Runestad, Johnson bills would help prevent foreclosures

LANSING, Mich. — Sens. Jim Runestad and Ruth Johnson introduced legislation Tuesday that would help to prevent foreclosures on Michigan homeowners.

Senate Bill 725, sponsored by Runestad, would improve foreclosure notice requirements.

“Michigan residents have told horror stories of the government abusing their power to foreclose on homes,” said Runestad, R-White Lake. “We must protect the most vulnerable in these situations — the poor, the elderly, and those whose first language isn’t English and have difficulty understanding their property taxes — against a government singling them out.

“Today’s legislation does just that.”

Johnson sponsored SB 726, which would require that property tax payments made on current amounts be applied toward delinquent amounts when possible to prevent foreclosure and redeem the property.

“The idea that government can take someone’s home away even when they make a payment that should be sufficient to keep them out of foreclosure is reprehensible and morally indefensible,” said Johnson, R-Holly. “My bill will ensure that if someone makes a payment that is enough to stop foreclosure, an administrative loophole where the payment gets applied to a more recent tax bill won’t prevent them from saving their house.”

Runestad cited a situation in Oakland County in which officials foreclosed on a property with a tax debt of only $8.41 after the owner had made a payment on a current bill instead of paying off an older one. The county then sold the property for more than $24,000.

“If a property needs $10 to avoid being foreclosed and the owner mistakenly pays $100 toward their current property tax bill, then $10 should be subtracted to prevent the owner from losing his property,” Runestad said. “This is just common sense. The owner is paying the government to keep their home — they shouldn’t be penalized for sending a bill to their local township instead of their country treasurer.”

The measures also will provide notice revision requirements for interest amounts and new warning statements and will allow for property to be kept out of foreclosure if a payment was made to the local unit in error that could have been applied to redeem the property if it were made to the county.

SBs 725 and 726 have been referred to the Senate Finance Committee.