AB 672

Under current law, if a mortgagee brings an action for foreclosure of a mortgage

on a residential property, the homeowner (mortgagor or borrower) is served with a

summons and complaint and the normal civil procedural rules of pleadings,

discovery of evidence, pretrial, and trial apply. If the court finds that the mortgagee

has the right to the foreclosure, the court issues a judgment for foreclosure of the

mortgage, which entitles the mortgagee to force a sale of the property after a

redemption period has ended.

This bill requires the plaintiff and the court to provide a written notice to the

residential property owner who is the defendant in an action for foreclosure. The bill

requires the notice to inform the residential property owner that he or she continues

to be the owner of the property, which includes the responsibility for the payment of

real estate taxes, until the property is sold under the foreclosure, the sale is

confirmed by the court, and the new owner records the deed with the register of

deeds. Under the bill, the plaintiff is required to include the notice with the summons

and complaint and the court is required to provide the notice at the time that the

court issues the judgment of foreclosure.

The bill prohibits the delay of a sheriff's sale of residential property beyond the

date originally scheduled for the sale unless the court authorizing the sale makes a

finding on the record that there is good cause for the delay. If a delay is permitted,

the bill requires the sheriff's sale to take place within 60 days after the original

postponed sale date.

Currently, if the court finds that a mortgaged property has been abandoned

after receiving evidence as to that fact, the court may enter judgment for foreclosure

and order the sale of the property within two months after the entry of the judgment.

This bill requires the court, before making a finding of abandonment, to receive

evidence from the defendant, if available, and the plaintiff, as to whether the

property is abandoned. The bill also requires the court, after finding that a property

has been abandoned and entering a judgment for foreclosure, to order that the sale

of the property take place between 45 days and 70 days after the judgment is entered.