LANSING – Homeowners facing foreclosures on their mortgages would have refinancing options through the Michigan State Housing Development Authority under legislation proposed Friday by Gov. Jennifer Granholm and legislative Democrats. Michigan has one of the nation’s highest foreclosure rates, ranking fourth, as the number has doubled since 2006 to an estimated 83,000 this year.

The proposals are intended to stabilize a real estate market hit hard by the collapse of sub-prime loans.

The bond-backed program through MSHDA will enable qualifying homeowners with high interest rates under adjustable rate mortgages to obtain below-market, fixed-rate loans. Another refinancing program is aimed at those who are at risk of losing their homes. Both are open to those meeting MSHDA qualifications: household income of under $72,250 and home values of no more than $216,750.

“In this tough economy, we need to assist hard-working Michigan families who are falling victim to mortgage foreclosures. These initiatives will protect families from losing their homes and work to stabilize Michigan’s housing market,” Granholm said.

MSHDA Executive Director Michael DeVos said the programs will be targeted to 20 cities where poverty rates are the highest. “Not only can MSHDA save the dream for those already facing foreclosure, but we can help others get safe and secure, long-term, fixed-rate mortgages,” he said.

“Federal policies have utterly failed to prevent the meltdown of the subprime mortgage market. This refinancing legislation puts Michigan at the forefront of states’ efforts to protect hard-working men and women from losing something they have spent their lives working for,” said Rep. Marc Corriveau (D-Northville).

Michigan ranks second in the nation when it comes to the percentage of subprime adjustable-rate mortgage delinquencies, according to MSHDA. The agency says that 17.7 percent of the mortgage delinquencies in the state are subprime adjustable-rate mortgage delinquencies.

The new proposals are in addition to a home loan protection plan House Democrats announced earlier this year, which bans predatory lending practices, discourage steering borrowers to high-cost loans when they qualify for traditional loans and give homeowners more protections against unscrupulous lenders.

The House Banking and Financial Services Committee will take testimony Tuesday on predatory lending practices and the Senate Banking and Financial Institutions Committee will hold a hearing Wednesday on new legislation regulating mortgage loan officers and providing new protections against unfair lending practices.

Senate Minority Floor Leader Buzz Thomas (D-Detroit) said, “The threat of foreclosure is real, and the effect on our economy is overwhelming.”

“Protecting the American dream of home ownership is critical to the health of our economy,” said Senator Tupac A. Hunter (D-Detroit). “This legislation will help people save their houses by creating the opportunity for manageable mortgages.”

Senate Democrats also sponsored legislation this week that would register and regulate mortgage loan officers and protect consumers from unfair lending practices.

Michigan Bankers Association President Dennis Coons said his organization is carefully monitoring all proposals dealing with the foreclosure problem, saying, “We as an industry want everyone to succeed in home ownership.”

Citizens can find more information and receive assistance as well as access highly trained counselors at Michigan.Gov/MSHDA Clicke Save the Dream icon.

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

a>>