Del Rio, 060969 MIAGO, AGO 4668

• Case Date: June 09, 1969
• Court: Michigan

Representative James Del Rio House of Representatives Lansing, Michigan AGO 4668 Opinion No. 4668 Michigan Attorney General Opinion June 9, 1969 USURY MORTGAGES. Loans secured by mortgages insured by the Federal Housing Administration are exempt from the provisions of the Usury Law.          Representative James Del Rio House of Representatives Lansing, Michigan           You have requested my opinion as to whether mortgages on properties located in the State of Michigan, insured by the Federal Housing Administration, are subject to Michigan's usury statutes. Michigan's usury statute is set forth in Act 326, P.A. 1966, as amended by Act 266, P.A. 1968, being M.C.L.A. § 438.31, M.S.A. 1969 Cum. Supp. §19.15(1) et seq. Section 1 of said act reads as follows:

"That the interest of money shall be at the rate of $5.00 upon $100.00 for a year, and at the same rate for a greater or less sum, and for a longer or shorted time, except that in all cases it shall be lawful for the parties to stipulate in writing for the payment of any rate of interest, not exceeding 7% per annum. This act shall not apply to the rate of interest on any note, bond or other evidence of indebtedness issued by any corporation, association or person, the issue and rate of interest of which have been expressly authorized by the Michigan public service commission or the corporation and securities bureau of the department of commerce, or is regulated by any other law of this state, or of the United States, nor shall it apply to any time price differential which may be charged upon sales of goods or services on credit. This act shall not be construed to repeal section 78 of Act No. 327 of the Public Acts of 1931, as amended, being section 450.78 of the Compiled Laws of 1948." (Emphasis added.)

In Straus v. Elless Co. (1929) 245 Mich. 558, the Michigan Supreme Court interpreted the predecessor to the present usury statute. Plaintiffs brought a suit for the collection of monies owed on bonds secured by a mortgage bearing a rate including discounts in excess of the statutory limit with the approval of the Michigan Securities...