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HB-5152, As Passed House, July 1, 2026
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SUBSTITUTE FOR
HOUSE BILL NO. 5152
A bill to amend 1961 PA 236, entitled
"Revised judicature act of 1961,"
by amending section 3208 (MCL 600.3208) and by adding sections 3214
and 3222.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3208. Notice that the a mortgage will be foreclosed under 1
this chapter by a sale of the mortgaged premises, or some part of 2
them, shall the premises, must be given by publishing doing all of 3
the following: 4
(a) Publishing the same notice for 4 successive weeks at least 5
once in each week , in a newspaper published in the county where 6
the premises included in the mortgage and intended to be sold, or 7
some part of them, the premises, are situated. located. If no 8
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newspaper is published in the county, the notice shall must be 1
published in a newspaper published in an adjacent county. In every 2
case within 3
(b) For residential property described in section 3214(9), 4
before the first publication of the notice under subdivision (a), 5
recording a true copy of the notice with the register of deeds for 6
the county or counties in which the premises are located. 7
(c) Not later than 15 days after the first publication of the 8
notice under subdivision (a), posting a true copy shall be posted 9
of the notice in a conspicuous place upon on any part of the 10
premises described in the notice. 11
Sec. 3214. (1) Except as provided in subsection (10), if a 12
mortgagor, the mortgagor's heirs or personal representative, or any 13
person that has a recorded interest in the mortgaged premises that 14
was obtained before a notice of foreclosure is recorded under 15
section 3208(b) conveys the mortgaged premises after the notice of 16
foreclosure is recorded and before the foreclosure sale is 17
conducted under section 3216, the grantee is liable to the grantor 18
for damages as provided in this section unless the grantee provides 19
a notice of rights that satisfies all of the requirements of 20
subsection (2) to the grantor before execution of the instrument of 21
conveyance, but not before the cooling-off period under subsection 22
(3) has elapsed. 23
(2) All of the following apply to a notice of rights required 24
under subsection (1): 25
(a) The notice must be a separate document from the instrument 26
of conveyance and any other document. 27
(b) The notice must be printed in not less than 14-point 28
boldfaced type. 29
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(c) The notice must be signed and dated by each grantor. 1
(d) A copy of the fully executed notice, signed and dated by 2
all parties, must be provided to each grantor at the time of 3
signing. 4
(e) Before presenting the notice to the grantor for signature, 5
the grantee must complete all blanks in the notice, including all 6
property value disclosures required by the notice language under 7
subsection (8). A notice presented with any required blank unfilled 8
does not satisfy the requirements of this section. 9
(f) The notice must identify the property by street address 10
and by each tax parcel identification number assigned to the 11
property. If the property consists of more than 1 parcel, the 12
notice must list every parcel identification number. If no street 13
address or parcel identification number has been assigned, the 14
notice must include the legal description of the property. A good-15
faith error in, or omission of, a parcel identification number does 16
not, by itself, make the notice noncompliant or give rise to 17
liability under subsection (5) if the property is otherwise 18
reasonably identified in the notice. 19
(3) A grantee shall not present an instrument of conveyance 20
subject to this section, or an agreement, option, or contract to 21
convey an interest subject to this section, to the grantor for 22
execution before 7 days after the grantor signed the notice of 23
rights required under subsection (1). An instrument of conveyance, 24
or an agreement, option, or contract to convey an interest, 25
executed in violation of this 7-day cooling-off period is a per se 26
willful violation under subsection (5)(c). This 7-day cooling-off 27
period is mandatory and cannot be waived. 28
(4) The existence of a notice signed under this section is not 29
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a defense against a claim of fraud, duress, misrepresentation, or 1
unconscionability, and does not preclude any other remedy at law or 2
equity available to the grantor. 3
(5) A grantee who fails to provide a notice of rights as 4
required under subsection (1) is liable to the grantor for damages 5
as follows: 6
(a) The measure of damages is the fair market value of the 7
premises at the time of conveyance less the outstanding mortgage 8
balance as stated in a notice of foreclosure recorded under section 9
