Foreclosure Settlement Funds Legislation Now Public Law (Misc News: August 7, 2012)
Gov. Rick Snyder signed House Bill 5015 into law last week (now Public Act 296) to provide a spending plan for Michigan’s portion of the $25 billion payday received when 48 state attorneys general settled with five national mortgage companies. The spending plan provides for the distribution of the funds to victims of wrongful foreclosure, blight elimination and legal assistance to those facing foreclosure.
Though Michigan’s share was roughly $800 million split between four different categories, slightly less than $100 million ($97.2 million) was up for appropriation by the state Legislature.
Also signed into law was Senate Bill 1160 (now Public Act 295) to set up the Homeowner Protection Fund to be administered by the Department of Treasury in consultation with the Department of Attorney General. This bill would serve as the fund that would receive the settlement funds and would be the implementation bill for House Bill 5015.
During a workgroup with other financial industry and consumer advocacy representatives, the MCUL & Affiliates strongly encouraged lawmakers to focus the available funds on prevention and refinance assistance programs. Contained within the final distribution were many MCUL & Affiliates supported recommendations, which included the following highlights:
- Foreclosure Counseling and legal aid for homeowners - $15 million
- Home affordable refinance program (HARP) grants - $5 million
- Assistance to homebuyers - $15 million
- Blight elimination - $25 million
- Michigan State University extension foreclosure counseling - $5 million
- Michigan housing and community development programs - $3,709,500
For more details click here to obtain the Foreclosure Settlement Fund Issue Brief.