SENATE BILL No. 635

 

 

October 18, 2017, Introduced by Senators GREGORY, CONYERS, HERTEL, JOHNSON, YOUNG, HOPGOOD, KOWALL, HOOD, BIEDA, KNEZEK and ANANICH and referred to the Committee on Banking and Financial Institutions.

 

 

     A bill to amend 1961 PA 236, entitled

 

"Revised judicature act of 1961,"

 

by amending section 3240 (MCL 600.3240), as amended by 2014 PA 431.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 3240. (1) A purchaser's deed under section 3232 is void

 

if the mortgagor, the mortgagor's heirs or personal representative,

 

or any person that has a recorded interest in the property lawfully

 

claiming under the mortgagor or the mortgagor's heirs or personal

 

representative redeems the entire premises sold by paying the

 

amount required under subsection (2) and any amount required under

 

subsection (4), within the applicable time limit prescribed in

 

subsections (7) to (12), to the purchaser or the purchaser's

 

personal representative or assigns, or to the register of deeds in

 


whose office the deed is deposited for the benefit of the

 

purchaser.

 

     (2) The amount required to be paid under subsection (1) is the

 

amount that was bid for the entire premises sold, interest from the

 

date of the sale at the interest rate provided for by the mortgage,

 

the amount of the sheriff's fee paid by the purchaser under section

 

2558(2)(q), and an additional $5.00 as a fee for the care and

 

custody of the redemption money if the payment is made to the

 

register of deeds. Except as provided in subsection (14), the

 

register of deeds shall not determine the amount necessary for

 

redemption. The purchaser shall provide an affidavit with the deed

 

to be recorded under this section that states the exact amount

 

required to redeem the property under this subsection, including

 

any daily per diem amounts, and the date by which the property must

 

be redeemed shall be stated on the certificate of sale. The

 

purchaser may include in the affidavit the name of a designee

 

responsible on behalf of the purchaser to assist the person

 

redeeming the property in computing the exact amount required to

 

redeem the property. The designee may charge a fee of not more than

 

$100.00 as stated in the affidavit and may be authorized by the

 

purchaser to receive redemption money. The purchaser shall accept

 

the amount computed by the designee.

 

     (3) If a distinct lot or parcel separately sold is redeemed,

 

leaving a portion of the premises unredeemed, the deed is void only

 

to the redeemed parcel or parcels.

 

     (4) If, after a sale under section 3216, the purchaser, the

 

purchaser's heirs or personal representative, or any person


lawfully claiming under the purchaser or the purchaser's heirs or

 

personal representative pays taxes assessed against the property,

 

amounts necessary to redeem senior liens from foreclosure,

 

condominium assessments, homeowner association assessments,

 

community association assessments, or premiums on an insurance

 

policy covering any buildings located on the property that under

 

the terms of the mortgage it would have been the duty of the

 

mortgagor to pay if the mortgage had not been foreclosed and that

 

are necessary to keep the policy in force until the expiration of

 

the period of redemption, redemption shall be made the property may

 

be redeemed only upon on payment of the sum amount specified in

 

subsection (2) plus the amounts specified in this subsection with

 

interest on the amounts specified in this subsection from the date

 

of the payment to the date of redemption at the interest rate

 

specified in the mortgage. This subsection does not apply unless

 

all of the following are filed with the register of deeds with whom

 

the deed is deposited:

 

     (a) An affidavit by the purchaser or someone in his or her

 

behalf who has knowledge of the facts of the payment showing the

 

amount and items paid.

 

     (b) The receipt or copy of the canceled check evidencing the

 

payment of the taxes, amounts necessary to redeem senior liens from

 

foreclosure, condominium assessments, homeowner association

 

assessments, community association assessments, or insurance

 

premiums.

 

     (c) An affidavit of an insurance agent of the insurance

 

company stating that the payment was made and what portion of the


payment covers the premium for the period before the expiration of

 

the period of redemption.

 

     (5) If the redemption payment in subsection (4) includes an

 

amount used to redeem a senior lien from a nonjudicial foreclosure,

 

the mortgagor has the same defenses against the purchaser with

 

respect to the amount used to redeem the senior lien as the

 

mortgagor would have had against the senior lien.

 

     (6) The register of deeds shall indorse on documents filed

 

under subsection (4) the time they are received. The register of

 

deeds shall record the affidavit of the purchaser only and shall

 

preserve in his or her files the recorded affidavit, receipts,

 

insurance receipts, and insurance agent's affidavit until

 

expiration of the period of redemption.

 

     (7) Subject to section 3238, for a mortgage executed on or

 

after January 1, 1965, of commercial or industrial property, or

 

multifamily residential property in excess of 4 units, the

 

redemption period is 6 months from the date of the sale.

 

     (8) Subject to subsections (9) to (11) and section 3238, for a

 

mortgage executed on or after January 1, 1965, of residential

 

property not exceeding 4 units, if the amount claimed to be due on

 

the mortgage at the date of the notice of foreclosure is more than

 

66-2/3% of the original indebtedness secured by the mortgage, the

 

redemption period is 6 months.

 

     (9) For a mortgage of residential property not exceeding 4

 

units, if the property is abandoned as determined under section

 

3241, the redemption period is 1 month.

 

     (10) If the property is abandoned as determined under section


3241a, the redemption period is 30 days or until the time to

 

provide the notice required by section 3241a(c) expires, whichever

 

is later.

 

     (11) Subject to section 3238, for a mortgage of property that

 

is used for agricultural purposes, the redemption period is 1 year

 

from the date of the sale.

 

     (12) If subsections (7) to (11) do not apply, and subject to

 

section 3238, the redemption period is 1 year from the date of the

 

sale.

 

     (13) The amount stated in any affidavits recorded under this

 

section shall be is the amount necessary to satisfy the

 

requirements for redemption under this section.

 

     (14) The register of deeds of a county with a population of

 

more than 750,000 and less than 1,500,000, at the request of a

 

person entitled to redeem the property under this section, shall

 

determine the amount necessary for redemption. In determining the

 

amount, the register of deeds shall consider only the affidavits

 

recorded under subsections (2) and (4). A county, register of

 

deeds, or employee of a county or register of deeds is not liable

 

for damages proximately caused by an incorrect determination of an

 

amount necessary for redemption under subsection (2).

 

     (15) A register of deeds may charge not more than $50.00 for

 

determining the amount necessary for redemption under this section.

 

     (16) For purposes of this section, there is a presumption that

 

the property is used for agricultural purposes if, before the

 

foreclosure sale under this chapter, the mortgagor provides the

 

party foreclosing the mortgage and the foreclosing party's attorney


proof that the mortgagor filed a schedule F to the mortgagor's

 

federal income tax form 1040 for the year preceding the year in

 

which the proceedings to foreclose the mortgage were commenced and

 

records an affidavit with the register of deeds for the county in

 

which the property is located stating that the proof has been

 

delivered. If the mortgagor fails to provide proof and record an

 

affidavit as required by this subsection before the foreclosure

 

sale, there is a presumption that the property is not used for

 

agricultural purposes. The party foreclosing the mortgage or the

 

mortgagor may file a civil action to produce evidence to rebut a

 

presumption created by this subsection. An action under this

 

section shall subsection must be filed before the expiration of the

 

redemption period that would apply if the property is determined

 

not to be used for agricultural purposes.