LANSING – State Representative Mary Valentine (D-Norton Shores) today voted to create the Home Foreclosure Prevention Act, which requires lenders to make homeowners aware of programs and resources available to them to help avoid foreclosure. The act is another piece of a comprehensive plan attacking the subprime mortgage crisis in Michigan.
"Ensuring that we have strong, vibrant communities in Michigan is a vital part of getting our state back on the right track," Valentine said. "Unfortunately, too many of our working families are struggling just to get by and are facing the threat of foreclosure. The Home Foreclosure Protection Act will ensure that they are aware of the tools available to them to protect their most valuable asset."
The Home Foreclosure Prevention Act requires the Office of Financial and Insurance Regulation (OFIR) to establish the Michigan Home Foreclosure Prevention Program, which will seek solutions to avoid foreclosures for certain subprime loans. The Act also requires lenders to send a written notice to borrowers at least 45 days before initiating a foreclosure. That notice must include options available to homeowners to help keep them in their homes.
Valentine and her colleagues previously passed the Michigan Home Loan Protection Act, which bans predatory lending practices such as making loans without requiring borrowers to prove their ability to repay them, and the "Save the Dream" package, which establishes programs to allow homeowners saddled with risky adjustable-rate mortgages and those who have missed mortgage payments to refinance and secure a fixed-rate loan.
Valentine and her colleagues' dedication to ending the foreclosure crisis in Michigan is already producing results – foreclosure filings in October were down 15 percent from a year ago. [1]
"Foreclosures don't just destroy families – they destroy entire neighborhoods," Valentine said. "Neighborhoods with a high rate of foreclosures often see property values drop while incidents of crime go up. This plan will help our working families stay in their homes in these difficult economic times."