Governor To Convene Workgroup on 'Post-Foreclosure Inspection' Cleanup Legislation 

Prior to the summer recess, the state Legislature enacted significant foreclosure process reforms. Senate Bills 380 and 383, and House Bills 4765 and 4766, backed by the MCUL & Affiliates, repeal the state’s 90-day pre-foreclosure workout law upon the upcoming effective date of the new CFPB mortgage servicing regulations, and provide for a new right of inspection for foreclosed properties after the sheriff sale and periodically throughout the redemption period.

If the purchaser at sale finds that damage has occurred or is imminent, they may commence an early action for summary possession of the property to take it back and extinguish any remaining redemption period.

While the bills were enacted, the limited time frame at the end of the spring session period did not allow for several possible amendments, to better define the rights of purchasers and homeowners. Some concerns from consumer groups centered on a need to provide reasonable notice of inspections or perhaps place a reasonable cap on the number of regular inspections, with exception for emergency situations where damage or imminent damage is reasonably suspected.

Others suggested that simple notice to the homeowner that a sale has occurred would be appropriate, and would assist both sides in a foreclosure situation in facilitating necessary notices and communications. From the industry side, the homeowners’ right to cure damage prior to the summary possession action needs to be reworked, and stronger liability provisions against those borrowers who abandon a property without notice to the purchaser would be very beneficial.

To begin the process of addressing any remaining concerns, Snyder has requested that lawmakers, legislative staff, and interest groups involved in the passage of the original legislation convene on Tuesday, July 23, to discuss any necessary or desirable changes to the recently passed law, with the end goal of passing any cleanup legislation prior to the effective date of the package next January. MCUL will be a primary participant in this work group, and will work to protect the efficacy of the new remedy provided by SB 383, while keeping an open mind toward reasonable protections that will benefit the consumer as well as the credit unions that must deal with the properties in question.


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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