Public Act 31 of 2009

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• Introduced by Rep. Bert Johnson (D) on February 24, 2009, 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 House Banking and Financial Services Committee on February 24, 2009.
  • Reported in the House on March 5, 2009, with the recommendation that the substitute (H-1) be adopted and that the bill then pass.
  • Substitute offered in the House on March 11, 2009, 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 This version was subsequently superseded by another substitute with other detail changes.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 in the House on March 11, 2009.
  • Substitute offered by Rep. Andy Coulouris (D) on March 11, 2009, 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 in the House on March 11, 2009.
  • Amendment offered by Rep. Darwin Booher (R) on March 11, 2009, 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 in the House on March 11, 2009.
• Passed 74 to 34 in the House on March 11, 2009.
  Who Voted "Yes" and Who Voted "No"
• Received in the Senate on March 12, 2009.
  • Referred to the Senate Judiciary Committee on March 12, 2009.
    • Reported in the Senate on March 26, 2009, with the recommendation that the substitute (S-1) be adopted and that the bill then pass.
  • Substitute offered in the Senate on April 2, 2009, 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 in the Senate on April 2, 2009.
  • Amendment offered by Sen. Liz Brater (D) on April 2, 2009, to require a mortgage lender who has foreclosed on a property to pay 1 percent of the proceeds realized in the subsequent sale of the property into a state fund, which would then give the money to the Legal Services of Michigan organization to represent delinquent borrowers in foreclosure proceedings. The amendment failed 16 to 21 in the Senate on April 2, 2009.
    Who Voted "Yes" and Who Voted "No"
  • Amendment offered by Sen. Liz Brater (D) on April 2, 2009, to prohibit a mortgage lender who has foreclosed and realized less on the subsequent sale of the property than the amount owed from suing the borrower for the deficiency if the borrower had been eligible for an FDIC "workout". The amendment failed 16 to 21 in the Senate on April 2, 2009.
    Who Voted "Yes" and Who Voted "No"
  • Amendment offered by Sen. Tupac Hunter (D) on April 2, 2009. The amendment failed 16 to 21 in the Senate on April 2, 2009.
    Who Voted "Yes" and Who Voted "No"
  • Substitute offered by Sen. Hansen Clarke (D) on April 2, 2009, to adopt a version that would give a judge the power to impose a two year moratorium on foreclosing on a mortgage on which the borrower is delinquent under the terms of the loan. The substitute failed 16 to 21 in the Senate on April 2, 2009.
    Who Voted "Yes" and Who Voted "No"
• Passed 30 to 7 in the Senate on April 2, 2009, 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.
  Who Voted "Yes" and Who Voted "No"
• Received in the House on 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 43 to 64 in the House on April 21, 2009.
  Who Voted "Yes" and Who Voted "No"
• Received in the House on May 13, 2009.
• Passed 93 to 15 in the House on May 13, 2009, 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.
  Who Voted "Yes" and Who Voted "No"
• Received in the Senate on May 19, 2009.
• Passed 36 to 0 in the Senate on May 19, 2009, 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.
  Who Voted "Yes" and Who Voted "No"
• Signed by Gov. Jennifer Granholm on May 20, 2009.