Michigan Foreclosure Task Force: Policy and Advocacy
Policy
The Michigan Foreclosure Task Force is focused on enacting strong consumer protection and foreclosure mitigation policies in Michigan:
Enact basic consumer protections against predatory lending.
Over two dozen states have now enacted basic consumer protections against the most abusive and usurious lending practices that sparked much of the current foreclosure crisis. Laws are needed that:
- Ban predatory lending practices, such as making loans without requiring borrowers to prove their ability to repay the loan, encouraging borrowers to default, charging excessive late fees and charging fees for a payoff statement.
- Protect homeowners' equity by prohibiting home refinancing to generate fees for the lender unless there is a tangible net benefit to the borrower.
- Protect consumers from being steered toward high-cost loans when they would otherwise qualify for a traditional loan.
- Prohibit the financing of any points and fees that hide the true costs of the loan.
- Prohibit prepayment penalties.
- Give injured and aggrieved homeowners legal recourse so they can independently enforce these consumer protections against unscrupulous lenders.
Successfully implement the state's new 90-day pre-foreclousre negotiation law.
The recent enactment of Public Acts 29 – 31 of 2009 (House Bills 4453-55) makes Michigan one of the national leaders in leveraging the skill and effectiveness of nonprofit housing counselors by insuring that all lenders and servicers provide distressed borrowers notice of their local nonprofit housing counselor at least 90 days before a foreclosure notice can be filed.
Lenders and servicers who reject loan modification offers of borrowers who qualify for such modifications will be forced into judicial foreclosure, a more cumbersome and time-consuming process.
Ensure adequate protections for renters caught in the foreclosure crisis.
Under the Protecting Tenants at Foreclosure Act of 2009, once a foreclosed property has changed ownership, tenants must receive a minimum 90-day notice prior to eviction.
For those tenants with a bona fide lease, the new law allows them to remain on the property for the remainder of their lease, unless the new owner plans to occupy the property. In this case, tenants must be given at least 90 days notice to vacate the property.
Provide protections against foreclosure rescue scams.
A new breed of scam artists has been bred by the foreclosure crisis, preying upon vulnerable families who are in danger of losing their home to foreclosure. Utilizing foreclosure notice filings, the scam involves approaching homeowners facing foreclosure and offering to help provide counseling and negotiation services to save their home, only to abscond with the hundreds or thousands of dollars charged up front.
Legislative protections and aggressive prosecutions are needed to end these scams.
Advocacy
To date, the following organizations have signed on to the Task Force’s policy agenda:
Association of Community Organizations for Reform Now (ACORN) – Detroit, Lansing
Center for Nonprofit Housing - Fremont
City of Lansing Planning & Neighborhood Development Department – Lansing
Community Action Agency of Jackson – Jackson, Hillsdale and Lenawee Counties
Lighthouse Community Development – Pontiac
Michigan Coalition Against Homelessness – Lansing
Michigan LISC – Kalamazoo
Moratorium NOW – Detroit
Metropolitan Organizing Strategy Enabling Strength (MOSES) – Metro Detroit
Neighborhood Renewal Services – Saginaw
Newaygo County Community Services – Newaygo County
Northwest Michigan Community Action Agency – Northwest Lower Michigan
Northwest Michigan Human Services Agency – Northwest Michigan
Oakland Livingston Human Services Agency – Oakland and Livingston Counties
Progress Michigan – Lansing
Project L.I.V.E. – Detroit
Wayne-Metro Community Action Agency – Wayne County