LANSING – State Representative Mike Simpson (D-Jackson) 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.
"Losing a home can be devastating for a family," said Simpson. "Michigan has been hit hard by the foreclosure crisis, and we need to take additional steps to help our working families keep their piece of the American Dream. The Home Foreclosure Prevention Act will ensure that residents are aware of every option available to them when they are facing the threat of foreclosure."
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.
Simpson and his colleagues previously have 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.
Simpson and his 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]
"Our working families need to know that it's never too late to fight foreclosure," Simpson said.