Mortgage Mentor Blog : Mortgage News and Trends

Michigan Bites The Bullet

June 27th, 2008 @ 5:19 PM by Alden Smith

Current legislation in Michigan at his time could make it very hard for both consumers and lending institutions if they pass the legislature. Michigan has been hard hit by the mortgage market fiasco, and the state of the economy is such that even graduating college kids run for the border as soon as they have diploma in hand.

New legislation is tough on everyone involved because it wishes to do away with subprime lending altogether, leaving a lot of struggling families out of luck. Consumer advocates are unwilling to make any compromise on what they wish done - do away with sub prime or else.

With The Big Three in a lot of trouble due to the high cost of gasoline, and jobs being lost and plants closing on a regular basis, doing away with subprime altogether makes little sense. Michigan has been on a downslide for years, and its future looks rather dim, indeed.

Better, I think, for Michigan to do away with the ARM components, crack down on unethical lenders, and clean up some of the already huge damage created by the fallout. Doing away with subprime shuts out a lot of people that ordinarily would be able to make payment on a lesser mortgage, thus increasing the state of the economy and putting money into the community where they live.

One of the caveats of this new legislation is that certain banks and credit unions would be exempt from current legislation. That shuts out a lot of mortgage companies that would otherwise be able to help Mr. Average Joe in his search for the American Dream. It wouldn’t be surprising to see a lot of lending companies make a run for the border if this legislation is passed.

If you wonder why I might think I know anything about Michigan, it is because I have lived here most of my life outside of time spent in military service. Being in business, I see what happens in the community. And as a writer, I see what happens through a lot of research. Let’s hope Michigan makes the right moves.