Foreclosures: Midwest Flexing Muscles To Tackle Foreclosures

October 15th, 2007 | Tags: Foreclosures

As the foreclosure clouds darken in some Midwest states, plans are being rolled out to stem the tide. Officials and communities are not willing to put up with the battering without a fight. At the forefront is Governor Jennifer Granholm of Michigan. A taxable bond-financed plan has been initiated to help house owners opt for refinance mortgages whose interest rates have suddenly risen. The help will be routed through the Housing Development Authority of the state. It will benefit house owners who meet certain income and equity prerequisites. By refinancing they will be able to avail of lower interest. If the plan gets legislative approval then others facing foreclosures will also benefit.

In Michigan foreclosures rose to 14,242 as compared to 7,846 in the same month of September 2006. In a list of 50 states put forth by a reliable online tracking group, Michigan ranked 4^th. In Detroit foreclosures however fell by 23% last month in comparison to what it was in August. It ranked 5^th with a ratio of 1:113.

Ohio has already launched similar schemes to meet the foreclosure challenge but there are innumerable fund related problems en route. The Governor of Ohio asked the sub-prime mortgage lenders to sign a compact, which would be morally, but not legally binding. The target would be offering help to the foreclosure victims. The lenders would be proactive with the borrowers and give them information about loan modifications, changes in interest rates and try their level best to work out the loan in a manner beneficial to both sides. The foreclosure notice is to be given well ahead. The lenders are also expected to submit on a regular basis reports about number of sub-prime loans, loan negotiations and actual foreclosures. The response is supposed to be finalized on Monday. Ohio ranked third in the country during September with 15,709 foreclosures. It was down from August but nevertheless 131% higher than what it was during the same time in 2006. Other similar schemes were set afoot in Maryland, Massachusetts and New York.

The mayor of Chicago is looking into the matter of Wall Street investors and rating groups. Chicago too has been witnessing unprecedented rise in foreclosures. Here to pressure is being put on lenders to reach out to lenders and work out amicable solutions involving loan information, counseling and free legal aid.

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