ALPENA - State and local officials are teaming with financial institutions and Michigan State Housing Development Authority to help struggling homeowners stave off foreclosure in a statewide effort to restore Michigan's economy.
Michigan received $498.6 million in federal funding last year for its Hardest Hit Fund, a relief program for homeowners at risk of foreclosure due to involuntary unemployment, reduced pay or medical expenses. The federal government established the fund last year for states with the greatest need, and an assembly of state officials, city leaders and local lenders gathered at a press conference at Alpena City Hall Thursday morning to spread the word about new programs available to eligible homeowners in need.
MSHDA Executive Director Gary Heidel explained the Hardest Hit program as a cooperation between the state and federal governments in response to the nationwide foreclosure crisis but noted that Michigan's problem was atypical.
"As you know in Michigan, we had a slightly different cause of foreclosure crisis than other states," he said. "We didn't have a value problem, we had an underemployment problem."
Heidel said people were losing their homes less because of faulty loans than because they were losing their jobs. These foreclosures have residual effects on surrounding communities as neighborhood property values decline and reduce sources of valuable property taxes, thereby sapping funds from city services. Where once MSHDA was concerned with helping new homeowners purchase their first properties, the recent mortgage crisis prompted the organization to shift its focus to helping residents keep their homes.
Times are tough, but Heidel made the trip to Alpena to stress that change is on the horizon and help is out there, praising local efforts to revitalize the downtown area and encouraging people to utilize new programs to keep their homes for the good of themselves and their neighbors.
"People are so used to foreclosure that they really don't want to go through that process anymore, which is too bad, because there's a lot we can do to help," he said.
As a part of its Step Forward Michigan initiative, MSHDA has divided Michigan's Hardest Hit Fund into three separate programs to address different circumstances:
- Mortgage Loan Rescue Program - up to 12 $750 monthly payments for those receiving unemployment
- Loan Rescue Program - up to $5,000 for those struggling because of temporary layoff or a medical condition
- Principal Curtailment Program - up to $10,000 principal reduction to be matched by the lender for those with reduced income.
Most of the nation's biggest lenders stand behind the program, and local agencies are poised to meet clients' needs. Several officials and representatives from local financial institutions offered their support and shared success stories of the program. Mary Townley, director of MSHDA's home ownership division, anticipates being able to assist 50,000 households by the time funds are likely to run dry in 2014. The key, she said, is to get help before it's too late.
"Help is much more possible if you reach out immediately," she said, urging people to seek help before they get far behind.
Craig Kus, president and CEO of the Bank of Alpena and chair-elect of the Michigan Bankers Association Board of Directors, agreed.
"The key is communication. People need to contact their bankers at the first sign of financial stress. Bankers are there to help," he said.
For those who don't qualify for any of the programs but still need help, other options include calling the loan service directly for assistance or calling MSHDA's Foreclosure Prevention hotline at 1-866-946-7432 to be referred to a local non-profit counseling agency.
To help raise awareness of these options, MSHDA asked for volunteers to distribute posters and doorhangers explaining the program and listing contact information. Anyone interested should contact MSHDA Community Outreach Specialist and Outreach Representative Julie Gardner at 517-241-4656. To inquire about one of the mortgage assistance programs, visit www.StepForwardMichigan.org or call 866-964-7432.
Andrew Westrope can be reached via e-mail at awestrope@thealpenanews.com or by phone at 358-5693.