3208(b) less the consideration actually paid by the grantee to the 10
grantor. As used in this subdivision, "consideration actually paid" 11
means cash or cash equivalent actually received by the grantor at 12
or before closing, not including any amounts paid by the grantee 13
directly to satisfy the mortgage or other liens encumbering the 14
premises. 15
(b) The grantor bears the initial burden of establishing a 16
reasonable estimate of the fair market value of the premises at the 17
time of conveyance by competent evidence. Competent evidence 18
includes, but is not limited to, a retrospective appraisal by a 19
licensed appraiser and comparable sales data for similar properties 20
in the same area within a reasonable time of the conveyance. Upon 21
the grantor establishing a reasonable estimate of fair market 22
value, the burden shifts to the grantee to rebut that estimate by a 23
preponderance of the evidence. 24
(c) If the court finds that the violation was willful, the 25
court shall award 2 times the damages calculated under subdivision 26
(a). A violation is presumed willful if any of the following apply: 27
(i) The grantee is a person other than an individual, and the 28
grantee's stated or apparent business purpose involves acquiring 29
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distressed or foreclosed properties. 1
(ii) The grantee, or a beneficial owner or controlling person 2
of the grantee, has acquired more than 1 interest in mortgaged 3
premises during a foreclosure gap period within the 3 years 4
preceding the conveyance at issue. 5
(iii) The notice of rights was backdated, as established by any 6
evidence, including, but not limited to, document metadata, witness 7
testimony, or inconsistency with other transaction documents. 8
(iv) The grantee took affirmative steps to prevent the grantor 9
from seeking legal counsel, including, but not limited to, 10
requiring same-day signing, misrepresenting the nature of the 11
documents, or representing that the notice of rights was not 12
required. 13
(v) The grantee failed to record the instrument of conveyance 14
and the notice of rights not later than 120 days after execution. 15
(d) In addition to damages under subdivision (a) or (c), the 16
court shall award the grantor reasonable attorney fees and costs if 17
the grantor prevails. 18
(6) An individual who is a beneficial owner of, or who 19
exercises control over the management or operations of, an entity 20
that is subject to this section is jointly and severally liable 21
with the entity for all damages and attorney fees awarded under 22
this section. A beneficial owner or controlling person is presumed 23
to have had actual knowledge of the recorded notice of foreclosure 24
at the time of the conveyance. This presumption may be rebutted by 25
clear and convincing evidence. 26
(7) It is an affirmative defense to liability under this 27
section that the grantee had no actual knowledge of the recorded 28
notice of foreclosure at the time the instrument of conveyance was 29
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executed. For purposes of this subsection, a grantee who conducted 1
a bona fide search of the register of deeds index before closing 2
and found no recorded foreclosure notice is presumed to have had no 3
actual knowledge of the pending foreclosure. 4
(8) A notice of rights required under subsection (1) must 5
contain the following language: 6
NOTICE TO SELLER: READ THIS DOCUMENT CAREFULLY. 7
YOU ARE SELLING YOUR HOUSE WHILE IT IS IN FORECLOSURE. THIS IS 8
A LEGAL AND FINANCIALLY SIGNIFICANT DECISION. YOU SHOULD SEEK LEGAL 9
COUNSEL OR CONTACT A HUD-CERTIFIED HOUSING COUNSELOR BEFORE SIGNING 10
ANY DOCUMENTS. 11
PROPERTY THIS NOTICE CONCERNS 12
STREET ADDRESS: ______________________________ 13
TAX PARCEL IDENTIFICATION NUMBER(S): 14
______________________________ 15
(IF THIS PROPERTY CONSISTS OF MORE THAN ONE PARCEL, LIST EVERY 16
PARCEL IDENTIFICATION NUMBER ABOVE. THIS NOTICE COVERS ALL PARCELS 17
LISTED.) 18
LEGAL DESCRIPTION (REQUIRED ONLY IF NO STREET ADDRESS OR 19
PARCEL NUMBER HAS BEEN ASSIGNED; MAY BE ADDED IN ANY CASE): 20
______________________________ 21
PROPERTY VALUE DISCLOSURE (TO BE COMPLETED BY THE BUYER) 22
1. CURRENT STATE EQUALIZED VALUE (SEV): $__________________ 23
(This amount is a matter of public record available from the 24
local assessor.) 25
2. APPROXIMATE MARKET VALUE (SEV x 2): $__________________ 26
(Multiplying the SEV by 2 provides an estimate of the 27
property's market value. This figure is an estimate only and may 28
not reflect actual market value. You are encouraged to obtain an 29
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independent appraisal before signing.) 1
3. PURCHASE PRICE OFFERED: $__________________ 2
4. OUTSTANDING MORTGAGE BALANCE FROM FORECLOSURE NOTICE: 3
$__________________ 4
(Amount claimed to be due on the mortgage at the date of the 5
