MI SB0992

Prohibits use of post-closing solvency covenants (requirements that borrowers maintain adequate capital or ability to pay debts after loan funding) as exceptions to nonrecourse provisions in commercial mortgage loans on Michigan real property.

Declares any loan provision using a solvency covenant as a nonrecourse carveout invalid and unenforceable, recognizing that nonrecourse lenders assume the risk of borrower insolvency after loan origination.

Allows lenders to structure loans as fully recourse (with personal liability) if the loan documents do not contain nonrecourse provisions.

Applies retroactively to all nonrecourse loan documents in existence or entered into on or after the effective date of March 29, 2012, including pending claims and actions unless final judgment has been entered with all appeal rights exhausted.