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12-4-07 MORTGAGE RESCUE PLAN CLEARS HOUSE Homeowners facing financial trouble with subprime mortgages, burdensome interest under adjustable rate mortgages or who fell behind in payments after losing their jobs would get help under a package of bills that cleared the House on Tuesday. The bills authorize the Michigan State Housing Development Authority to refinance loans at lower rates, something backers say is critically important to the homeowners and to the economy of Michigan, which has the nation’s fourth highest foreclosure rate. “This is a huge problem,” said Rep. Steve Tobocman (D-Detroit), sponsor of one of the bills. “This helps people in distress now. This puts Michigan at the forefront of dealing with this problem.” Governor Jennifer Granholm welcomed the House action and urged the Senate to follow suit. “We have developed a great program and some great mortgage tools to help protect hard-working homeowners who are facing mortgage foreclosures,” she said. The bills all passed with bipartisan support, though one bill in the “Save the Dream” package authorizing the new MSHDA refinancing options (HB 5444) had 34 opposition votes from Republicans. A Republican proposal to bar refinancing to illegal immigrants was withdrawn. The refinancing provisions to more affordable fixed-rate loans from ARMs is a change from the traditional role of MSHDA, working with private financial institutions to offer initial financing for first-time homeowners. Refinancing also would be available to those who miss at least three mortgage payments in a year. It applies to single-family residential property and owner-occupied housing with up to four units, with the owners having to meet credit and asset testing. The central bill in the package (HB 5443, passed 104-1) authorizes MSHDA to use its tax-exempt bonds for refinancing purposes. MSHDA bonding limits would not be changed, and the maximum that can be refinanced is $216,000. Other bills in the package would establish a Recapture Tax Fund that could be used to reimburse borrowers for any taxes paid (HB 5445, passed 88-17); extend the $4.2 billion limit on MSHDA bonds to November 1, 2011 that otherwise would have decreased to $3 billion after November 1 (HB 5446, passed 95-10); and establish a public policy determination that refinancing assistance is needed (HB 5447, passed, 100-4).