Apr 2, 2009

Senate Republicans say yes to banks, no to homeowners

LANSING -- State Sen. Randy Richardville, R-Monroe, carried water for the home mortgage industry whose greed plunged the country into a financial meltdown by fighting off every attempt by Senate Democrats Wednesday to pass a meaningful moratorium on home foreclosure and keep people in their homes.

The Senate passed a package of three bills, House Bills 4453-4455, along party lines that would have given a 90-day reprieve from foreclosure for homeowners who commit to working with their lender and a housing counselor that was approved by the House with bipartisan support last month.

The bills passed by the House stipulated that if at the end of the 90 days a homeowner is eligible for a loan modification, but the lender does not give it to them for whatever reason, then the lender would be forced to take the foreclosure through the judicial process.

But Richardville, the chair of the Senate Banking and Financial Institutions Committee, stripped that out of the bill in committee, and he fought off numerous attempts by Senate Democrats to put the provision back in the bill on the Senate floor.

Sen. Hansen Clark, D-Detroit, a long-time advocate of foreclosure protection for consumers, gave an impassioned plea to include the judicial hammer in the bill. Michigan ranks seventh in the nation for foreclosures, according to RealtyTrac. More than 145,000 properties were in foreclosure in 2008 – a 21 percent increase from 2007 and a 108 percent increase from 2006. In January of this year alone, 11,418 foreclosures were reported in Michigan.

“Our failure to have the courage to resist special-interest lobbying and for a change look out for the interest of the individual, not the large corporations who are benefiting right now from loans totaling billions of dollars of our kids and grandkids--tax dollars,” he said. “My amendment would require a judge to get involved with the foreclosure process. It would bring the borrower and the lender together so that they can voluntarily work something out.”

Richardville used the lame excuse that it ads an extra step for mortgage companies and cost them a few more dollars. The same mortgage companies whose greed caused the sub-prime mortgage mess that plunged the country into a recession. The national recession has severely hurt the auto industry, Michigan’s largest employer, and many Michigan residents have lost their jobs. Still, many banks refuse to work with homeowners who have fallen behind, and there is nothing the homeowner can do about it.

“The question is this: How many more people have to lose their retirement savings before we take action,” Clark said. “How many more homeowners must lose the value of their houses before we take action? How many more families need to end up in homeless shelters before we take some reasonable action to give those responsible homeowners who can afford to stay in their home a few more months to catch up on their mortgage payments?”

Consumer groups like the Michigan Advocacy Project and the Michigan Foreclosure Taskforce said stripping the judicial piece out of the bill will cost more people their homes.

Many Democrats crossed over and voted for the bills. Because they are substitutes, they have to go back to the House for concurrence, and more than likely they will end up in a conference committee where the bills will be fixed.


Not Anonymous said...

According to you, Senator Clark said: "How many more families need to end up in homeless shelters before we take some reasonable action to give those responsible homeowners who can afford to stay in their home a few more months to catch up on their mortgage payments?”

My response:

If they are responsible homeowners and can afford to stay in their homes why are they behind in their mortgages and unable to catch up?

It seems to me that if they are in default on their mortgages, they are not responsible homeowners whether of their own doing or because of circumstances brought about by the worst economic state in the country.

Communications guru said...

My response:
We are in a national recession, and people are losing there jobs, seeing hours cut and their wages cut.

The circumstances were brought on by the greed of the financial industry in their quest to turn over loans with zero responsibility and zero due diligence.

ka_Dargo_Hussein said...

Being responsible and being behind in your mortgage are not mutually exclusive.

kevins said...

Hard to believe, but I'm in agreement with Dargo. And that will really blow my mind if Dargo and guru turn out to be the same person.

There are many people who are in mortgage crisis for reasons beyond their control. They worked hard, bought a house they could afford and despite doing fine work, found their source of income disappears as a company goes under or eliminates an entire department.

Good, talented laid off people can't find comparable work...or any work...in a state with 12.5 percent unemployment.

My home value has dropped dramatically but it's no big deal since I can still afford my house payment and I have no plans to sell. That would be true even if I lost my job. But I realize I'm fortunate.

Not everyone can be in a position where they can lose their job and still handle payments for home, children and the rest.

Unless you say it is strictly a dog-eat-dog world, it is a moral obligation for companies and governments to protect the great majority. Many companies have failed that obligation. Meanwhile, how many governments do you know that have actually decreased spending or reduced taxes? They don't exist. Michigan actually increased two main taxes last year and Howell is ready to up its tax rate this year. The people making those decisions are incompetent.