Senate Republicans have decided to address the bank and government foreclosures prevention problem by balancing the needs and interest of mortgage lenders and distressed homeowners.



Senate Democratic Floor Leader Buzz Thomas said that Senate Republicans chose not to give homeowners a chance to remain in their distressed properties. He added that Republicans decided to give protection to banks rather than save homeowners from bank and government foreclosures.

The Senate bank and government foreclosure prevention bill was substituted for the one approved by the House dominated by Democrats.

The House version of the bill requires mortgage lenders and distressed homeowners to negotiate for a loan modification. If negotiations for loan modifications have failed despite homeowners successfully meeting the criteria set by the U.S. Federal Deposit Insurance Corp., the foreclosure proceedings would be done on court hearings and not through advertisements.

Lawmakers are being aggressive in finding ways to prevent the spread of bank and government foreclosures. Michigan foreclosures rates are once again on the rise, reaching double digits.

According to RealtyTrac, a foreclosures monitoring firm, the number of foreclosure properties in Michigan increased by 10 percent from the first month of 2009 to February. Moreover, foreclosures affected one in every 360 homeowners in Michigan in February.

Meanwhile, the Republican-sponsored bill to prevent bank and government foreclosures has taken out the clause on judicial foreclosure.

Democrats have attempted and failed several times to amend the foreclosure prevention bill in the state.

On his part, Missouri Senator Hansen Clarke proposed an amendment to establish a foreclosure moratorium of up to 24 months. Clarke's proposed amendment would have required a review of the foreclosure moratorium and a judge's ruling and approval.

The amendment was defeated by a vote of 16-21. The defeat of the bill led Clarke to apologize in his speech of his failure to convince legislators that foreclosure would become a crisis.

The Democrats proposed to require lenders to donate at least 1 percent of the proceeds from foreclosure sale to legal aid funds for victims of foreclosure and to stop lenders from filing lawsuit against borrowers due to the difference between amounts owed on mortgage and the foreclosure sale.