October 17, 2007 (LPAC)--While President Bush proposes that loosening all the criteria for Federal Housing Administration (FHA) loans for lower-income households will help those households to refinance subprime mortgages and ease the foreclosures crisis, Michigan's record FHA foreclosures have prompted the FHA to arrange "counseling" and re-sales gimmicks.

The Detroit News reports that officials with the U.S. Housing and Urban Development (HUD), under which the FHA now falls, are organizing mortgage counseling on a large scale in Michigan, and are also considering paying bonuses to real estate agents for reselling the unsold homes foreclosed on, to get them back on the tax rolls.

Nearly 4% of Michigan's FHA loans were foreclosed on in the 12 months ending September 30, 2007; while payments on about 9,000 more are at least 90 days delinquent in Wayne, Oakland, and Macomb counties.

For the first time ever, HUD is contacting by mail thousands of delinquent FHA borrowers in Metro Detroit, urging them to attend a November 15th financial counseling event with lenders.

"For us as a nation, [the foreclosure crisis] is going to be one of the biggest problems we've faced since the 1930s," said Deborah Younger, executive director of the Detroit Local Initiatives Support Corp, which provides assistance to housing non-profits.