The law gives a 90-day foreclosure moratorium to troubled homeowners who want to negotiate with their lenders to modify their loans to make payments affordable.

In Granholm’s weekly radio address, she explained that the bipartisan legislative agreement would provide relief to homeowners who are facing foreclosures. She commended the efforts of Michigan Representative Andy Couloris who helped create the agreement. She reiterated her government’s commitment to protect Michigan families from foreclosure and help them remain in their homes.

During the 90-day foreclosure moratorium, qualified homeowners would be allowed to seek help in modifying their mortgage loans from housing counselors available through the Michigan State Housing Development Authority. Homeowners would then be required to discuss with their lenders possible loan modification plans.

If homeowners and their lenders come to an agreement on a loan modification plan, repossession is avoided provided that homeowners abide by the bipartisan legislative agreement.

Granholm pointed out that avoiding foreclosures would benefit not only Michigan families, especially those who are in danger of losing their properties, but also neighborhoods.

Distressed foreclosure properties cause neighborhoods to deteriorate and home prices to decline, affecting the whole community and the state’s economy, she added.

The law requires lenders to notify in writing troubled homeowners about their mortgage default and to provide them with contact information.

Granholm explained that it is important that lenders, homeowners and housing counselors coordinate to stop foreclosure. She said that less than 20 percent of delinquent homeowners communicate with their lenders or housing counselors as soon as they start missing payments. She claimed that the law creates a procedure in which lenders and homeowners communicate and negotiate.

Under the law, a lender would develop a loan workout scheme in which the borrower’s monthly mortgage payments would not be more than 38 percent of his income. A loan modification plan may include reducing interest rates or extending the loan term.

Michigan’s foreclosed homes foreclosure filings reached a total of 33,184 in the first quarter of this year, representing a 2 percent decline from the last quarter of 2008 and 12 percent increase from the first quarter of the previous year.

Michigan Law to Prevent Foreclosed Homes Foreclosure is a post from: Foreclosure Homes Investing

Michigan, particularly Detroit city, is one of the areas hardest hit by the economic crisis. Foreclosures and the failing automobile industry have weakened the city’s economy. The city has the highest number of homes in foreclosure listings in the U.S.

Since 2000, about 150,000 people in Detroit have lost their jobs to downsizings in the automobile industry. Aside from this, Michigan has the highest share of subprime mortgage loans in the country and the highest number of jobless people.

Meanwhile, the increasing number of homes in foreclosure listings in Detroit has pulled the average sale price of properties to $7,750. Added to this is the rise in automobile theft, vehicle burglaries and insurance fraud which resulted to the increase in the cost of the average automobile insurance policy to almost $5,072.

The morale of people in the city has been severely affected by foreclosures and unemployment that only about 14 percent of residents turned up to vote in the mayoral election last February and more than half of the total number of high school students dropped out.

What could Detroit do to improve its deteriorating economy and boost the sagging morale of people? One suggestion is to buy homes in foreclosure listings and convert them into green spaces.

It is suggested that Detroit could turn homes in foreclosure listings into nature parks and preserves. By pursuing green urban renewal programs, the city could lessen the environmental damage caused by the automobile industry and at the same time, improve the health and mental state of its citizens.

Studies showed that green spaces made inner city children healthy and happy. The health benefits of greenness on children and youth include lessening symptoms of attention deficit hyperactivity disorder and improving cognitive functioning.

Results also indicated health benefits of greenness on adults, such as reducing stress, lowering body mass index, shorter period of post-operative recovery and improving self-reported health.

Experts believed that converting repossessed properties into urban gardens, parks and wildlife sanctuaries may go a long way in revitalizing the city.

The Greening of Homes in Michigan’s Foreclosure Listings is a post from: Foreclosure Homes Investing