December 04, 2007
December 4, 2007
LANSING - Governor Jennifer M. Granholm today applauded the state House for passing bills that would help protect Michigan homeowners facing mortgage foreclosures by offering new refinancing options and called on the state Senate to take swift action on the proposals. The legislation would 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 mortgage tools to help protect hard-working homeowners who are facing mortgage foreclosures," Granholm said. "I applaud the House for passing bills that would put this program in place to protect Michigan families; now the Senate needs to take swift action as well."
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.
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.
"During these difficult economic times, Michigan's working families are struggling to make ends meet, and too many of our middle-class families are at risk of losing their homes and seeing the American Dream slip away," said Majority Floor Leader Steve Tobocman (D-Detroit). "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, or have missed mortgage payments, our new legislation will provide an important avenue to refinance at more reasonable 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 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.
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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