Foreclosure Resolution Blog

At a time when Michigan’s residents are dealing with rising costs, higher taxes and unemployment, many are looking to our state government for answers.

Homeowners trying to avoid foreclosure could use some genuine help from the folks in Lansing, so do we get a sensible response?

No. Instead, we get this.

I don’t know what to make of this. There’s no way for me to know if this is just a way for these legislators to say, “Hey- I tried to do something. I just couldn’t get any cooperation.” Or maybe it’s their way of saying, “I have no idea how to stop the foreclosure crisis in Michigan.”

The cynical part of me says that they know full well that this will never get anywhere, and they know that most homeowners who would be “helped” by a bill like this would probably not be able to keep their homes.

I was told by a state congressional staffer that this would likely die in committee, but this is really aggravating.

A moratorium which allows homeowners to pay a reduced amount each month to avoid foreclosure would only compound the problems, in many cases making it even less likely that they could obtain a workout. It’s already possible to get good workout terms and avoid foreclosure if you know what you’re doing. You can get great results right now, in today’s environment, without government intervention.

In Michigan, we ALREADY pay a higher interest rate on our home mortgages than other states due to our state’s foreclosure time period.

Surely, we would pay even higher rates if this foreclosure moratorium is passed.

The state could offer some real help if they’d allocate some money to help people avoid foreclosure. U.S. Senators Schumer and Dodd did get one thing right when they stated how much it would cost to save the average homeowner from foreclosure. And it’s not that much money.

Unfortunately, the only people who currently qualify for state funds are the working poor- those who are most at risk to repeat their foreclosure.

This has been a constant frustration. I’ve spoken with a number of homeowners who are skilled, and have taken the lack of responsiveness as their cue to hit the road and leave the state. Most who look for assistance do not qualify. Either they “can’t afford their house,” or they “make too much money.”

So, based on our current policies, we’ll help the unskilled among us, but not hard-working, middle class folks.

The approach of using a forced moratorium does very little- it addresses the symptoms, but not the underlying cure.

The reality is this: the state could do LOTS of things to help prevent foreclosure.

They could offer aid to borrowers who are unlikely to default again.

They could create a micro-loan program to help homeowners to avoid foreclosure.

They could have done something PRODUCTIVE with the MSHDA program, rather than just create a redundant program that does nothing more than FHA Secure.

But these are small solutions. The real solution to the foreclosure problem in Michigan is to fix the economy.

They could balance the budget.

They could reduce spending.

They could cut taxes.

They could fix or altogether ELIMINATE the SBT. 

They could create an environment where businesesses actually WANT to come here.

The funny thing is, our state’s focus has been on improving education, and then our graduates leave for states where they can actually find good jobs. I suppose this approach might eventually work if you put these graduates on a leash.

The problem is, they’ve been “working” on these issues for quite some time.

Right now, our state is in steep, severe decline. Entrepreneurs don’t want to open businesses in a hostile environment, and new graduates don’t want to live and work in a state that leads the nation in foreclosure and unemployment.

If we want to take an honest assessment, take a look at how others view our state. Here’s a quote from the Wall Street Journal:

“We’ve been kicking Michigan on the editorial pages for its dysfunctional economic policies, high taxes, kowtowing to unions. It’s had the worst performance of any state in the country in terms of its economy. So it’s good news that this week the Detroit Red Wings won the NHL Stanley Cup playoffs…  And I guess what I’m saying is that it is so nice that Michigan is finally No. 1 in something other than job losses and mortgage foreclosures.”

You can’t open a newspaper in Michigan lately without stories of how residents are having a hard time making ends meet, about how many more homes are in foreclosure. Issues like the high price of gas and the rising cost of food would be less of an issue if good, high-paying jobs were prevalent in the state.

Foreclosure prevention begins with job creation. And I don’t want the government to “create“ those jobs.

All I want them to do is create an environment that isn’t HOSTILE to the businesses that would create those jobs.

Is that too much to ask?

So much is made of it when a company decides to expand or locate in Michigan. I look forward to the day when that’s not really news.

I don’t think attracting news businesses to Michigan should be a chore, nor do I think it helps in the long term to give businesses a bunch of tax breaks for “giving us a try.” But it’s awfully hard to sell something when you’re offering a lousy product.

When the climate is attractive, you don’t have to waste a lot of time convincing businesses to locate here.

Anyone in our State Legislature who’s standing in the way of solving these issues is directly responsible for making the foreclosure problem in Michigan worse.

It’s time for our state’s residents to FINALLY wake up and start paying attention to what their representatives are doing that’s truly PRODUCTIVE.

If our legislators truly want to help, then they need to do things that actually work. And no amount of hopeless, useless, proposed legislation is going to help homeowners to stop foreclosure and keep their homes.

A foreclosure moratorium bill will not cure what ails us.

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This entry was posted on Wednesday, June 11th, 2008 at 1:14 pm and is filed under foreclosure legislation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.