Members of the House Financial Services Committee and Senate Banking & Financial Institutions Committee have started internal discussions on Michigan’s 90-day pre-foreclosure communication law, in light of the pending effective date of the new federal mortgage servicing regulations issued by the CFPB earlier this year. The CFPB mortgage servicing requirements are similar in nature to the state law, and in some cases even more burdensome. However, Michigan’s law is currently scheduled to sunset on June 30, but the CFPB rule does not officially take effect until January 2014 and lawmakers are concerned about the gap.
MCUL has communicated its support for a sunset of the state law, and has also communicated its opposition to any “early compliance dates” for the CFPB’s regulation as an alternative – however, it appears that early conversations about enforcing early compliance in exchange for a permanent sunset have ceased, as attention now turns toward the mandatory 120-day period under the federal regulations and potential relief for financial institutions from the ever-lengthening and onerous foreclosure period. Discussions on the law and any related legislative measures will likely continue through April, with legislation expected to be introduced by early May at the latest.