notice, as published under section 3208 of the revised judicature 6
act of 1961, 1961 PA 236, MCL 600.3208.) 7
5. ESTIMATED EQUITY FORFEITED (Line 2 MINUS Line 4 MINUS Line 8
3): $__________________ 9
(This is the approximate net amount of equity you are giving 10
up, after accounting for the purchase price you are receiving.) 11
This document serves as a formal notice of certain rights that 12
will be forfeited upon the sale of this property. By signing a deed 13
and completing the sale of the property, you will be waiving and 14
relinquishing rights you may have under statute, as follows: 15
1. Right of Redemption: By selling the property, you 16
permanently waive any and all rights to redeem or reclaim the 17
property. The right of redemption allows a mortgagor, the property 18
owner, to reclaim a foreclosed property by paying off the 19
outstanding debt within a legally specified redemption period. This 20
right is irrevocably forfeited upon your completion of the sale. 21
2. Right to Occupancy During the Redemption Period: You 22
further acknowledge that any rights to remain in the property 23
during the redemption period will no longer be available to you. 24
Once the conveyance is complete, you forfeit any and all rights to 25
continue occupying the property. 26
3. Right to Surplus Proceeds: Your home may be worth more than 27
the outstanding balance of your mortgage. If the home is sold at 28
public auction, and the sale price is greater than the balance of 29
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the mortgage, you may be entitled to collect the remaining sale 1
proceeds. By selling the property before the public auction, you 2
will have no right to collect the surplus proceeds that may have 3
resulted from the auction sale. 4
By signing a deed or instrument of conveyance, which by law 5
may not be presented to you for signature until at least 7 days 6
after the date you sign this notice, you will be waiving all of the 7
above rights provided to you by statute. 8
YOU HAVE A 7-DAY COOLING-OFF PERIOD. 9
BY LAW, YOU CANNOT BE ASKED TO SIGN THE DEED OR INSTRUMENT OF 10
SALE UNTIL 7 DAYS AFTER YOU HAVE SIGNED THIS NOTICE. THIS PERIOD IS 11
TO GIVE YOU TIME TO UNDERSTAND YOUR RIGHTS AND SEEK HELP. 12
WARNING: THIS DOCUMENT MAY NOT BE BACKDATED. SIGNING THIS 13
DOCUMENT WITH A FALSE DATE IS FRAUD UNDER MICHIGAN LAW AND MAY 14
RESULT IN CRIMINAL PROSECUTION AND CIVIL LIABILITY. 15
(9) This section applies only to residential property that 16
does not exceed 4 units. For purposes of this section, property 17
that is used in part for nonresidential purposes is residential 18
property only if the residential use is the principal use of the 19
property. 20
(10) This section does not apply if the grantee is the person 21
foreclosing the mortgage or is a person that has an interest in the 22
property that is subordinate to the interest of the person 23
foreclosing the mortgage. 24
(11) It is an affirmative defense to liability under 25
subsection (5) that the grantee provided the grantor a notice of 26
rights that contained all completed property value disclosures 27
required under subsection (8), the grantor signed and dated the 28
notice, the cooling-off period under subsection (3) was observed, 29
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and the defect did not mislead or prejudice the grantor. 1
(12) Not later than 30 days after execution of an instrument 2
of conveyance that is subject to this section, the grantee shall 3
record the instrument, with the fully executed notice of rights 4
required under subsection (1) attached, with the register of deeds 5
for the county or counties in which the premises are located. 6
(13) A grantee that fails to comply with subsection (12) is 7
liable to the grantor for a civil penalty of $50.00 for each day 8
the failure continues, beginning on the thirty-first day after 9
execution and ending on the date the instrument and attached notice 10
are recorded, not to exceed $25,000.00 for each instrument, and 11
liable for reasonable attorney fees and costs if the grantor 12
prevails. A penalty under this subsection is in addition to, and 13
not instead of, any liability under subsection (5). 14
(14) The period of limitations for an action under subsection 15
(5) does not begin to run until both the instrument of conveyance 16
and the notice of rights required under subsection (1) are recorded 17
as required under subsection (12). 18
Sec. 3222. If a notice of foreclosure is recorded under 19
section 3208(b) and a sale scheduled in a notice under section 3212 20
is cancelled by the party foreclosing the mortgage, a notice 21
cancelling the notice of foreclosure must be recorded with the 22
register of deeds for the county or counties in which the premises 23
are located not later than 30 days after the sale is canceled. 24
Enacting section 1. This amendatory act does not take effect 25
unless House Bill No. 5153 of the 103rd Legislature is enacted into 26
law. 27