SENATE BILL NO. 670 June 17, 1999, Introduced by Senators BULLARD and STEIL and referred to the Committee on Judiciary. A bill to amend 1961 PA 236, entitled "Revised judicature act of 1961," by amending sections 2431, 3208, 3216, and 3240 (MCL 600.2431, 600.3208, 600.3216, and 600.3240), section 3240 as amended by 1996 PA 214, and by adding section 3181. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 2431. (1) The expenses of foreclosinganyA mortgage 2 by advertisement shall be taxed in the circuit court as in civil 3 actions upon the request ofanyA person paying the expenses 4thereof, and upon suchFOR THE ADVERTISEMENT, AND ASSESSED 5 AGAINST THE party liable to pay thesameEXPENSES. 6 (2)WhereIF an attorney is employed to foreclose a mort- 7 gage by advertisement, an attorney's fee, not to exceedanyAN 8 amountwhichTHAT may be provided for in the mortgage, may be 9 included as a part of the expenses ALLOWED TO BE TAXED UNDER 02429'99 SAT 2 1 SUBSECTION (1) AND in the amount bidupon suchIN THE sale for 2 principal and interest duethereon in the following amounts:ON 3 THE MORTGAGE. THE CHARGE FOR ATTORNEY FEES SHALL NOT EXCEED THE 4 AMOUNT ALLOWABLE UNDER THE FEE SCHEDULE IN THE UNDERWRITING 5 GUIDELINES OF THE VETERANS' ADMINISTRATION, THE FEDERAL HOUSING 6 AUTHORITY, THE FEDERAL HOME LOAN MORTGAGE CORPORATION, THE FED- 7 ERAL NATIONAL MORTGAGE ASSOCIATION, OR SIMILAR AGENCY, THAT APPLY 8 TO THE LOAN BEING FORECLOSED. IF SIMILAR UNDERWRITING GUIDELINES 9 DO NOT APPLY TO THE LOAN BEING FORECLOSED, OR IF A THIRD PARTY IS 10 THE SUCCESSFUL BIDDER AT THE FORECLOSURE SALE, THE ATTORNEY MAY 11 CHARGE A FEE NOT TO EXCEED 3% OF THE AMOUNT OF PRINCIPAL AND 12 INTEREST DUE UNDER THE LOAN, PLUS EXPENSES AND COSTS. 13(a) for all sums of $1,000.00 or less, $25.00.14(b) for all sums over $1,000.00 but less than $5,000.00,15$50.00.16(c) for all sums of $5,000.00 or more, $75.00.17But if payment is made after foreclosure proceedings are18commenced and before sale is made, only 1/2 of such attorney's19fees shall be allowed. Both the principal and the interest due20thereon shall be included in the sum on which the attorney's fee21is computed.22 (3) IF REPAYMENT OR REINSTATEMENT OF THE LOAN IS MADE AFTER 23 FORECLOSURE PROCEEDINGS ARE COMMENCED BUT BEFORE THE SALE IS 24 MADE, THE AMOUNT OF ATTORNEY FEES PERMITTED TO BE CHARGED TO THE 25 BORROWER SHALL NOT EXCEED THE AMOUNT OF FEES ALLOWED UNDER THIS 26 SECTION. 02429'99 3 1 SEC. 3181. (1) A MORTGAGEE OF REAL PROPERTY MAY SUBMIT A 2 WRITTEN REQUEST BY CERTIFIED MAIL TO A MORTGAGEE OF ANY LIEN 3 WHICH IS SENIOR TO THE LIEN OF THE REQUESTER, FOR WRITTEN NOTICE 4 OF ANY DELINQUENCIES OF 3 MONTHS OR MORE, IN PAYMENTS OF PRINCI- 5 PAL OR INTEREST ON ANY OBLIGATION SECURED BY THE SENIOR LIEN. 6 (2) THE REQUEST ALLOWED UNDER SUBSECTION (1) SHALL BE SENT 7 TO THE MORTGAGEE, OR THE MORTGAGEE'S AGENT DESIGNATED FOR THE 8 PURPOSE OF RECEIVING LOAN PAYMENTS, AT THE ADDRESS SPECIFIED FOR 9 THE RECEIPT OF PAYMENTS OR AT THE ADDRESS SHOWN ON THE RECORDED 10 DEED OR MORTGAGE. 11 (3) THE REQUEST FOR NOTICE SHALL IDENTIFY THE OWNERSHIP OR 12 SECURITY INTEREST OF THE REQUESTER, THE DATE ON WHICH THE INTER- 13 EST OF THE REQUESTER WILL TERMINATE, THE NAME OF THE MORTGAGOR 14 AND THE NAME OF THE CURRENT OWNER OF THE SECURITY PROPERTY IF 15 DIFFERENT FROM THE MORTGAGOR, THE STREET ADDRESS OR OTHER 16 DESCRIPTION OF THE SECURITY PROPERTY, THE LOAN NUMBER, IF AVAIL- 17 ABLE, OF THE LOAN SECURED BY THE SENIOR LIEN, AND THE NAME AND 18 ADDRESS TO WHICH THE NOTICE IS TO BE SENT AND BE ACCOMPANIED BY A 19 FEE OF $40.00. 20 (4) UNLESS DELINQUENCY HAS BEEN CURED WITHIN 15 DAYS FOLLOW- 21 ING THE END OF 3 MONTHS FROM A DELINQUENCY IN PAYMENTS OF PRINCI- 22 PAL OR INTEREST ON ANY OBLIGATION SECURED BY THE SENIOR LIEN OR 23 WITHIN 10 DAYS FROM THE MAILING OF THE REQUEST FOR NOTICE, WHICH- 24 EVER OCCURS LATER, THE SENIOR LIEN MORTGAGEE SHALL GIVE WRITTEN 25 NOTICE TO THE REQUESTER OF THE FACT OF THE DELINQUENCY AND THE 26 AMOUNT OF THE DELINQUENCY. 