March 6, 2008
New programs part of "Save the Dream" campaign to protect families
LANSING - Governor Jennifer M. Granholm today applauded the state Senate for approving bills that will help protect Michigan homeowners facing mortgage foreclosures by offering them new refinancing options. The legislation, proposed by the governor last fall, will allow the Michigan State Housing Development Authority (MSHDA) to implement two new refinance loan programs as part of its Save the Dream public awareness campaign to help citizens avoid foreclosure.
"We have developed a great program and some great tools to help protect Michigan families who are falling victim to mortgage foreclosures," Granholm said. "I applaud the House and Senate for passing bills that will put this program in place to protect hard-working homeowners; I look forward to signing these bills once they reach my desk."
When passed, the bills create two new loan products:
- The Adjustable Rate Mortgage (ARM) Refinance Program that will assist homeowners who have an ARM in refinancing to a lower-interest, fixed-rate loan; and
- 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, homeowners must meet the same income and sales price limits as other MSHDA loan products require. Under the proposed legislation, however, the household income limit would increase to $108,000, and the purchase price limit of a home for a single family cannot exceed $224,500.
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.
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 one of the highest in the nation, and 62 percent of the sub-prime loans have been made to African American residents.
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 or call the Save the Dream hotline line toll free at 866-946-7432.
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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