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.




     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


land contract.


     (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.