02429'99 4 1 (5) IF THE MORTGAGEE OF THE SENIOR LIEN FAILS TO GIVE NOTICE 2 TO THE REQUESTER AS REQUIRED BY THIS SECTION AND A SUBSEQUENT 3 FORECLOSURE SALE OF THE SECURITY PROPERTY OCCURS, THE MORTGAGEE 4 OF THE SENIOR LIEN SHALL BE LIABLE TO THE REQUESTER FOR ANY MONE- 5 TARY DAMAGE DUE TO THE FAILURE TO PROVIDE NOTICE WITHIN THE TIME 6 PERIOD REQUIRED BY THIS SECTION AND SHALL ALSO FORFEIT TO THE 7 REQUESTER THE SUM OF $300.00. 8 (6) A SHOWING BY THE MORTGAGEE OF THE SENIOR LIEN BY A PRE- 9 PONDERANCE OF THE EVIDENCE THAT THE FAILURE TO PROVIDE TIMELY 10 NOTICE AS REQUIRED BY THIS SECTION RESULTED FROM A BONA FIDE 11 ERROR NOTWITHSTANDING THE MAINTENANCE OF PROCEDURES REASONABLY 12 ADAPTED TO AVOID ANY SUCH ERROR SHALL BE A DEFENSE TO ANY LIABIL- 13 ITY FOR THAT FAILURE UNDER SUBSECTION (5). 14 Sec. 3208. (1) Notice that the mortgage will be foreclosed 15 by a sale of the mortgaged premises, orsomeA part ofthem16 THE PREMISES, shall be given by publishing thesame for 4 suc-17cessive weeks at least once in each weekNOTICE A TOTAL OF 5 18 TIMES, ONCE WEEKLY FOR 5 CONSECUTIVE WEEKS, in a newspaper pub- 19 lished in the county where the premisesincluded in the mortgage20and intendedto be sold, or some part of them,aresituated21 LOCATED. If no newspaper is published in the APPROPRIATE county, 22 the notice shall be published in a newspaper published in an 23 adjacent county.In every case within24 (2) WITHIN 15 days after the first publication of the notice 25 UNDER SUBSECTION (1), a true copy OF THE NOTICE shall be posted 26 in a conspicuous place upon any part of the premises described in 27 the notice. 02429'99 5 1 Sec. 3216. (1) The sale shall be at public sale, CONDUCTED 2 betweenthe hour of 9 o'clock in the forenoon and 4 o'clock in3the afternoon9 A.M. AND 4 P.M., atthe place of holdingthe 4 circuit courtwithinFOR the county in which the premises to be 5 sold, or some part of them, are situated, and shall be made by6the person appointed for that purpose in the mortgage, or by the7sheriff, undersheriff, or a deputy sheriff of the county, to the8highest bidderARE LOCATED. 9 (2) THE SALE SHALL BE CONDUCTED BY A PERSON LICENSED UNDER 10 1955 PA 224, MCL 446.51 TO 446.60, OR AS OTHERWISE PERMITTED BY 11 LAW. 12 Sec. 3240.(1) A purchaser's deed is void if the mortga-13gor, the mortgagor's heirs, executors, or administrators, or any14person lawfully claiming under the mortgagor, the mortgagor's15heirs, executors, or administrators redeems the entire premises16sold by paying the amount required under subsection (2), within17the applicable time limit prescribed in subsections (7) to (12),18to the purchaser, the purchaser's executors, administrators, or19assigns, or to the register of deeds in whose office the deed is20deposited for the benefit of the purchaser.21(2) The amount required to be paid under subsection (1) is22the sum that was bid for the entire premises sold, with interest23from the time of the sale at the rate percent borne by the mort-24gage, together with the amount of the sheriff's fee paid by the25purchaser under section 2558(2)(q), and an additional $3.00 as a26fee for the care and custody of the redemption money if the27payment is made to the register of deeds.02429'99 6 1(3) If a distinct lot or parcel separately sold is redeemed,2leaving a portion of the premises unredeemed, the deed shall be3inoperative only to the redeemed parcel or parcels, and to those4portions that have not been redeemed the deed shall remain5valid.6(4) If after the sale the purchaser, the purchaser's heirs,7executors, or administrators, or any person lawfully claiming8under the purchaser, the purchaser's heirs, executors, or admin-9istrators pays taxes assessed against the property, amounts nec-10essary to redeem senior liens from foreclosure, or premiums on an11insurance policy covering any buildings located on the property12that under the terms of the mortgage it would have been the duty13of the mortgagor to pay if the mortgage had not been foreclosed14and that are necessary to keep the policy in force until the15expiration of the period of redemption, redemption shall be made16only