Governor Synder has signed HBs 4542-4544, the Foreclosure Prevention Extension Legislation. HBs 4542 and 4543, which relates to the 90-day foreclosure prevention mediation process, would apply to foreclosure proceedings for which the required first default notice is mailed to the borrower on or after February 1, 2012. HB 4544 which modifies the foreclosure redemption period for dwellings on three or more acres applies to foreclosure sales held on or after February 1, 2012.
In addition to extending the sunset date from January 5, 2012 to December 31, 2012, the new law makes the following changes:
1. The publication of the default notice is now at the option of the lender, but if the lender opts to publish the notice, the name of the borrower could not be included in the notice.
2. The Legislature did not lengthen the 90-day mediation process but made several changes to deadlines within the period as outlined below.
• The homeowner to opt into the mediation process must, within 30 days after the mailing of the default notice, contact or have their housing counselor contact the designated lender representative. The previous deadline was within 24 days.
• The lender's representative, within 10 days after being contacted by the homeowner or housing counselor, may request the homeowner to provide documents necessary to determine whether the homeowner is eligible for a modification.
• If the homeowner does not provide the requested documents within 60 days after the mailing of the default notice the lender could proceed with foreclosure by advertisement.
• Within 90 days after the mailing of the default notice or 10 days after the meeting between the homeowner and the lender's designated person, whichever is later, the lender must inform the homeowner of its decision on a modification.
3. The legislation includes criminal penalties for persons acting as housing counselors under Sections 3205A-3205C who are not on the MSHDA list of approved counselors.
4. Homeowners would be liable for damages if during the redemption period there was physical damage beyond the wear and tear resulting from normal use.
5. HB 4544 reduces the redemption period for dwellings on property in excess of three acres not used for agricultural purposes. The redemption period on such property was previously one year but is reduced to six months. Property of any acreage that is used for agricultural purposes retains the one-year redemption period if the property owner before the foreclosure sale provides the foreclosing party or its attorney with proof that the owner filed a Schedule F with his or her tax returns for the year preceding the year the foreclosure proceedings were commenced.
Below you will find links to the legislation:
http://www.legislature.mi.gov/documents/2011-2012/billenrolled/House/pdf/2011-HNB-4542.pdf
http://www.legislature.mi.gov/documents/2011-2012/billenrolled/House/pdf/2011-HNB-4543.pdf
http://www.legislature.mi.gov/documents/2011-2012/billenrolled/House/pdf/2011-HNB-4544.pdf
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