Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

CU System
Mich CUs Testify For Homestead Exemption In Foreclosures
LANSING, Mich. (3/20/13)--The Michigan Credit Union League last week testified before the state House Committee on Tax Policy in support of legislation that would allow financial institutions to realize the full benefit of the principal residence exemption, or "homestead exemption," on foreclosed properties.

"This legislation would provide actual relief to credit unions that are forced to foreclose, despite their best efforts to keep the borrower in their home," MCUL CEO David Adams said.

MCUL officials were joined in their testimony by representatives from Michigan State University FCU, East Lansing, Mich. and E&A CU, Port Huron. (Michigan Monitor March 18). The legislation was also supported by the Michigan Association of Realtors and the Michigan Bankers Association, but was opposed by the state Department of Treasury.

Law enacted in 2012 allows financial institutions to file paperwork to technically retain the exemption so future buyers don't have disruptions or additional cost. However, the financial institution is still required to pay additional non-homestead amounts through a different statutory route.

The proposed legislation, sponsored by state Rep. Frank Foster (R-Petoskey), would eliminate the non-homestead requirement.

"The additional mills from the non-homestead rate represent conditional revenue, based on our members' decision whether or not to foreclose, and eliminating this requirement doesn't reduce the amount that would normally be due to the state under the homestead rate," Adams said.

The bill also would reduce the costs associated with unfortunate circumstances for borrowers and lenders, and would benefit communities by providing more flexibility to repopulate homes, Adams said.


RSS print
News Now LiveWire
Today's #NewsNow preview of @CUNA board chair Dennis Pierce's testimony before @SenateBanking http://t.co/XgQ81Fn7wR
36 minutes ago
Fazio: @TheNCUA supports Privacy Notice Modernization Act, which allows FIs to send privacy policy notifications only when policy is changed
41 minutes ago
Fazio: Hard to give timeline for when NCUA risk-based capital rule will be finalized...I can say it's the agency's top reg. priority
45 minutes ago
(2of2) NCUA is aware of importance of scaling regulatory, supervisory and assistance prgrms to address unique circumstances of small CUs.
56 minutes ago
.@TheNCUA's Larry Fazio: W/ 1/3 of CUs having less than $10M in assets and 2/3 of CUs having less than $50M in assets...(1of2)
57 minutes ago