HB-4544, As Passed Senate, December 14, 2011

SUBSTITUTE FOR

HOUSE BILL NO. 4544

A bill to amend 1961 PA 236, entitled

"Revised judicature act of 1961,"

by amending section 3240 (MCL 600.3240), as amended by 2010 PA 303.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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

the mortgagor's heirs or personal representative, or any person

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

personal representative redeems the entire premises sold by paying

the amount required under subsection (2) and any amount required

under subsection (4), within the applicable time limit prescribed

in subsections (7) to ~~(12),~~ (13), to the purchaser or the

purchaser's personal representative 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. Except as provided in subsection

~~(14),~~ (15), 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

or personal representative, or any person lawfully claiming under

the purchaser or the purchaser's heirs or personal representative

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. This subsection does not apply unless

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.

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 a mortgage executed on or after January 1, 1965, on of

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) Subject to subsections (9) to ~~(11),~~ (12), for a mortgage

executed on or after January 1, 1965, on of 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) Subject to subsection (10), for a mortgage on of

residential property not exceeding 4 units, if the property is

abandoned as determined under section 3241, the redemption period

is 3 months.

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

units, 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) For a mortgage of property that is used for agricultural

purposes, the redemption period is 1 year from the date of the

sale.

(13) ~~(12)~~ If subsections (7) to ~~(11)~~ (12) do not apply, the

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

(14) ~~(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.

(15) ~~(14)~~ The register of deeds of a county having a

population of more than 750,000 and less than 1,500,000, at the

request of a person entitled to redeem the property under this

section, shall determine the amount necessary for redemption. In

determining the amount, the register of deeds shall consider only

the affidavits recorded under subsections (2) and (4). A county,

not liable for damages proximately caused by an incorrect

determination of an amount necessary for redemption under

subsection (2).

(16) ~~(15)~~ A register of deeds may charge not more than $50.00

for determining the amount necessary for redemption under this

House Bill No. 4544 (H-3) as amended December 8, 2011

section.

(17) For purposes of this section, there is a presumption that

the property is used for agricultural purposes if, before the

foreclosure sale under this chapter, the mortgagor provides the

party foreclosing the mortgage and the foreclosing party's attorney

proof that the mortgagor filed a schedule F to the mortgagor's

federal income tax form 1040 for the year preceding the year in

which the proceedings to foreclose the mortgage were commenced [and

records an affidavit with the register of deeds for the county in which

the property is located stating that the proof has been delivered]. If

the mortgagor fails to provide proof [and record an affidavit as required

by] this

subsection before the foreclosure sale, there is a presumption that

the property is not used for agricultural purposes. The party

foreclosing the mortgage or the mortgagor may file a civil action

to produce evidence to rebut a presumption created by this

subsection. An action under this section shall be filed before the

expiration of the redemption period that would apply if the

property is determined not to be used for agricultural purposes.

Enacting section 1. This amendatory act applies to property

sold at a foreclosure sale held under section 3216 of the revised

judicature act of 1961, 1961 PA 236, MCL 600.3216, on or after

February 1, 2012.

Enacting section 2. This amendatory act does not take effect

unless all of the following bills of the 96th Legislature are

enacted into law:

(a) House Bill No. 4542.

(b) House Bill No. 4543.