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HB 5153

Civil procedure: foreclosure; distribution of proceeds from mortgage foreclosure auctions; modify. Amends secs. 3240 & 3252 of 1961 PA 236 (MCL 600.3240 & 600.3252). TIE BAR WITH: HB 5152'25

2025-2026 Regular Session Introduced by Joey Andrews and 4 co-sponsors

Michigan bill modifies foreclosure auction proceeds distribution rules, potentially shifting priorities among homeowners, lenders, and municipalities claiming the sale funds.

REFERRED TO COMMITTEE ON HOUSING AND HUMAN SERVICES
#civilprocedure:foreclosure
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Bill Summary · HB 5153

Legislative bill overview

HB 5153 modifies Michigan's foreclosure procedures by amending statutes governing the distribution of proceeds from mortgage foreclosure auctions. The bill specifically revises sections 3240 and 3252 of the Michigan Court Rules, which currently establish the order and method for distributing funds collected from foreclosed properties.

Why is this important

Foreclosure sale proceeds distribution directly affects homeowners losing properties, lenders recovering loans, and municipalities collecting property taxes. Changes to this process can significantly impact whether distressed borrowers receive remaining equity after a foreclosure sale or whether funds are redirected to other parties like unpaid property taxes or HOA fees.

Potential points of contention

  • Homeowner equity protection: Unclear whether amendments prioritize returning excess proceeds to former homeowners or allocate funds toward other creditors (municipalities, HOAs, junior lienholders)
  • Lender recovery priorities: Changes to the distribution waterfall could affect which creditors get paid first and whether mortgage lenders recover full loan amounts
  • Municipal revenue implications: Modifications may alter how quickly or completely cities/counties collect unpaid property taxes from foreclosure proceeds, impacting local government budgets

Compiled from official sources — confirm details with the bill’s official record.

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