Gov. Jennifer Granholm on Wednesday announced the kickoff of the state's $154.5 million "Helping Hardest-Hit Homeowners Fund."
The first-come, first-serve program is expected to help 17,000 households statewide. A more detailed forecast was not available.
State officials anticipate the money will run out in 12 to 18 months.
"The purpose of this fund is to keep the families who have been hardest hit by this economy in their homes," Granholm said. "Perhaps they are on unemployment and they're having trouble making their mortgage payments because of that. This fund will help them."
Funds are available in three different categories:
• Homeowners receiving unemployment benefits can get up to $9,000 ($750 a month, or half of the monthly payment, whichever is lower, for 12 months) toward their mortgage payments.
• Homeowners who are behind on their payments because of obstacles such as a temporary layoff, divorce or serious illness can receive up to $5,000.
• Homeowners who can't afford payments due to reduced income can receive up to $10,000 to pay down the mortgage principal. Funds are a one-to-one match of the lender's contribution.
Granholm said she's asked the Obama administration to extend the program to those whose jobless benefits expired because Congress hasn't approved a benefits extension.
Residents should contact their mortgage servicers to apply. Eligible applications should be approved within 48 hours.
Participation by mortgage servicers is not mandatory, though the Michigan Bankers Association, Michigan Credit Union League and Michigan Association of Community Bankers all support the program.
"This new program is a great opportunity to once again encourage homeowners to contact their lender at the first sign of a problem in paying their mortgage," said Robert Chapman, board chairman of the Michigan Bankers Association. "If the program is not suited for them, there may be another option available for them."
Though mortgage aid programs are helpful, they're not a catch-all solution to foreclosures, said Bob Hubbell, CEO of Coldwell Banker Hubbell Briar-Wood Real Estate Co. in Delta Township.
"It's an epidemic," he said.
Ingham, Eaton and Clinton counties had 723 foreclosure filings in May, up 11 percent from April and about 8 percent from May 2009, according to RealtyTrac. Foreclosure filings include things such as notices of default and sheriff sales, and it's possible for one property to receive more than one filing in a month.
Hubbell said mortgage aid programs just delay inevitable foreclosures in some cases because many homeowners remain unemployed.
"It's not the solution," he said. "It's definitely a remedy, it's a benefit and I'm glad to see them take steps to help these folks."
In February, President Obama announced $1.5 billion in funding for innovative measures to assist families in the states that have been hit hardest by the aftermath of the housing bubble. The Michigan State Housing Development Authority is one of five state housing finance agencies sharing the funding.
Grandpa: Get divorced and receive up to $5,000! Grandpa remains genuiunely empathetic to all who have incurred hardship as a result of serious illness however when did paying for home ownership become a entitlement progam?
Generations of families have incurred difficult and challenging times without the socialized belief that future generations should shoulder their financial burden. Another $1.5 BILLION program to appease those in the "it's all about me", "I'm entitled" and "life is not fair" era.
An entire generation learning to take nourishment, sit, walk and talk are not yet aware of how unfair life has become.
Some in history that truly embraced future generations:
It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world. Thomas Jefferson
Each generation should be made to bear the burden of its own wars, instead of carrying them on, at the expense of other generations. James Madison
For the first time in the history of mankind, one generation literally has the power to destroy the past, the present and the future, the power to bring time to an end. Hubert H. Humphrey
The Constitution of the United States was made not merely for the generation that then existed, but for posterity- unlimited, undefined, endless, perpetual posterity. Henry Clay
Leadership requires the courage to make decisions that will benefit the next generation. Alan Autry
A politician thinks of the next election. A statesman, of the next generation. James Freeman Clarke
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