LANSING-Today Senate Democrats offered protections for people from foreclosure and Senate Republicans opposed every one of them.

“Today Senate Republicans voted against giving people a chance to stay in their homes,” said Senate Democratic Floor Leader Buzz Thomas (D-Detroit). “They chose protections for banks over protections for homeowners time and time again.”

The Senate Republican substitutes for HB 4453-4455 ultimately strip the judicial foreclosure provision that requires a lender to work with a borrower who qualifies for a loan modification under the FDIC workout program. The amendments Senate Democrats introduced today would restore the original language in the House-passed version of this legislation that said that if lenders refuse to modify a loan for a qualifying borrower, then a foreclosure proceeding will be converted to a judicial proceeding.

“The legislation approved today is a much weaker solution than we need, but there is still an opportunity to get it right,” said Sen. Tupac A. Hunter (D-Detroit). “I will work to hold my Senate and House colleagues accountable for producing a final version that will better address the foreclosure crisis that is devastating our neighborhoods.”

Democrats also pushed for additional protections that would:

• Prevent lenders from suing borrowers for the difference between the foreclosure sale amount and the amount owed on the mortgage

• Require lenders to pay 1% of what they make on a foreclosure sale to a legal aid fund for foreclosure victims

• Require a lender to produce proof of ownership of the loan in question before proceeding with a foreclosure

• Impose a 1% fee on foreclosure sales to go to the Michigan State Housing Development Authority to provide housing counseling, and extending out the redemption period for two years for homes that qualify

These efforts were defeated by the Republican-controlled Senate.

“These bills if enacted might make the situation worse for families facing foreclosures,” said Sen. Hansen Clarke (D-Detroit). “These bills could give the lender legal reasons to start the foreclosure process earlier than they do because the time tables and loopholes in the bill would make it difficult for homeowners to comply with the requirements.”

“Not all lenders are willing to negotiate with borrowers to keep them in their homes, even if the mortgage could be saved,” said Sen. Dennis Olshove (D-Warren). “Allowing a judge to intervene would help homeowners negotiate better terms on their mortgages and make sure they are being treated fairly by lenders.”

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