Foreclosure Related Crisis Makes Michigan Governor Seek Federal Help

The foreclosure related crisis is making Michigan Governor Jennifer Granholm seek federal help. The state is gearing up for budget trimmings. She stressed that the government has to act fast to help the automobile industry that has been hardest hit by the foreclosure related recession. Innumerable house owners are about to be foreclosed and occupants evicted from reo homes.

During the lame duck session she wanted the legislature to enact new laws that would permit the state of put on hold foreclosure process for up to 90 days. This grace period would enable the lenders and borrowers to work out an amicable plan. The step was to be directed towards residential mortgages. It would enable the state to get prepared about utilizing its share of the $700 bail out plan so that the borrowers could continue to stay in the houses that were their homes.

Governor Jennifer Granholm (Democrat) told reporters, “Bottom line is we want to be in the position to be able to keep people in their homes.” She pointed to the falling consumer confidence and drop in auto sales. She said that she would issue an order to trim state spending by the end of this year. She would be waiting to get news of economic forecasts later in this month. It is not as yet clear if the state trimmings will impact negatively on K-12 public schools. She added, “It’s going to be very, very challenging period.”

Granholm went on to add that the trimmings in the budget would be compensated if the Bush government and the Congress came forward with Medicaid expenses. She sent a letter to the Democrats in the Congress requesting for federal funds for making improvements in infrastructure that would improve Medicaid, benefits for the unemployed as well as food stamps. She also wanted help for the foreclosure victims and the stumbling auto industry.

Granholm said that the state will keep aside $150 million for the local banks and credit bodies to lend out to small business concerns during the time of this foreclosure related crisis. The state would also buy the deposit certificates issued by the banks and credit unions that would be participating in this plan. They will have to give 80% of the funds to businesses in Michigan. She wants the expansion of Detroit’s Cobo Center, the building of a light rail line at Detroit and the allowing public as well as private cooperation for helping impoverished students with their education..