upon payment of the sum specified in subsection (2) plus the17amounts specified in this subsection with interest on the amounts18specified in this subsection from the date of the payment to the19date of redemption at the rate specified in the mortgage, if all20of the following are filed with the register of deeds with whom21the deed is deposited:22(a) An affidavit by the purchaser or someone in his or her23behalf who has knowledge of the facts of the payment showing the24amount and items paid.25(b) The receipt or copy of the canceled check evidencing the26payment of the taxes, amounts necessary to redeem senior liens27from foreclosure, or insurance premiums.02429'99 7 1(c) An affidavit of an insurance agent of the insurance2company stating that the payment was made and what portion of the3payment covers the premium for the period prior to the expiration4of the period of redemption.5(5) If the redemption payment in subsection (4) includes an6amount used to redeem a senior lien from a nonjudicial foreclo-7sure, the mortgagor shall have the same defenses against the pur-8chaser with respect to the amount used to redeem the senior lien9as the mortgagor would have had against the senior lien.10(6) The register of deeds shall indorse on the documents11filed pursuant to subsection (4) the time they are received. The12register of deeds shall record the affidavit of the purchaser13only and shall preserve in his or her files the recorded affida-14vit, receipts, insurance receipts, and insurance agent's affida-15vit until expiration of the period of redemption.16(7) For a mortgage executed on or after January 1, 1965, on17commercial or industrial property, or multifamily residential18property in excess of 4 units, the redemption period is 6 months19from the time of the sale.20(8) For a mortgage executed on or after January 1, 1965, on21residential property not exceeding 4 units and not more than 322acres in size, if the amount claimed to be due on the mortgage at23the date of the notice of foreclosure is more than 66-2/3% of the24original indebtedness secured by the mortgage, the redemption25period is 6 months.26 (1) THE DEED ISSUED UNDER THE SALE SHALL BE VOID IF THE 27 MORTGAGOR, THE MORTGAGOR'S HEIRS, EXECUTORS, OR ADMINISTRATORS OR 02429'99 8 1 A PERSON LAWFULLY CLAIMING UNDER THE MORTGAGOR REDEEMS THE ENTIRE 2 PREMISES SOLD BY PAYING WITHIN 30 DAYS AFTER THE DATE OF THE SALE 3 TO THE PURCHASER, THE PURCHASER'S SUCCESSORS, OR THE REGISTER OF 4 DEEDS IN WHOSE OFFICE THE DEED IS DEPOSITED FOR THE BENEFIT OF 5 THE PURCHASER, THE SUM WHICH WAS BID FOR THE ENTIRE PREMISES 6 SOLD, WITH INTEREST FROM THE TIME OF THE SALE AT THE INTEREST 7 RATE BORNE BY THE MORTGAGE. 8 (2) IF A DISTINCT LOT OR PARCEL LESS THAN THE WHOLE PREMISES 9 IS SEPARATELY SOLD AND REDEEMED UNDER THIS SECTION, LEAVING A 10 PORTION OF THE PREMISES UNREDEEMED, THE DEED SHALL BE VOID ONLY 11 AS TO THAT PORTION OF THE PREMISES REDEEMED. 12 (3) IF THE PAYMENT IS MADE TO THE REGISTER OF DEEDS, THE 13 REDEMPTION AMOUNT SHALL INCLUDE A $3.00 FEE FOR THE CARE AND CUS- 14 TODY OF THE REDEMPTION MONEY. 15 (4)(9)For a mortgage on residential property not exceed- 16 ing 4 units and not more than 3 acres in size, if the property is 17 abandoned as determinedpursuant toUNDER section 3241, the 18 redemption period is3 months90 DAYS. 19 (5)(10)For a mortgage on residential property not 20 exceeding 4 units and not more than 3 acres in size, if the 21 amount claimed to be due on the mortgage at the date of the 22 notice of foreclosure is more than 66-2/3% of the original 23 indebtedness secured by the mortgage and the property is aban- 24 doned as determinedpursuant toUNDER section 3241, the redemp- 25 tion period is1 month30 DAYS. 02429'99 9 1 (6)(11)If the property is abandoned as determined 2pursuant toUNDER section 3241a, the redemption period is 30 3 days. 4 (7)(12) In any other caseEXCEPT AS OTHERWISE PROVIDED BY 5 THIS SECTION, the redemption period is 1 year from the date of 6 the sale. 02429'99 Final page. 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