessary to redeem senior liens from

 

foreclosure, condominium assessments, homeowner association

 

assessments, community association assessments, or insurance

 

premiums.

 

     (c) An affidavit of an insurance agent of the insurance

 

company stating that the payment was made and what portion of the

 

payment covers the premium for the period before the expiration of

 

the period of redemption.

 


     (5) If the redemption payment in subsection (4) includes an

 

amount used to redeem a senior lien from a nonjudicial foreclosure,

 

the mortgagor shall have the same defenses against the purchaser

 

with respect to the amount used to redeem the senior lien as the

 

mortgagor would have had against the senior lien.

 

     (6) The register of deeds shall indorse on the documents filed

 

under subsection (4) the time they are received. The register of

 

deeds shall record the affidavit of the purchaser only and shall

 

preserve in his or her files the recorded affidavit, receipts,

 

insurance receipts, and insurance agent's affidavit until

 

expiration of the period of redemption.

 

     (7)  For  Subject to subsections (9) to (11), for a mortgage

 

executed on or after January 1, 1965, on commercial or industrial

 

property, or multifamily residential property in excess of 4 units,

 

the redemption period is 6 months from the date of the sale.

 

     (8)  For  Subject to subsections (9) to (11), for a mortgage

 

executed on or after January 1, 1965, on residential property not

 

exceeding 4 units and not more than 3 acres in size, if the amount

 

claimed to be due on the mortgage at the date of the notice of

 

foreclosure is more than 66-2/3% of the original indebtedness

 

secured by the mortgage, the redemption period is 6 months.

 

     (9)  For  Subject to subsection (10), for a mortgage on

 

residential property,  not exceeding 4 units and not more than 3

 

acres in size,  if the property is abandoned as determined under

 

section 3241, the redemption period is 3 months.

 

     (10) For a mortgage on residential property,  not exceeding 4

 

units and not more than 3 acres in size,  if the amount claimed to

 


be due on the mortgage at the date of the notice of foreclosure is

 

more than 66-2/3% of the original indebtedness secured by the

 

mortgage and the property is abandoned as determined under section

 

3241, the redemption period is 1 month.

 

     (11) If the property is abandoned as determined under section

 

3241a, the redemption period is 30 days or until the time to

 

provide the notice required by section 3241a(c) expires, whichever

 

is later.

 

     (12)  In any other case  If subsections (7) to (11) do not

 

apply, the redemption period is 1 year from the date of the sale.

 

     (13) The amount stated in any affidavits recorded under this

 

section shall be the amount necessary to satisfy the requirements

 

for redemption under this section.

 

     Sec. 3241a.  (1)  For purposes of this chapter, if foreclosure

 

proceedings have been commenced under this chapter against

 

residential property,  not exceeding 4 units and not more than 3

 

acres in size,  abandonment of premises shall be conclusively

 

presumed upon satisfaction of all of the following requirements

 

before the end of the redemption period:

 

     (a) The mortgagee has made a personal inspection of the

 

mortgaged premises and the inspection does not reveal that the

 

mortgagor or persons claiming under the mortgagor are presently

 

occupying or will occupy the premises.

 

     (b) The mortgagee has posted a notice at the time of making

 

the personal inspection and has mailed by certified mail, return

 

receipt requested, a notice to the mortgagor at the mortgagor's

 

last known address, which notices state that the mortgagee

 


considers the premises abandoned and that the mortgagor will lose

 

all rights of ownership 30 days after the foreclosure sale or when

 

the time to provide the notice required by subdivision (c) expires,

 

whichever is later, unless the mortgagor; the mortgagor's heirs,

 

executor, or administrator; or a person lawfully claiming from or

 

under 1 of them provides the notice required by subdivision (c).

 

     (c) Within 15 days after  receipt of a  the notice required by

 

subdivision (b) was posted and mailed, the mortgagor; the

 

mortgagor's heirs, executor, or administrator; or a person lawfully

 

claiming from or under 1 of them  does not give  has not given

 

written notice by first-class mail to the mortgagee at an address

 

provided by the mortgagee in the notices required by subdivision

 

(b) stating that the premises are not abandoned.

 

     (2) This section applies to a foreclosure proceeding filed or

 

pending after May 15, 1986.