2009 House Bill 4454 / Public Act 30

Impose new regulations on foreclosures

Introduced in the House

Feb. 24, 2009

Introduced by Rep. Andy Coulouris (D-95)

To mandate that before initiating “foreclosure by advertisement” proceedings, a mortgage lender or servicer must send a notice to the borrower, and if the borrower chooses to try to renegotiate the loan, or is unsuccessful in doing so but meets the criteria for a renegotiation under an FDIC "workout" program, prohibit the lender for proceeding with the foreclosure by advertisement for 90 days. If a borrower were eligible for a for an FDIC "workout," he or she could force a lender unwilling to go that route to undertake judicial foreclosure proceedings, which are more costly and time consuming than foreclosure-by-advertisement.

Referred to the Committee on Banking and Financial Services

March 5, 2009

Reported without amendment

With the recommendation that the substitute (H-1) be adopted and that the bill then pass.

March 11, 2009

Substitute offered

To replace the previous version of the bill with one that revises various details, but does not change its substance. This version was subsequently superseded by another substitute with other detail changes.

The substitute failed by voice vote

Substitute offered by Rep. Andy Coulouris (D-95)

To replace the previous version of the bill with one that revises details but does not change the substance of the bill as previously described.

The substitute passed by voice vote

Amendment offered by Rep. Darwin Booher (R-102)

To eliminate the provision delaying the foreclosure by advertisement if the borrower meets the criteria for an FDIC "workout".

The amendment failed by voice vote

Passed in the House 75 to 33 (details)

Received in the Senate

March 12, 2009

Referred to the Committee on Judiciary

March 26, 2009

Reported without amendment

With the recommendation that the substitute (S-1) be adopted and that the bill then pass.

April 2, 2009

Substitute offered

To replace the previous version of the bill with one that empower a borrower who is eligible for a for an FDIC "workout" to force a lender unwilling to go that route to undertake judicial foreclosure proceedings.

The substitute passed by voice vote

Amendment offered by Sen. Hansen Clarke (D-1)

To restore the House-passed provision that would empower a borrower who is eligible for a for an FDIC "workout" to force a lender unwilling to go that route into undertaking judicial foreclosure proceedings.

The amendment failed 16 to 21 (details)

Passed in the Senate 28 to 9 (details)

To mandate that before initiating “foreclosure by advertisement” proceedings, a mortgage lender or servicer must send a notice to the borrower, and if the borrower chooses to try to renegotiate the loan, prohibit the lender for proceeding with the foreclosure by advertisement for 90 days.

Received in the House

April 21, 2009

To concur with a Senate-passed version of the bill. The vote sends the bill to a House-Senate conference committee to work out the differences.

Failed in the House 43 to 64 (details)

April 23, 2009

Received

May 13, 2009

Passed in the House 93 to 15 (details)

To adopt a compromise version of the bill reported by a House-Senate conference committee. This would mandate that before initiating “foreclosure by advertisement” proceedings, a mortgage lender must give a delinquent borrower 90 days to negotiate a revision of the loan terms. If the borrower's debt service exceeds 38 percent of his or her gross income, the lender would be prohibited from proceeding with the foreclosure by advertisement unless the lender agreed to a "cram-down" revision of the loan bringing the debt service down to that level. (If the institution holding the loan had accepted federal "bail-out" money the loan revision would be on terms dictated by federal regulations.) However, a lender unwilling to accept revision of the loan terms could still undertake judicial foreclosure proceedings, which are more costly and time consuming than foreclosure-by-advertisement.

Received in the Senate

May 19, 2009

Passed in the Senate 36 to 0 (details)

Signed by Gov. Jennifer Granholm

May 20, 2009