The Obama Administration is attempting another housing crisis rescue. This time it targets five states hardest hit by home price declines and unemployment. The objective is to give home rescue aid to homeowners destine for foreclosure because of unemployment, underemployment, or medical crisis.
State housing finance agencies across the nation were challenged to propose innovative programs to assist troubled homeowners. This government assistance fund, named the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets, was designed to target states with the sharpest decline in housing prices (over 20%) and unemployment rates exceeding 12%.
Long Distance
The US Treasury has already approved housing finance agency programs in Arizona (5.1 million), California (9.6 million), Florida (8 million), Michigan (4.5 million), and Nevada (0.8 million). Additional programs are expected to be approved in North Carolina (9 million), Ohio (2 million), Oregon ( million), Rhode Island ( million), and South Carolina (8 million).
The first of these home loan rescue programs to be implemented is in Michigan, by the Michigan State Housing Development Authority (MSHDA). Michigan's Helping Hardest Hit Homeowners plan is structured to provide the following assistance:
Help with mortgage payments for homeowners currently on unemployment, Catching homeowners up on missed mortgage payments due to unemployment or medical crisis, and Federal matching dollars to assist homeowners with principal reductions on homes they can no longer afford due to reduced income (underemployment).Michigan's Governor Jennifer Granholm has also said, in her recent announcement of the new mortgage assistance, that she will be asking the Obama administration to also consider expanding the program to include Michigan's long-term unemployed whose benefits have expired.
The only wrinkle in all of these government mortgage assistance programs is the need for servicer participation. There is no requirement for any mortgage servicer to participate or assist these borrowers headed for foreclosure.
Mortgage servicers are the mortgage lenders and specialty companies that actually manage these mortgages. Their role is to collect payments, manage escrow, and make adjustments and modifications to these loans on behalf of mortgage investors. These investors own the individual home loans at are packaged together into mortgage-backed securities. This complexity and distance between borrowers and investors can make loan workouts challenging.
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.
Government Rescuing Home Loans For Michigan Unemployed
Learn more about Michigan's Helping Hardest Hit Homeowners. program. Hall Financial, a Michigan mortgage lender, is always ready to assist you with any home buying or refinance questions.
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