HB 5152 — Civil procedure: foreclosure; distribution of proceeds from mortgage foreclosure auctions; modify. Amends sec. 3208 of 1961 PA 236 (MCL 600.3208) & adds secs. 3214 & 3222. TIE BAR WITH: HB 5153'25

HB-5152, As Passed House, July 1, 2026 SUBSTITUTE FOR HOUSE BILL NO.

If no CCP H00820'25 (H-2)(H-4)_HB5152_APH_1 abk30c02augs 1 newspaper is published in the county, the notice shall must be published in a newspaper published in an adjacent county.

(1) IfExcept as provided in subsection (10), if a mortgagor, the mortgagor's heirs or personal representative, or any person that has a recorded interest in the mortgaged premises that was obtained before a notice of foreclosure is recorded under section 3208(b),3208(b) conveys the mortgaged premises after the notice of foreclosure is recorded and before the foreclosure sale is conducted under section 3216, the grantee is liable to the grantor for damages as provided in this section,section unless the grantee provides a notice of rights that satisfies all of the requirements of subsection (2) to the grantor before execution of the instrument of conveyance, but not before the cooling-off period under subsection (3) has elapsed.

CCP H00820'25 (H-4)_HB5152_APH_1 02augs 1 (c) The notice must be signed and dated by each grantor.

CCP H00820'25 (H-2) abk30c 1 (d) A copy of the fully executed notice, signed and dated by all parties, must be provided to each grantor at the time of signing.

(4) The existence of a notice signed under this section is not CCP H00820'25 (H-4)_HB5152_APH_1 02augs 1 a defense against a claim of fraud, duress, misrepresentation, or CCP H00820'25 (H-2) abk30c 1 unconscionability, and does not preclude any other remedy at law or equity available to the grantor.

(a) The measure of damages is the fair market value of the premises at the time of conveyance,conveyance less the outstanding mortgage balance as stated in a notice of foreclosure recorded under section 3208(b),3208(b) less the consideration actually paid by the grantee to the grantor.

Competent evidence includes, andbut is not limited to, a retrospective appraisal by a licensed appraiser and comparable sales data for similar properties in the same area within a reasonable time of the conveyance.

(i) The grantee is a person other than an individual, and the grantee's stated or apparent business purpose involves acquiring CCP H00820'25 (H-4)_HB5152_APH_1 02augs 1 distressed or foreclosed properties.

CCP H00820'25 (H-2) abk30c 1 (ii) The grantee, or a beneficial owner or controlling person of the grantee, has acquired more than 1 interest in mortgaged premises during a foreclosure gap period within the 3 years preceding the conveyance at issue.

(6) AnyAn individual who is a beneficial owner of, or who exercises control over the management or operations of, an entity that is subject to this section is jointly and severally liable with the entity for all damages and attorney fees awarded under this section.

(7) It is an affirmative defense to liability under this section that the grantee had no actual knowledge of the recorded notice of foreclosure at the time the instrument of conveyance was CCP H00820'25 (H-4)_HB5152_APH_1 02augs 1 executed.

For purposes of this subsection, a grantee who conducted CCP H00820'25 (H-2) abk30c 1 a bona fide search of the register of deeds index before closing and found no recorded foreclosure notice is presumed to have had no actual knowledge of the pending foreclosure.

YOU SHOULD SEEK LEGAL COUNSEL OR CONTACT A MSHDA-CERTIFIEDHUD-CERTIFIED HOUSING COUNSELOR BEFORE SIGNING ANY DOCUMENTS.

You are encouraged to obtain an independentCCP appraisalH00820'25 before(H-4)_HB5152_APH_1 signing.)02augs CCP1 H00820'25independent (H-2)appraisal abk30cbefore 1signing.) 3.

$__________________ (This is the approximate net amount of equity you are giving up, after accounting for the purchase price you are receiving.) This document serves as a formal notice of certain rights that will be forfeited onupon the sale of this property.

This right is irrevocably forfeited onupon your completion of the sale.

If the home is sold at public auction, and the sale price is greater than the balance of CCP H00820'25 (H-4)_HB5152_APH_1 02augs 1 the mortgage, you may be entitled to collect the remaining sale CCP H00820'25 (H-2) abk30c 1 proceeds.

(10) ItThis issection andoes affirmativenot defenseapply toif liabilitythe undergrantee subsectionis (5) that the granteeperson providedforeclosing the grantormortgage aor noticeis ofa rightsperson that containedhas allan completedinterest propertyin value disclosures required under subsection (8), the grantorproperty signedthat andis datedsubordinate theto notice, the cooling-offinterest periodof under subsection (3) was observed, and the defectperson didforeclosing not mislead or prejudice the grantor.mortgage.

(11) NotIt lateris thanan 30affirmative daysdefense afterto executionliability ofunder ansubsection instrument(5) of conveyance that isthe subjectgrantee toprovided this section, the granteegrantor shalla recordnotice theof instrument,rights withthat thecontained fullyall executedcompleted noticeproperty ofvalue rightsdisclosures required under subsection (1)(8), attached,the withgrantor signed and dated the registernotice, ofthe deedscooling-off period under subsection (3) was observed, CCP H00820'25 (H-2)(H-4)_HB5152_APH_1 abk30c02augs 1 forand the countydefect ordid countiesnot inmislead whichor prejudice the premisesgrantor. are located.

(12) ANot granteelater whothan fails30 todays complyafter withexecution subsectionof (11)an isinstrument liableof toconveyance thethat grantoris forsubject ato civilthis penaltysection, of $50.00 for each day the failuregrantee continues,shall beginningrecord on the thirty-firstinstrument, daywith after execution and ending on the datefully theexecuted instrument and attached notice areof recorded,rights notrequired tounder exceedsubsection $25,000.00(1) forattached, eachwith instrument,the andregister liableof deeds for reasonablethe attorneycounty feesor andcounties costsin ifwhich the grantorpremises prevails.are located.

(13) A grantee that fails to comply with subsection (12) is liable to the grantor for a civil penalty of $50.00 for each day the failure continues, beginning on the thirty-first day after execution and ending on the date the instrument and attached notice are recorded, not to exceed $25,000.00 for each instrument, and liable for reasonable attorney fees and costs if the grantor prevails.

(13)(14) The period of limitations for an action under subsection (5) does not begin to run until both the instrument of conveyance and the notice of rights required under subsection (1) are recorded as required under subsection (11).(12).

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