December 13, 2007, Introduced by Reps. Johnson, Young and Miller and referred to the Committee on Banking and Financial Services.
A bill to provide assistance to owners of distressed housing;
to provide a vehicle for purchase and redemption of residential
property faced with foreclosure; to provide for the raising of
capital and the issuance of bonds; and to provide for certain
duties of certain state agencies.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"neighborhood equity protection and foreclosure prevention act".
Sec. 2. The community stabilization authority is created in
the department of labor and economic growth.
Sec. 3. The authority shall determine geographic areas in this
state where property values and other factors, including, but not
limited to, a high rate of foreclosures on residential housing,
demonstrate the need for community stabilization. The authority
shall define the areas served so that participating eligible
financial associations qualify for credit under the community
reinvestment act of 1977, 12 USC 2901 to 2905.
Sec. 4. The authority shall develop a program to accept
proposals to reduce the high foreclosure rate in geographic areas
that demonstrate a need for housing stock price and market
stabilization. The authority may do any of the following:
(a) Do whatever is necessary to become an entity capable of
acquiring and holding title to property.
(b) Raise capital necessary to facilitate operations.
(c) Coordinate and work with financial and investment
businesses and organizations to acquire troubled properties in
geographic areas that demonstrate a need for stabilization.
(d) Evaluate proposals to acquire properties after any
necessary clear title actions have been brought and after
renovations required by the authority have been completed.
(e) Offer acquired and renovated properties for sale through
(f) Provide proceeds for renovation and develop working
relationships with the businesses that provide renovation services.
(g) Develop and distribute a list of approved contractors that
will provide renovations to properties.
(h) Borrow money and issue bonds or notes for refunding all or
part of existing bonded or note indebtedness.
(i) Make loans to owners of property who are otherwise facing
foreclosure and provide information to those property owners on how
to avoid foreclosure.
Sec. 5. Before the authority acquires property, it shall
initiate a clear title action in a court of competent jurisdiction.
Sec. 6. The authority shall conduct sales of all renovated
property that it has acquired. The authority shall not dispose of
property for less than full appraised market value. The authority
shall secure itself through land contract. If the purchaser
acquires financing to purchase the property, the authority shall
take a second position to the purchaser's lender.
Sec. 7. The authority shall forgive up to 75% of the debt owed
to it by the purchaser over a period of no less than 5 years, if
the property is retained by parties that occupy it and hold title
subject to mortgages or other instruments of finance.
Sec. 8. Owners of property who are facing foreclosure in
geographic areas that demonstrate a need for housing stock price
and market stabilization shall be eligible for low-interest loans
and other assistance as determined by the authority. The authority
may also award grants of no more than $3,000.00 per property in
certain cases. The authority shall develop eligibility criteria for
the loans and grants and shall distribute the criteria to
interested parties and make the availability of the loans and
grants known across this state.