LANSING – With home foreclosures continuing to skyrocket into Depression-era levels, State Representative Jon Switalski (D-Warren) on Wednesday introduced his first bill as a member of the Michigan House of Representatives. Switalski's plan is part of the Michigan Home Loan Protection Act, a comprehensive legislative package that cracks down on predatory mortgage lending practices and strengthens consumer protections in the face of the collapsing subprime mortgage market.
"It is imperative that we create protections like these to combat the deceptive and deceitful practices of predatory lenders," Switalski said. "Predatory lenders and fraudulent home loans are jeopardizing entire communities and impeding Michigan's economic recovery. This plan will hold lenders accountable and help keep more Michigan residents in their homes."
The Michigan Home Loan Protection Act will ban predatory lending practices and protect consumers from being steered toward high-cost loans when they would otherwise qualify for a traditional loan. The plan also will protect homeowners' equity by prohibiting home refinancing to generate fees for the lender and require vulnerable borrowers to receive independent counseling from a certified third-party, non-profit counselor. In addition, the plan will give injured and aggrieved homeowners legal recourse so they can independently enforce these consumer protections against unscrupulous lenders.
According to the latest figures from RealtyTrac, an Irvine, Calif.-based online foreclosure firm, Michigan continues to rank fifth in the nation in foreclosures, with 14,594 foreclosure filings in November 2008. That rate is a 28 percent increase from the previous month and a 27 percent increase from November 2007. Macomb County alone had more than 14,000 foreclosure filings in 2008.
"Michigan continues to have one of the highest foreclosure rates in the country and something must be done about it," Switalski said. "It's time Michigan joins the two dozen other states that have adopted these basic consumer protections to ensure that homeowners are not taken advantage of by unscrupulous lenders."