By Brad Thompson
CEO, Legal News
At a time in our democracy when disinformation, half-truths and intentional misdirection are rampant, it cannot be more critical to find reliable methods of maintaining an informed citizenry.
Public notices have served as one such method since before the country’s founding.
Under the current and outdated Revised Judicature Act, foreclosure notices are required to contain only the names of the parties to the mortgage, a description of the property and the current amount due under the mortgage, but it had been a long-standing practice in the industry to include additional non-statutory language to assist borrowers, lenders and the public. In the past few years, however, due to litigation against attorneys placing foreclosure notices, much of that valuable language has been stripped out. The lawsuits claim notices violate the Federal Fair Debt Collection Act when the notices include non-statutory language, even if the language is helpful. This has resulted in foreclosure notices that offer the only barest of information and do not adequately serve the homeowners, potential bidders and other members of the public.
A citizenry is better informed through good public notice and the current requirements for foreclosure notices in Michigan are inadequate toward that objective.
Michigan House Bill 4306 currently in the Michigan House of Representatives would amend the Act to require additional information with the aim of protecting the borrower and potential bidders for the property. The bill would require a foreclosure notice include the following information consistent with the industry’s prior practice and incorporate best practice language from around the country:
• The street address of the property;
• Information on how a borrower can contact the lender and attorney for the foreclosing property;
• Information for borrowers in active military service;
• The statement: “This firm is a debt collector attempting to collect a debt. Any information we obtain will be used for that purpose”;
• Information on how the borrower can reference the Michigan State Housing Development Authority’s website for information about local resources; and
• Information about auction sales and bidding process, including closing time.
The legislation, sponsored by Rep. Triston Cole (R-Antim County), would align Michigan with a number of other states that require notices contain a range of information critical to consumer protection.
Good public notices are integral to democratic governance and stem from the right to “due process of law” guaranteed by the federal and state constitutions. Due process of law protects Americans’ rights from arbitrary or wrongful actions.
Public notices play a vital role in both substantive and procedural due process because they provide a window into government actions and also afford notice to citizens of actions about to take place, so they may exercise their constitutional right to be heard. Importantly, notification not only informs the individual or entity most directly affected, but also the general public, which has an interest in knowing how public powers are being used.
Requiring more information in foreclosure notices ensures that Michigan residents are more aware and better armed with knowledge to protect their rights. The state legislature would do right by their constituents to pass HB 4306..
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