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Foreclosure Bill Package Passes State House and Senate

Written by Zana Tomich on June 25, 2013 Category: Banking

Michigan’s foreclosure bill package passed the Senate and House and will be presented to the Governor for signature in the days to come. The foreclosure bill package will likely be signed since the existing foreclosure prevention law sunsets on June 30, 2013. The bills are expected to accomplish the following:

  • The sunset on the existing foreclosure prevention law will be extended until January 9, 2014. (HB 4765). The first notice under Section 3208 must be published before January 10, 2014. On January 10, 2014 and thereafter, with the exception of the five servicers referenced below, the provisions of the 90-day law with, the requirement for a face to face meeting with the lender, is repealed. However, for any notice published before January 10, 2014, the servicer will have to follow the requirements of Sections 3205a to 3205d until June 30,2014, after which those sections will be repealed.

  • SB 380 and HB 4766 will require the five large servicers that entered into a consent judgment in United States of America, et al. v Bank of America Corp., et al., to issue a notice to the delinquent borrower, similar to what is required under the existing foreclosure prevention law, that offers the homeowner an option to meet with the servicer to attempt to avoid foreclosure by working out a modification. This provision would be effective January 10, 2014

  • Also, effective January 10, 2014, SB 383 retains the six-month redemption period but gives the purchaser the right to inspect periodically the foreclosed property. If the inspection is refused, or the purchaser determines that the property is abandoned, or that damage has occurred or is imminent, the purchaser could commence summary proceedings for possession of the property. If judgment for possession is granted in favor of the purchaser, the right to redemption is extinguished and the purchaser is granted full title to the property. The court cannot enter a judgment of possession, if before the hearing for possession the mortgagor repairs the damage to the property.

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