Snyder tells Legislature to fix vague new bills

By Gary Gosselin

Dolan Media Newswires

Michigan's legislators passed foreclosure bills to keep a six-month redemption period, but Gov. Rick Snyder said to go back and fix vague language.

Provisions in one of the four bills allow lenders to inspect the home--unannounced--and take possession if they find any damage.

"The new legislation should clearly state what constitutes a reasonable inspection, including what notice must be given and how frequently such inspections can occur," Snyder wrote in a letter to legislators when he signed the bills July 3.

"In addition, the bill should ensure that measures that responsible Michiganders may take to protect their property (for instance, boarding up a window broken by vandals) are distinguished from malicious damage, which requires a swift and decisive response."

A spokesperson for Senate Majority Leader Randy Richardville, R-Monroe, told Michigan Lawyers Weekly that the caucus planned to meet July 17, and his office will "talk to the bill sponsors and see how and if they would like to move forward with that package."

The bill most in question, Senate Bill 383 (now PA 104), sponsored by state Sen. Darwin Booher, R-Evart, keeps in place a 180-day, post-foreclosure period for owners to reclaim or short sell a home. It allows a purchaser to inspect a home during that period at any time and permits the owner to evict a resident if certain damage exists to the property.

SB 380, sponsored by Richardville, extends until Jan. 10, 2014, a 90-day pre-foreclosure negotiation period allowing homeowners to seek loan modifications with lenders. It is now PA 103.

House Bill 4765, sponsored by state Rep. Jeff Farrington, R-Utica, extends until June 30, 2014, the sunset on a 2009 law in which mortgage lenders must attempt to negotiate revisions to delinquent loans before they can proceed to a "foreclosure by advertisement." It is now PA 105.

HB 4766, sponsored by state Rep. Mike Callton, R-Nashville, establishes conditions that certain foreclosing parties must meet in order to foreclose on property in which the first notice was published after Jan. 9, 2014. It is now PA 106.

The legislation was generally a good idea and necessary, but parts were vague, said Jessica AcMoody, policy and program specialist for the Michigan Foreclosure Task Force, a nonpartisan nonprofit that works to keep people in their homes when possible.

"After foreclosure, there's a six-month redemption period, they try to get money [to redeem], do a short sale, find a place to live," AcMoody said. "But this [legislation] allows whoever owns the house to make inspections at any point and then if they find any damage, they are allowed to make the [homeowner] leave within 10 days. ... The issue we have is the definition is pretty vague, it's not very specific, and leaves a lot of room for interpretation, and that's what were concerned about."

The other concern, she said, is allowing unannounced inspections and no clear statement of what constitutes a reasonable inspection.

"The governor's response after the bills was pretty clear," she said.

Published: Thu, Jul 18, 2013

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