Let’s Put a Freeze on Foreclosures

The latest housing figures for Michigan were recently released, and unfortunately the news isn’t good. Foreclosure rates are up approximately 25% over this time last year, which means our state’s housing crisis will only get worse if we don’t take drastic steps soon to help residents keep their homes.

Our best efforts to re-energize the state’s economy and stimulate job growth will be fruitless unless we can offer relief now to struggling families.

Since the year began, the Senate has passed several bills I sponsored that will regulate loan officers and bring accountability to the mortgage industry, and offer consumers new loan products through the Michigan State Housing Development Authority (MSHDA) to transition into affordable fixed-rate mortgages. My hope is that these new laws will help consumers keep their homes, and protect prospective homebuyers from unscrupulous lenders and future financial hardships.

However, there is still more we can do to keep the American dream of homeownership alive for Michigan families. That is why I am supporting the new two-year foreclosure moratorium proposal that was introduced this week by my colleague, Sen. Hansen Clarke (D-Detroit). The three-bill package would establish the longest period of foreclosure protection of any state in the country, while also providing important safeguards for the lending industry.

The first bill in the package allows a property owner to ask the court for a two-year stay on all mortgage foreclosure proceedings until the period of redemption. During this two-year period, the court may take into account the property owner’s financial status and ability to pay in determining the new payment amount. Another bill in the package would allow a property owner to ask the court for a two-year stay on foreclosure proceedings based on failure to pay property taxes.

The goal of this legislation is to give homeowners a chance to get back on their feet and back in the routine of making regular payments, which will ultimately help them avoid foreclosure.

The final bill in the package will allow MSHDA to issue bonds which can be used to guarantee residential mortgage payments during the foreclosure moratorium period. This would create an added layer of protection for lenders while they work with consumers to refinance mortgages.

Michigan homeowners can’t afford to wait another day for financial relief. By freezing foreclosures for two years, we can stabilize the housing market and continue the important work of transforming our economy.