LANSING – The federal government should transfer management of the housing bailout portion of the giant financial bailout package to the states, Governor Jennifer Granholm has said in an interview with Michigan Public Radio.
All the states have housing arms of their governments and once the federal government recreates many of the mortgages that now face foreclosure it should allow the states to work with the homeowners to help keep them in their houses.
In Michigan’s case much of that help would go through the state’s Save the Dream program in the Michigan State Housing Development Authority.
Congress passed legislation that will authorize spending up to $700 billion to shore up the nation’s financial structure. Initially, the proposal would have purchased up to $700 billion worth of bad or poorly performing debt, but the federal government appears to be revising some of its proposals. Final rules and regulations for how the funding would be invested have not been completed.
Granholm said in the interview with Michigan Public Radio that she advocates the federal government setting aside as much as $300 billion for the states to manage.
The states would have to work with the federal government because in recent years all the old ways of selling mortgages were largely abandoned as financial companies packaged portions of higher-risk loans with portions of other loans into investment instruments.
The federal government will have to reconstruct many of the loans for the states or anyone else to be able to manage, Granholm said. But she also said there should be at least a short-term moratorium on foreclosures so homeowners can get the chance to rework the loans, she said.
“We can help refinance these loans,” Granholm said and work with the homeowners to help insure they do not lose their houses.
This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com
a>>
