Avoiding Foreclosure

ometimes the first of the month seems to come too soon. With a house payment and other bills piling up at once, some people wake up with anxiety at the beginning of each month thinking: “Another mortgage payment is due already? Where did the time go?”

Well, there is a bridge over troubled waters!

President Obama established the Hardest Hit Fund SM in February 2010 to provide federal aid to families in states devastated by the economic and housing market downturn. The Michigan Homeowner Assistance Nonprofit Housing Corporation (MHA), a division of the Michigan State Housing Development Authority, received $498.6 million from the Fund. These monies are specifically allocated to help struggling homeowners who are at high risk of default or foreclosure.

Michigan was selected for this federal aid because of an unemployment rate above the national average and a steep decline in home prices. I strongly recommend that any homeowner whose mortgage payments are behind consider applying for assistance through MHA’s A Step Forward Program, often referred to in our state as the Michigan Hardest Hit Fund.

A Step Forward Program offers three very helpful programs for struggling homeowners:

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  • For Michigan homeowners currently receiving unemployment compensation, The Unemployment Mortgage Subsidy Program will pay up to $750 per month or 50 percent of your mortgage payment for up to one year. This money is a forgivable loan at 0 percent interest.
  • The Rescue Program will make a one-time payment of up to $5,000 to your mortgage company. It is designed to help homeowners overcoming a life crisis such as divorce, illness or death of spouse. The Rescue Program is perfect for people digging themselves out of a financial hole who just need a little boost.
  • The Principal Curtailment Program is designed to help pay down the mortgage principal so that you have a better chance of qualifying to refinance your loan and possibly reduce the mortgage payment. This program pays up to $20,000 to reduce your mortgage balance. Your mortgage company must agree to match the funds offered. Imagine having $40,000 put toward paying off your mortgage.

Homeowners can apply for loan assistance at www.stepforwardmichigan.org or by calling 866-946-7432.

A Step Forward Program loan assistance program and the Michigan Hardest Hit Fund are not based on credit or FICO scores. To apply, you will have to provide some personal information, including recent pay stubs or unemployment compensation documentation, monthly mortgage statements from all lenders, most recent tax returns and bank statements. There is no fee to apply. There are no gimmicks.

The first step to recovering from a crisis is to ask for help. Your financial hardship may seem like it will last forever, but it is only temporary. Better and brighter days are ahead.

Information about other assistance programs for buyers and sellers can be found at www.michigan.gov/mshda.

If you have any questions for me about real estate, send them to [email protected].

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