(Graphic: Imagechef.com)

(Graphic: Imagechef.com)

LANSING — In a party-line vote, the Senate Banking Committee on Wednesday approved a series of Republican-authored bills designed to provide relief to state residents facing foreclosure. The legislation, substituted for a set of House foreclosure-relief bills, could come to a vote on the floor of the Republican-led Senate as soon as today.

Democrats are decrying the substitute legislation, arguing that it strips the bill of judicial oversight, a key component of the bill passed earlier this month by the Democratic-controlled House.

Under the Democratic proposal, borrowers facing foreclosure would have the option to delay the foreclosure process by entering into negotiations with a housing counselor from Michigan State Housing Development Authority. Those who would not be able to get a loan modification out of the negotiations would then force the foreclosure into a judicial process, rather than foreclosure by traditional advertisement.

Under the Republican proposal, borrowers facing foreclosure who qualify for loan modification based on the Federal Deposit Insurance Corporation guidelines would be allowed to renegotiate, but the lender can still pursue foreclosure through advertisement. The borrower would then have to take action in court to force a judicial foreclosure.

“This foreclosure crisis affects every one of us, as we watch our economy sink and our home values plummet,” Sen. Dennis Olshove (D-Warren), a member of the Senate Banking Committee, said in a statement. “We need to act swiftly on meaningful reform, and this Republican version does not do nearly enough.”

But Sen. Randy Richardville (R-Monroe), the Banking Committee chairman, said it’s not a done deal. “This is not a final bill. I will continue to work with Andy Coulouris,” he said, referring to the Saginaw Democrat who sponsored the House version of the legislation.

This is not the first time the Banking Committee has taken up foreclosure reform. During last year’s lame-duck session, a similar Democratic bill was gutted and replaced by a bill sources said was written by an Oakland County law firm that specializes in foreclosures. Richardville had denied that the firm, Trott & Trott, had a hand in writing the legislation, but Senate Majority Leader Mike Bishop (R-Rochester) confirmed that the firm was involved.

And while some Democrats in the Senate are ready to fight for the House legislation, at least one, Sen. Hansen Clarke (D-Detroit), feels that the bill doesn’t go far enough. The Detroit Democrat, who plans to vote against any of the bills as they currently stand, wants to call a hearing for his own legislation, which would create a foreclosure moratorium for up to two years.

“I don’t want homeowners to have hope that now they have a chance to save their home because now these bills have passed. … The relief these bills provide are too little and too late,” he said in an interview.

Clarke said he will send a letter asking for a hearing on his moratorium bill. “The solution to this is so simple: Give the homeowner a little bit more time. Have a judge bring the lender and borrower together and encourage them to negotiate a reduced mortgage payment.”