HOUSE BILL No. 4543

April 13, 2011, Introduced by Reps. Pettalia, Lyons and 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 3205a, 3205b, 3205d, and 3205e (MCL 600.3205a,

600.3205b, 600.3205d, and 600.3205e), sections 3205a and 3205b as

added by 2009 PA 30 and sections 3205d and 3205e as added by 2009

PA 31.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 3205a. (1) Subject to subsection (6), before commencing a

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,~~ to which

section 3204(4) applies, 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, or 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. However, after the

effective date of the amendatory act that added section 3205(1),

the person designated under this subsection shall be the individual

designated under section 3205(1) and the notice shall give the

name, address, and telephone number of the individual.

(d) That enclosed with the notice is a list of housing

counselors prepared by the Michigan state housing development

authority and that within 14 20 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 from the enclosed list 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 section 3205c(1) and foreclosure under this chapter is not

allowed under section 3205c(7), 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 shall serve a notice under subsection (1) by

mailing the notice by regular 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 mails the notice shall publish a notice informing

the borrower of the borrower's rights under this section. The

person shall publish the information 1 time in the same manner as

is required for publishing a notice of foreclosure sale under

section 3208. The notice under this subsection shall contain all of

the following information:

(a) The borrower's name and the property address.

(b) A statement that informs the borrower of all of the

following:

(i) That the borrower has the right to request a meeting with

the mortgage holder or mortgage servicer.

(ii) The name of the person designated under subsection (1)(c)

as the person to contact and that has the authority to make

agreements under sections 3205b and 3205c.

(iii) That the borrower may contact a housing counselor by

visiting the Michigan state housing development authority's website

or by calling the Michigan state housing development authority.

(iv) The website address and telephone number of the Michigan

state housing development authority.

(v) That if the borrower requests a meeting with the person

designated under subsection (1)(c), foreclosure proceedings will

not be commenced until 90 days after the date notice is mailed to

the borrower.

(vi) That if the borrower and the person designated under

subsection (1)(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.

(vii) That the borrower has the right to contact an attorney,

and the telephone number of the state bar of Michigan's lawyer

referral service.

(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 20 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 under

section 3205c. The borrower shall give the person designated under

section 3205a(1)(c) copies of any documents requested under this

section within 15 business days after the request for the

documents. If the borrower does not provide the documents requested

as required by this subsection, a party entitled to foreclose the

mortgage may proceed with the foreclosure.

(3) A housing counselor from the list provided under section

3205a 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~~ a housing

counselor from the list provided under section 3205a 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.

Sec. 3205d. (1) The Michigan state housing development

authority shall develop ~~the~~ a list of housing counselors approved

by the United States department of housing and urban development or

by the Michigan state housing development authority who may perform

the duties of housing counselor under sections 3205a to 3205c.

(2) A person who is not an attorney or on the list of housing

counselors developed under this section shall not perform the

duties of housing counselor under sections 3205a to 3205c.

(3) A person who is not an attorney or on the list of housing

counselors developed under this section shall not represent that

the person is entitled to perform the duties of housing counselor

under sections 3205a to 3205c.

(4) A person who violates subsection (2) or (3) is guilty of a

misdemeanor punishable by imprisonment for not more than 90 days or

a fine of not more than $2,000.00, or both.

Sec. 3205e. Sections 3205a to 3205d are repealed effective 2

~~years after the effective date of the amendatory act that added~~

~~this section~~ July 5, 2012.

Enacting section 1. This amendatory act does not take effect

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