Traverse City Record-Eagle

June 4, 2013

Editorial: Bills would doom redemption efforts

Traverse City Record-Eagle

---- — Why in the world would the Michigan Legislature make it harder for someone whose home is in foreclosure to sell or take other steps to save their property?

And mostly to help out banks, no less.

But that’s just what a package of bills sponsored by Sen. Darwin Booher would do. Booher is an Evart Republican whose 35th State Senate district includes Leelanau, Benzie, Manistee, Wexford and Kalkaska counties.

Some of what Booher is proposing makes sense. Michigan’s current pre-foreclosure process law, which gives residents 90 days before a foreclosure to work with counselors to pursue a loan modification or other remedies, ends this month. Booher’s bill would extend that law until January, when federal regulations will mandate that lenders wait 120 days before making a first notice or filing.

That makes sense. Anything that helps homeowners save their homes from foreclosure is good for state residents and their communities.

But the price is much too high. Instead of giving homeowners six months after foreclosure proceedings have begun to sell or challenge the foreclosure, Booher’s legislation would reduce that period to a measly 60 days.

As real estate agents opposed to the bill point out, that’s not nearly enough time for someone to sell their home. The Michigan Foreclosure Task Force says the six-month redemption window allows homeowners time to begin making payments again or sell their home on a short sale. A 60-day window is impossible.Michigan banks, which back the bills, say the longer redemption period leads to abandoned homes and blight, and new federal regulations will help people avoid foreclosure. So this will change all that? Hardly.

Michigan’s foreclosure laws are already skewed. Unlike many states where lenders have to go through the courts to foreclose, the process in Michigan begins when a lender simply puts a foreclosure notice in the newspaper.

There are no checks and balances in that system and it is open to human error and fraud, which was a big part of the housing meltdown in the first place.

This is a solution without a problem — except for Michigan banks, perhaps. Although banks say the six-month redemption period promotes blight, are we to believe that giving someone just 60 days after a foreclosure notice is published to take needed steps to save their home will reduce blight and make neighborhoods stronger? Not likely.

Booher spent 40 years in the banking industry with Citizens Bank and Bank One; these bills look like he’s still on the job.