Michigan's new bill could prove crucial for mortgage professionals, introducing online foreclosure sales and stricter notice rules. Here's what you need to know
Senate Bill No. 527 could change how Michigan handles foreclosure notices, introducing online sales and new notice requirements for mortgage professionals.
Introduced by Senator McBroom and referred to the Committee on Local Government, Senate Bill No. 527 proposes amendments to the Revised Judicature Act of 1961, specifically sections 3208 and 3212. The bill’s main goal is to update how notice of mortgage foreclosure by advertisement is given in Michigan, reflecting both traditional and digital methods.
Under the bill, notice that a mortgage will be foreclosed by sale must be published for four consecutive weeks in a newspaper in the county where the property is located. If there is no such newspaper, the notice must be published in a newspaper in an adjacent county. Within 15 days after the first publication, a true copy of the notice must be posted in a conspicuous place on the property described in the notice.
A new provision addresses online foreclosure sales. If the sale is to be held online, the person conducting the sale must post notice of the sale on the county’s website and may use any other means considered necessary to ensure public awareness of the sale.
The bill also specifies what must be included in the foreclosure notice. Required details are the names of the mortgagor, original mortgagee, and any foreclosing assignee; the date of the mortgage and its recording date; the amount claimed to be due; a property description that matches the mortgage; and the street address, if available. For mortgages executed after December 31, 1964, the notice must state the length of the redemption period. The notice must also include a statement about liability for property damage during the redemption period and, for residential mortgages, a statement for military service members on active duty.
The bill further requires that the notice include information about the public auction, specifying whether it will be in person or online, and providing instructions for participation. It also clarifies that the amount due may be greater on the day of sale and that winning the auction does not guarantee free and clear ownership of the property. The notice encourages potential buyers to contact the county register of deeds or a title insurance company for more information.
Another key point: the party foreclosing the mortgage cannot publish a notice in a newspaper in which it or its agent has a majority ownership interest.
Senate Bill No. 527 will not take effect unless Senate Bill No. 528 is also enacted. As of now, the bill has been introduced and referred to committee, with no final decision made.
For mortgage professionals, these proposed changes are directly relevant. They clarify notice requirements, address the rise of online foreclosure sales, and add safeguards for transparency and fairness. The bill does not address specific companies or monetary amounts, but it does update procedures that affect the entire mortgage industry in Michigan.
