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More government home loan relief is ready to implement in Michigan and several other hard hit state economies. This latest round of housing recovery aid is targeted at homeowners struggling to make mortgage payments due to unemployment, medical crisis, or reduced income.
State housing finance agencies across the nation submitted proposals to assist troubled homeowners in their regions. The government assistance fund, named the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets, set to distribute this aid is intended to help states with the sharpest decline in housing prices (over 20%) and unemployment rates exceeding 12%.
The US Treasury has already approved housing finance agency programs in Arizona ($125.1 million), California ($699.6 million), Florida ($418 million), Michigan ($154.5 million), and Nevada ($120.8 million). Additional programs are expected to be approved in North Carolina ($159 million), Ohio ($172 million), Oregon ($88 million), Rhode Island ($43 million) , and South Carolina ($138 million).
Michigan has been the swiftest in rolling out their mortgage assistance plan with Governor Jennifer Granholm announcing the new program last week and the Michigan State Housing Development Authority (MSHDA) posting it’s guidelines for mortgage assistance.
Michigan’s Helping Hardest Hit Homeowners program plans to provide the following assistance:
- Help unemployed homeowners make payments,
- Help unemployed homeowners or those experiencing medical crisis to catch up on mortgage payments, and
- Help homeowners who have experienced a reduction in income to get principle reductions.
Governor Granholm of Michigan already wants more assistance in her state, promising to ask the Obama administration for consideration in expanding the program to “Michigan’s long-term unemployed whose benefits have expired.”
Of course the big caveat in this and all preceding government mortgage assistance programs has been servicer participation. Like many of the government loan modification programs there is no requirement for any of these mortgage servicers to assist these borrowers with any mortgage payment relief.
Mortgage servicers are the mortgage lenders and specialty companies that actually manage these mortgages. There job is to collect payments, manage escrow, and make adjustments and modifications to these loans on behalf of investors that own the home loans in packaged into mortgage-backed securities.
Homeowners that are currently receiving unemployment compensation, have experienced unexpected medical expenses, or have had a significant reduction in income should contact their mortgage servicing agency. This contact information is typically available on your mortgage payment statement.
Like a loan modification this process maybe tedious and frustrating, but good consistent effort is likely to bring some mortgage relief.
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