Senate Passes Latest Foreclosure Reforms, Headed to the Governor Soon 

The legislation that was drafted to address lingering concerns following the recent sunset of the state’s 90-day pre-foreclosure workout law and creation of a purchaser’s right to inspect properties during the statutory redemption period was passed by the Senate as a whole on Thursday, April 24. House Bill 5277 was introduced by state Rep. Mike Callton, R-Nashville, earlier this year. 

Under the legislation, the purchaser may send a simple notice to the homeowner that communicates that the home is sold, along with certain other disclosures. If a purchaser provides this required notice after foreclosure sale, the bill authorizes an initial interior inspection to establish the condition of the premises. Periodically throughout the redemption period, the purchaser may request proof of the continued status of the interior of the property and if such is not provided or indicates that damage occurred or may be imminent, a subsequent inspection may be conducted. Unlimited exterior inspections of a property are allowed. In any case, if damage to the property has occurred or is imminent, the purchaser may bring an action for possession of the property and extinguish the remaining redemption rights in the property. Further, if the initial notice has been provided, the borrower will have to notify the purchaser 10 days before vacating the property and provide a reasonable opportunity to secure the property – if not, a legal presumption is created that the borrower is liable for damage during the redemption period, that they would have to disprove in court.

The legislation must travel back to the House for concurrence, and then on to the Governor’s desk.


Submissions to Monitor may be emailed. Bryan Laviolette is the editor of Monitor. Contact him by email or call (800) 262-6285, ext. 233. The newsletter of the Michigan Credit Union League is published Monday mornings or Tuesday mornings when Monday is a holiday. There is no Monitor the week after Christmas and the week after the Annual Convention and Exposition. The MCUL reserves the right to edit submissions for clarity and space.
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