June 28, 2007, Introduced by Senators CHERRY, JANSEN, OLSHOVE, PRUSI, SWITALSKI and WHITMER and referred to the Committee on Appropriations.
A bill to amend 1977 PA 135, entitled
"An act to prohibit certain mortgage lending practices by a credit
granting institution; to prescribe the powers and duties of the
commissioner of the financial institutions bureau in relation to
those practices; to permit the establishment of local mortgage
review boards; and to provide remedies and penalties,"
(MCL 445.1601 to 445.1614) by amending the title, as amended by
1993 PA 43, and by adding sections 2b, 2c, and 2d.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
TITLE
An act to prohibit certain mortgage lending practices by a
credit granting institution; to prescribe the powers and duties of
the commissioner of the financial institutions bureau in relation
to those practices; to permit the establishment of local mortgage
review boards; to provide for the collection of an estate
preservation premium; to create the estate preservation fund and
provide for the expenditure of the fund; to prescribe the powers
and duties of certain state departments and agencies; to authorize
the promulgation of rules; and to provide remedies and penalties.
Sec. 2b. (1) Beginning January 1, 2008, a credit granting
institution shall charge each residential mortgagor who elects to
participate in an estate preservation program a monthly premium of
$1.00 for a mortgage with a term of 360 months. If the term of the
mortgage is less than 360 months, a credit granting institution
shall charge each residential mortgagor a monthly estate
preservation premium in an amount that will result in a total sum
of $360.00 in premium payments over the term of the mortgage. If
the term of the mortgage is greater than 360 months, the credit
granting institution shall not charge the estate preservation
premium after the total sum of $360.00 in estate preservation
premiums has been paid. The total amount of estate preservation
premiums required to be paid by an individual with respect to a
parcel of residential real estate shall not exceed $360.00. If
there are multiple mortgagors of a residential mortgage, the estate
preservation premium under this subsection shall be assessed
against each mortgagor individually.
(2) A credit granting institution is not required to comply
with subsection (1) if the mortgagor executes an affidavit on a
form prescribed by the department of community health stating that
the mortgagor has already paid the total sum of $360.00 in estate
preservation premiums with respect to the residential real estate.
The credit granting institution shall promptly transmit the
affidavit to the department of community health.
(3) If a mortgagor executes an affidavit on a form prescribed
by the department of community health stating that the mortgagor
has paid total estate preservation premiums in an amount less than
$360.00 with respect to the residential real estate, the credit
granting institution shall collect the balance of the premiums in
the manner prescribed in subsection (1).
(4) A credit granting institution shall deposit the estate
preservation premiums that it collects under this section into the
estate preservation fund created in section 2c.
Sec. 2c. (1) The estate preservation fund is created within
the state treasury.
(2) The state treasurer shall deposit money received from a
credit granting institution under section 2b and may receive and
deposit money or other assets from contributions from any source
into the estate preservation fund. The state treasurer shall direct
the investment of the estate preservation fund. The state treasurer
shall credit to the estate preservation fund interest and earnings
from fund investments.
(3) Money in the estate preservation fund at the close of the
fiscal year shall remain in the fund and shall not lapse to the
general fund.
(4) The department of community health shall be the
administrator of the fund for auditing purposes.
(5) The department of community health shall expend money from
the estate preservation fund, upon appropriation, for 1 or more of
the following purposes:
(a) To fund long-term care services.
(b) To make any payment required to be paid to the United
States in compliance with section 1917 of title XIX of the social
security act, 42 USC 1396p.
Sec. 2d. (1) The department of community health shall
establish a program that allows an individual who owns a possessory
interest in residential real estate, other than a lessee interest,
that is not subject to estate preservation premium payments under
section 2b to pay the equivalent of 360 monthly estate preservation
premiums into the estate preservation fund established in section
2c.
(2) The department of community health may promulgate rules to
implement this section according to the administrative procedures
act of 1969, 1969 PA 306, MCL 24.201 to 24.328.
(3) Residential real estate for which the estate preservation
premium has been paid in full by an individual is not subject to
estate recovery under section 1917 of title XIX of the social
security act, 42 USC 1396p, upon the death of the individual.
Residential real estate for which the estate preservation premium
has not been paid in full by an individual at the time of the death
of the individual is not subject to estate recovery if the
individual was currently making estate preservation premium
payments according to section 2b or this section at the time of
death.