Michigan Nonrecourse Mortgage Loan Act to be Sent to Governor for Signature

Earlier this month, we reported to you on the bipartisan legislation introduced in the Michigan Legislature known as the Nonrecourse Mortgage Loan Act (the “Act”).

The Act has been approved overwhelmingly by both chambers of the Michigan Legislature and will be presented to the Governor’s office for signature. It is expected that the legislation will be signed into law within the next several business days.

The Act as approved by the House of Representatives will be enrolled by the Michigan Senate and presented to the Governor’s office without any substantive changes to the provisions summarized in our prior report. Once signed into law, the Act will, among other things, effectively overturn the decisions rendered in Wells Fargo Bank, NA v. Cherryland Mall Ltd. P’ship (Cherryland) and 51382 Gratiot Avenue Holdings, LLC v. Chesterfield Development Company, LLC, et al. (Chesterfield) and make the deficiency judgments rendered in those cases unenforceable.

Given the unique nature of the Act, future challenges to its validity are possible. Dykema will continue to monitor these issues and provide further updates and analysis. If you are interested in the impact of the Act on your specific loan or circumstances, you may contact Adam Fishkind at 248- 203-0749, Brian Page at 616-776-7509 or your regular Dykema contact. Questions regarding the legislative process may be directed to Steven Liedel at 517-374-9184.

_{As part of our service to you, we regularly compile short reports on new and interesting developments and the issues the developments raise. Please recognize that these reports do not constitute legal advice and that we do not attempt to cover all such developments. Rules of certain state supreme courts may consider this advertising and require us to advise you of such designation. Your comments are always welcome. © 2012 Dykema Gossett PLLC.}