What's going on with Foreclosure?

Current Policy & Events - June 19, 2008

Legislators are paying attention to the foreclosure crisis!

Both state and national legislators have been giving foreclosure and mortgage issues high priority. The pieces of legislation described below seek to improve lending and homeownership conditions, now and in the future - please stay involved with this important conversation!

Keep up-to-date on the latest legislation by visiting CEDAM's Policy page.

Foreclosure Prevention at the STATE level

"Michigan Home Loan Protection Act" (HB 5294-5310) passed the House!

This predatory lending legislation package will limit and regulate high-cost loans and require independent foreclosure prevention counseling, among many other important provisions. It is based on language from the Center for Responsible Lending that is used in several other states.
The act will help current and future borrowers avoid predatory lending and (ideally) foreclosure.
Click here for more information, as well as here for talking points on the bills, which passed the House on June 18.
Contact the Senators on the Senate Banking and Financial Institutions Committee and urge them to pass this act with strong consumer protections!

"Save the Dream" (PA 53 of 2008) is law

Save the Dream, which was signed into law on April 2, creates two refinancing options for homeowners. The Adjustable Rate Mortgage (ARM) Refinance program is for homeowners with an ARM and a credit score of at least 620. The Rescue Refinance program is for delinquent homeowners with a credit score of at least 575. Both refinance to 30-year mortgages at 6.625%.
MSHDA has established a hotline for consumers (866-946-7432) as well as a website which refers residents to MSHDA approved housing counselors in their community.
Save the Dream will help current homeowners who are in danger of losing their homes.
Check out MSHDA's Save the Dream website for more details.

"Mortgage Brokers, Lenders, and Servicers Licensing Act" (PA 59-71 of 2008) passed

This law, effective as of April 3, requires registration and licensing of loan officers in Michigan. It also prohibits and establishes penalties for fraud, deceit, or material misrepresentation by loan officers.
The act will help regulate lending and protect future borrowers. It does not help homeowners who are already struggling with their mortgages.
Read the press release for more information; click here to search for the full text.

Homeownership Preservation Fund (HB 5376)

This bill would create a Michigan Homeownership Preservation Fund, financed by civil fines.
The Fund could be used for: financial literacy programs, homeownership training, homeownership protection training, down payment assistance, and foreclosure avoidance loans and grants.
Click here for more information.
Take action! Contact members of the House Banking and Financial Services Committee and urge them to support the Homeownership Preservation Fund.

Two-year Foreclosure Moratorium (SB 1305, 1306, 1307)

SB 1306, sponsored by Sen. Hansen Clarke (D-Detroit), would turn non-judicial foreclosures into judicial foreclosures and impose a two-year stay. The companion bills address funding of loan guarantees and delays of property tax foreclosures, respectively.
The bills are awaiting hearing in the Senate Committee on Banking and Financial Institutions. Read the introduced bills here: 1305, 1306, & 1307.

Mortgage Appraisal Fraud Package (HB 4054-4055, 4083, 4409-4411; SB 342, 353, 356)

These bills would prohibit fraudulent mortgage appraisals in various situations and set penalties for violations. This would help prevent upside-down mortgages (where the borrower owes more than the property is worth).
To read about appraisal fraud, click here. To find out more about the bills, search for the bill numbers here.

Foreclosure Prevention Policy at the NATIONAL Level

"Foreclosure Prevention Act of 2008" (S. 2636)

This act will provide funding for foreclosure mitigation activities and redevelopment of foreclosed homes.
It is linked to the "Helping Families Save Their Homes in Bankruptcy Act of 2008" and the "Mortgage Disclosure Improvement Act of 2008."
To read more about the bill, search for bill number S. 2636 at this website.

"Neighborhood Stabilization Act" (H.R. 5818)

This act will provide funds to state and local governments for the purchase and rental of foreclosed homes.
The bill passed the House in May and is awaiting hearing in the Senate.
For more information, search for bill number H.R. 5818 at this website.

"Saving Family Homes Act of 2008" (H.R. 6116)

This act will "allow homeowners of moderate-value homes who are subject to mortgage foreclosure proceedings to remain in their homes as renters."
The bill was introduced in May and is awaiting hearing in the House.
For more information, search for bill number H.R. 6116 at this website.

"Federal Housing Finance Regulatory Reform Act of 2008" (See H.R. 1427)

This significant bill passed the House as the Federal Housing Finance Reform Act and is waiting to be revised and introduced in the Senate.
It will offer foreclosure assistance to homeowners through the Federal Housing Administration, reform Freddie Mac and Fannie Mae regulation, and create a housing trust fund with Freddie Mac/Fannie Mae money.
However, money could be taken from the trust fund to insure non-governmental mortgage lenders. To read more about this controversy, click here.
To read about H.R. 1427, the House version of the bill, search for bill number H.R. 1427 at this website. Stay tuned for future updates and action items!

Local events - Foreclosure Prevention

Detroit Town Hall Meeting with City Council President - tonight, 6pm-8pm

Join Detroit City Council President Ken Cockrel at a town-hall meeting, "Keep Your Home: Avoiding and Fighting Foreclosure," tonight (June 19) from 6pm to 8pm (with a light dinner served from 5pm to 6pm) at Our Lady of Good Counsel (17142 Rowe, Detroit, 48205) to learn more about home foreclosures in Detroit. To RSVP, please call (313) 224-4505.

The event will include a panel discussion featuring Wayne County Treasurer Raymond Wojtowicz, President of the Detroit Alliance for Fair Banking Debra Jones, and Michigan Legal Services' Marilyn Mullane.

Saginaw "Family Funfest" to raise funds for foreclosure prevention counseling - tomorrow, June 20, from 4pm to 9pm

Tomorrow night, Circle of Love CDC is hosting "Saving the Dream: One Community at a Time" Family Funfest at Bliss Park in Saginaw (on Michigan Avenue, by Covenant Hospital) from 4pm to 9pm. This event will include horse rides, food and merchant vendors, games, prizes, euchere/spade tournaments, and a concert starting at 5:30 including gospel, jazz and R&B.

This event is sponsored by Chemical Bank, Fifth Third Bank, and Citizens Bank, and will benefit Circle of Love's Counseling programs. For more information, call (989) 921-0569.

CEDAM
1000 S. Washington, Suite 101

Lansing, MI 48910

(517) 485-3588

fax (517) 485-3043
staff@cedam.info

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