Anti-foreclosure activists target Michigan proposal
At least one group is speaking out against a proposed Michigan bill that would shorten the redemption period for certain mortgages after a foreclosure sale. Neeta Delaney, co-director of the Michigan Foreclosure Task Force, said Michigan House Bill 5176 "arbitrarily" singles out portfolio mortgages for a change in the buyback period to 90 days from the typical 6-month period. Delaney and group co-director Steve Tobocman, among others, testified in a hearing Wednesday before the House Banking and Financial Services Committee. "It's unfair to homeowners because they don't know if they have a portfolio loan or not," Delaney said Friday. Portfolio loans are mortgages that have not been securitized or assigned a different mortgage servicer by the original lender. The Michigan Foreclosure Task Force was formed by the Community Economic Development Association of Michigan in 2007, and its member groups include housing and counseling agencies, local and community-based not-for-profits and the Michigan Association of Realtors. Delaney said the task force resembles a consumer advocacy group. Under current law, loans on residential property not exceeding four units, but with more than two-thirds of the original mortgage left, have a six-month buyback period. If abandoned, those same properties have a 30-day window. For mortgages with less than two-thirds still remaining, the redemption period is one year, or three months if abandoned. But Delaney said it's rare to see loans under the two-thirds mark go into foreclosure anyway. Delaney said the new bill would also be an "administrative nightmare" for bigger banks that have both portfolio and non-portfolio loans. The Michigan Credit Union League has voiced its support for the bill, saying that the current process is protracted and drives down property values. The Michigan Bankers Association holds a neutral stance on the bill. HB 5176 left committee-level proceedings Thursday, making it likely that it will come before the House sometime next week. Write to Andrew Scoggin. Follow him on Twitter @ascoggin.