LANSING – State Representative Gabe Leland (D-Detroit) on Tuesday joined his fellow House Democrats in passing an aggressive plan to fight the foreclosure epidemic 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. The plan, which will help more Michigan residents keep their homes, is part of a comprehensive approach to help jumpstart the state's economy.
"Detroit, which is suffering from one of the highest foreclosure rates in the country, desperately needs a plan like this that helps homeowners put the brakes on the foreclosure process and keep their homes," Leland said. "People should not have to go through the devastating experience of losing their homes because lenders took advantage of them or they have fallen on hard times, yet that is what thousands of Detroiters are facing right now. Our plan protects these working families and gives them the support they deserve."
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.
Foreclosure filings in Wayne County for October totaled 6,399 filings, a rate of one foreclosure filing for every 131 households — 2.6 times the state average and 4.2 times the national average, according to the latest figures from RealtyTrac, an Irvine, Calif.-based online foreclosure firm.
"Fighting foreclosures is not just about protecting individual homeowners, although that is important," Leland said. "Vacant buildings add to the challenges that we face in strengthening our city. We have to get foreclosures under control in Detroit so that we can keep property values from plummeting, keep our neighborhoods safe for kids and seniors, and make Detroit an attractive place for families and businesses to locate."