House Bill No. 4306: Michigan Legislature Enacts New Foreclosure Notice Requirements

Simon PLC Attorneys & Counselors – January 2020 Memorandum

House Bill No. 4306: Michigan Legislature Enacts New Foreclosure Notice Requirements

Bloomfield Hills, Michigan – On Thursday, December 12, 2019 Michigan Governor Gretchen Whitmer signed HB 4306 into law which requires certain information to be included in a notice of foreclosure by advertisement. Uncertainty over the past few years regarding the proper content for published foreclosure notices had resulted in many creditors removing language not statutorily required from their published notices. The statute, taking effect on Monday, January 13, 2020, brings clarity to the default process and requires that the notice of foreclosure now specifically include the following:

1. The name(s) of the mortgagor(s), original mortgagee and the foreclosing assignee (if applicable);

1. The date the mortgage was executed and the date the mortgage was recorded in the county records;

1. The amount claimed due under the mortgage on the date of the notice;

1. A description of the mortgage property which is in substantially the same form as the description within the mortgage;
   
2. The street address or commonly known address of the property;

1. The length of the redemption period (any mortgage executed after December 31, 1964);

1. A statement that if the property is sold at a foreclosure sale, the mortgagor will be held responsible to the purchaser of the property (mortgagee or third party) for damaging the property during the redemption period;

1. The name, address and telephone number of the attorney representing the foreclosing entity;

1. For all residential mortgages, the following statement, “Attention homeowner: If you are a military service member on active duty, if your period of active duty has concluded less than 90 days ago, or if you have been ordered to active duty, please contact the attorney for the party foreclosing the mortgage at the telephone number stated in this notice.”

1. The following statement regarding procedures for sale, “Notice of foreclosure by advertisement.  Notice is given under section 3212 of the revised judicature act of 1961, 1961 PA 236, MCL 600.3212, that the following mortgage will be foreclosed by a sale of the mortgage premises, or some part of them, at a public auction sale to the highest bidder for cash or cashier’s check at the place of holding the circuit court in __________ County, starting promptly at (time), on (date).  The amount due on the mortgage may be greater on the day of the sale.  Placing the highest bid at the sale does not automatically entitle the purchaser to free and clear ownership of the property.  A potential purchaser is encouraged to contact register of deeds office or a title insurance company, either of which may charge a fee for this information.”

Additionally, HB 4306 prohibits publication of a notice of foreclosure by a foreclosing mortgagee in a newspaper in which the foreclosing party, or its agent(s), has a majority ownership interest.  HB 4306 codifies the required elements for the notice of foreclosure which has been the subject of litigation in the past.  HB 4306 also provides clarity on the information required to be included in the notice of foreclosure that the legislature has deemed necessary to alert property owners to the implications of foreclosure by advertisement.

This new legislation will take effect on Monday, January 13, 2020.  All notices of foreclosure in Michigan should be updated to comply with these new requirements.  The Default Servicing Group at Simon PLC is prepared to answer any questions or concerns your organization may have regarding this new regulation and its implementation.  Visit the Team at https://simonattys.com/default-servicing-and-foreclosure/ for more information.

N.B. Not Legal Advice: Please contact us if you would like to discuss the facts and circumstances of your specific matter. Simon PLC Attorneys & Counselors expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this memorandum. The information contained herein may not reflect current legal developments and is provided without any knowledge as to the recipient’s location, industry, identity or specific circumstances. No recipients of this content, clients or otherwise, should act, or refrain from acting, on the basis of any content included in this memorandum without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the jurisdiction for which the recipient’s legal issue(s) involve. The application and impact of relevant laws varies from jurisdiction to jurisdiction, and our attorneys do not seek to practice law in states, territories and foreign countries where they are not properly authorized to do so.