LANSING – State Representative Robert Dean (D-Grand Rapids) today voted for an aggressive, bipartisan initiative to help more working families keep up with mortgages and avoid losing their homes. The plan – which is part of the Democrats' comprehensive approach to boost the state's economy and create jobs today for our residents – now heads to the Governor's desk to be signed into law.
"During these difficult economic times, we must support Michigan's working families and help them keep their homes as they struggle to make ends meet," Dean said. "By fighting the foreclosure crisis that has swept our state, we will strengthen our communities, attract the good-paying jobs that residents of Grand Rapids need, and get our working families back on their feet."
The plan will fight the epidemic of foreclosures 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 initiative empowers the Michigan State Housing Development Authority (MSHDA) to refinance mortgages; currently, MSHDA can only make mortgages, not refinance them.
MSHDA provides loans financed through the sale of tax-exempt and taxable bonds and notes to private investors – not from state tax revenues.
Under the plan, borrowers who meet income and credit score requirements could avoid dramatic increases in their housing expenses by securing a fixed-rated loan. It would allow homeowners who have missed payments on their adjustable-rate mortgages, and who are unable to work out an agreement with their lender to avoid a foreclosure, to apply for a fixed-rated loan.
"Many people tend to think that foreclosures only happen to low-income families, but that is simply not the case," Dean said. "Families of all income levels have lost their homes to foreclosure, and entire neighborhoods suffer whenever a family is forced out of their home. This plan will keep our communities strong by helping our hard-working residents stay in their homes."