HB-4455, As Passed House, March 11, 2009

SUBSTITUTE FOR

HOUSE BILL NO. 4455

A bill to amend 1961 PA 236, entitled

"Revised judicature act of 1961,"

(MCL 600.101 to 600.9947) by adding sections 3205c, 3205d, and

3205e; and to repeal acts and parts of acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 3205c. (1) If a borrower has contacted a housing

counselor under section 3205b but the process has not resulted in

an agreement to modify the mortgage loan, the borrower, housing

counselor, or the person designated under section 3205a(1)(c) shall

calculate a modified payment amount under the FDIC workout program.

The person designated under section 3205a(1)(c) shall provide the

borrower with a copy of any calculation made by the person under

this subsection.

(2) If the results of the calculation under subsection (1) are

that the borrower is eligible for a modification, the mortgage

holder or mortgage servicer shall not foreclose the mortgage under

this chapter but may proceed under chapter 31. If the results of

the calculation under subsection (1) are that the borrower is not

eligible for a modification without an exception, the mortgage

holder or mortgage lender may foreclose the mortgage under this

chapter.

(3) If a mortgage holder or mortgage servicer begins

foreclosure proceedings under this chapter in violation of this

section, the borrower may file an action in the circuit court for

the county where the mortgaged property is situated to convert the

foreclosure proceeding to a judicial foreclosure. If a borrower

files an action under this section and the court determines that

the borrower participated in the process under section 3205b, a

modification agreement was not reached, and the borrower is

eligible for modification under the FDIC workout program, the court

shall enjoin foreclosure of the mortgage by advertisement and order

that the foreclosure proceed under chapter 31.

Sec. 3205d. The Michigan state housing development authority

shall develop the 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.

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 Sections 3205a to 3205d are repealed effective 2

years after the effective date of the amendatory act that added