Foreclosure crisis continues to threaten Michigan residents

Mortgage troubles? Financial assistance and free housing counseling is available to Michigan homeowners.

Michigan’s foreclosure crisis is expected to persist for another year, but free counseling, free legal services and in many cases, direct financial assistance are available to help struggling families save their homes.

The Michigan Foreclosure Task Force reports that more than 280,000 homes have been foreclosed on in the state since 2009. The total is expected to climb to about 327,000 by the end of 2012, according to Neeta Delaney, co-director of the task force.

“Homeowners have a much better chance of keeping their homes if they take advantage of available help and act promptly,” Jim Buxton, of Michigan State University Extension said.  “They are entitled to a 90-day window to stay in their homes if they work with a housing counselor and the lender.”

"The first thing to do is make sure you are opening your mail and communicating with your lender. Not opening the mail is a huge factor in people losing their homes," said Delaney, of the Foreclosure Task Force.  She further explained that as soon as people become aware that they may have trouble with mortgage payments, they should reach out to a certified foreclosure counselor. Free legal services are also available. "Our counselors have had a lot of success in bringing homeowners together with lenders and preventing foreclosures," said Jim Buxton. 

Financial assistance is also available in many circumstances.  The federal government allocated nearly $500 million for the Helping Michigan’s Hardest Hit Homeowners’ program, according to Mary Townley, director of Homeownership for the Michigan State Housing Development Authority (MSHDA).

The Hardest Hit program is expected to assist more than 50,000 households.  Homeowners can begin the process of applying for assistance online at “A Step Forward,” a webpage set up by the MSHDA. Homeowners can receive money in three circumstances:

Those receiving unemployment compensation can receive a subsidy of up to 50 percent of their mortgage payment, but not more than $750 a month, for 12 months.

Homeowners can get onetime assistance of up to $10,000 if they have fallen behind in their mortgage payments but now have the monthly income to be a stable homeowner if they can catch up.

Those unable to keep up with monthly payments can get up to $10,000 to reduce their principal, if the lender will agree to match it.  This can help homeowners whose income has dropped to reduce their monthly payments.

Step Forward Michigan is now partnering with Ionia, Macomb, Washtenaw and Lapeer County Michigan State University (MSU) Extension counselors to track homeowner applications on a portal. 

"Unfortunately, there are still many Michigan families in who are at risk of losing their homes because they have lost jobs or are earning less," said Jim Buxton.  "We have excellent resources available, but it’s important for people to acknowledge their situation and take action."

Michigan is blessed with a solid network of housing counselors to help. Search for one in your area with the MSHDA’s online search tool.

For more information about foreclosure in Michigan, visit the Michigan Money Health website or the MSHDA website.

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