LANSING – Stepping in where the federal government has failed to act, State Representative Barb Byrum (D-Onondaga) today supported an aggressive plan to fight the epidemic of foreclosures 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.
"It's become clear that the federal government is not going to do what it takes to protect Michigan homeowners," Byrum said. "Foreclosures affect everyone in a neighborhood – when homes are abandoned, property values are lowered. By passing this plan, we will make our communities stronger and healthier."
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.
"During these difficult financial times, we must support Michigan's working families and help them keep their homes as they struggle to make ends meet," Byrum said. "This plan puts Michigan at the forefront of states' efforts to protect Michigan's working families from losing their piece of the American Dream."
This plan builds on the Michigan Home Loan Protection Act, a House legislative package announced this summer. The Michigan Home Loan Protection Act will:
- Ban predatory lending practices, such as encouraging borrowers to default.
- Protect consumers from being steered toward high-cost loans when they would otherwise qualify for a traditional loan.
- Give aggrieved homeowners legal recourse so they can independently enforce these consumer protections against unscrupulous lenders.