LANSING – State Representative Richard E. Hammel (D-Mt. Morris Twp.) on Tuesday joined his House colleagues in passing an aggressive plan to fight the foreclosure epidemic by establishing programs to allow homeowners saddled with risky adjustable-rate mortgages (ARMs) and those who have missed mortgage payments to refinance and secure a fixed-rate loan. The plan, which will allow more Michigan residents to avoid losing their homes, is part of a comprehensive approach to help jumpstart the state's economy.
"People who saved money and worked hard to become homeowners need to have options when they are facing foreclosure," Hammel said. "These programs provide a way for our working families to rearrange their finances so they can meet their obligations, without costing taxpayers a cent. Preventing foreclosures must be a priority as we all work to revitalize our economy locally and statewide."
The plan allows at-risk low- and moderate-income borrowers – homeowners facing a spike in housing expenses due to changes in their adjustable-rate mortgage, or residents who have already missed payments due to financial constraints – to secure a fixed-rated loan through the Michigan State Housing Development Authority (MSHDA). The agency provides loans financed through the sale of tax-exempt and taxable bonds and notes to private investors – not from state tax revenues.
Michigan ranks fourth in the nation in foreclosures, with 13,415 foreclosure filings in October, according to the latest figures from RealtyTrac, an Irvine, Calif.-based online foreclosure firm. That represents a 63 percent increase from October 2006. The figures show that there is one foreclosure filing for every 224 households in Genesee County.
Hammel has also co-sponsored a House Resolution calling for private and public entities to work together to address the foreclosure crisis and promote a stronger commitment to home ownership, housing preservation and community development. The resolution seeks changes in state tax and housing policy to strengthen that are suffering from high rates of home mortgage foreclosure and tax delinquency.
"The foreclosure epidemic doesn't just affect the families who go through the devastation of losing their homes," said Hammel, who is Chair of Economic Development on the House Appropriations Committee. "It also reduces the property values of nearby homes and affects neighborhood safety."