The federal government is offering a potential lifeline for homeowners who are struggling financially and are in danger of losing their homes.
Michigan received nearly $500 million in Emergency Economic Stabilization Act money through the Troubled Asset Relief Program, and established the “Hardest Hit” program in 2010. The program has disbursed about $120 million so far, and has until December 2017 to move the rest of the money. Struggling building trades workers should be aware that money could be available to help them.
“The goal is to help keep homeowners and families in their homes, to stabilize home values and neighborhoods,” said Mary Townley, director of home ownership for the Michigan State Housing Development Authority. “No one wants to see a foreclosure. The lenders don’t want them, the homeowners don’t want them and they result in a drop in values in neighborhood.”
Michigan was one of the “hardest hit” states during the Great Recession, a factor which the U.S. Department of Treasury used to place our state in line for the federal money. The portal to get help is www.stepforwardmichigan.org.
The program offers four levels of assistance for homeowners “who have endured a qualifying involuntary hardship.”
- Unemployment mortgage subsidy program. It helps unemployed homeowners stay in their homes by providing monthly mortgage payment assistance directly to their mortgage lender. The program may provide up to the lesser of $1,000 or 50 percent of a homeowner’s monthly mortgage payment each month for a total of 12 months.
- Loan rescue program. Helps homeowners who have fallen behind on their mortgage, but can sustain their mortgage payments in the future. Assistance is paid directly to the mortgage lender to fully reinstate the delinquent amount. Maximum assistance: $30,000.
- Modification plan program. Helps homeowners who have fallen behind on their mortgage or homeowners who have a loan balance higher than the value of their home who are struggling to make a monthly payment. Funds can be sued to provide the homeowner with a more affordable mortgage payment.
- Principal curtailment program. Helps homeowners who have a combined loan balance higher than the value of their home. The maximum assistance is $10,000, and it requires a one-to-one match from the lender for a total amount of assistance of $20,000.The funds are used to buy down the negative equity to reduce the principal balance so the lender can modify the loan.
Townley said it is no longer necessarily true that mortgage providers won’t work with homeowners who have fallen behind in their payments. She said 274 mortgage service companies have signed up to work with the program, and addedthat Michigan-based lenders in particular “have been “wonderful to work with.”