HB-4454, As Passed House, March 11, 2009

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 subsection (6), 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 if the borrower and the person designated under

subdivision (c) do not agree to modify the mortgage loan but it is

determined that the borrower meets criteria for a modification

under the FDIC workout program, the foreclosure of the mortgage

will proceed before a judge instead of by advertisement.

(h) 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 served under

this section who is not served 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.

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 and place

that is convenient to all parties, or in the county where the

property is situated.

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) House Bill No. 4453.

(b) House Bill No. 4455.