New programs part of "Save the Dream" campaign to protect families
DETROIT - Governor Jennifer M. Granholm today announced plans to assist Michigan homeowners facing mortgage foreclosure by offering new refinancing options to protect their home ownership. The programs will be administered by the Michigan State Housing Development Authority (MSHDA) in conjunction with its Save the Dream public awareness campaign to help citizens avoid foreclosure. State House and Senate Democratic leaders joined Granholm for the announcement.
"In this tough economy, we need to assist hard-working Michigan families who are falling victim to mortgage foreclosures," Granholm said. "These initiatives will protect families from losing their homes and work to stabilize Michigan's housing market."
The two MSHDA initiatives are:
- The Adjustable Rate Mortgage (ARM) Refinance Program that will assist homeowners, who have an ARM, in refinancing to a lower-interest, fixed-rate loan;
- The Rescue Refinance Program that will assist individuals who have a delinquency on their mortgage and who are at risk of losing their home.
To qualify for one of the new loan products, which will require legislative approval, homeowners must meet the same income and sales price limits as other MSHDA loan products require. Household income must be under $72,250, and the purchase price of the home cannot exceed $216,750.
The initiatives will be funded by taxable bonds, and homeowners will be responsible for paying off the full value of their refinanced mortgages. Rates for the programs will be aggressively priced, ensuring below industry market rates.
"Statistics show that foreclosures occur in communities that have the highest poverty levels, and that is why we are targeting our public awareness campaign to 20 cities across Michigan, including the eight Cities of Promise," said MSHDA's Executive Director Michael R. DeVos. "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."
According to Michigan's banking data, foreclosures in the state have nearly doubled since 2006, bourgeoning from just over 42,000 to a projected 83,000 foreclosures by the end of 2007. The foreclosure rate in Detroit is the highest in the nation, and 62 percent of the sub-prime loans have been made to African American residents.
"During these difficult economic times, Michigan's middle-class families struggle to make ends meet, and too many of our working families are at risk of losing their homes and seeing the American Dream slip away," said State Representative Steve Tobocman. "House Democrats have been leading the way in protecting consumers from the reach of reckless lending practices. In those cases when consumers are already stuck with adjustable-rate mortgages that now threaten their financial security, our new legislation will provide an important avenue to refinance at more reasonable rates."
Citizens can find more information and receive assistance as well as access highly trained counselors at www.michigan.gov/mshda- click on the Save the Dream icon.
"Protecting the American dream of home ownership is critical to the health of our economy," said Senator Tupac Hunter (D-Detroit). "This legislation will help people save their houses by creating the opportunity for manageable mortgages."
MSHDA is a quasi-state agency that provides financial and technical assistance through public and private partnerships to create and preserve safe and decent affordable housing, engage in community economic development activities, and address homeless issues. MSHDA's loans and operating expenses are financed through the sale of tax-exempt and taxable bonds and notes to private investors, not from state tax revenues.
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