LANSING – State Representative Barb Byrum (D-Onondaga) today joined Gov. Jennifer M. Granholm at a signing ceremony in Jackson to usher in new bipartisan laws that will allow homeowners saddled with risky adjustable-rate mortgages, and those who have missed mortgage payments, to refinance and secure a fixed-rate loan.
"The meltdown of the subprime mortgage market has had a devastating affect on Michigan's working families," Byrum said. "The federal government has utterly failed to protect our residents during this crisis. By signing these bills today to help keep families in their homes, we are taking the initiative to turn things around."
The plan allows at-risk low- and moderate-income borrowers – homeowners facing a spike in housing expenses due to 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.
The MSHDA program allows borrowers who meet income and credit score requirements to avoid dramatic increases in their housing expenses by securing a fixed-rated loan. It would allow homeowners who have missed payments on their adjustable-rate mortgages, and who are unable to work out an agreement with their lender to avoid a foreclosure, to apply for a fixed-rated loan.
Michigan ranked sixth nationwide for foreclosure filings in February, according to figures from RealtyTrac Inc. The Irvine, Calif.-based Web site reported that Michigan foreclosures were up 1.96 percent from January and up 17.84 percent from February 2007. According to a January 29 article in the Lansing State Journal, there were 1,757 Ingham County homes that were sold off in sheriff's sales in 2007, up 33.9 percent from 2006.
"Every time a foreclosure notice is issued, an entire neighborhood suffers," Byrum said. "Foreclosed homes mean lower property values and higher crime rates. This plan will help our working families reclaim their piece of the American Dream and build stronger neighborhoods."