Michigan is home to some of the biggest home default rates in the U.S. — and now the state wants to do something about that. The state is the first to roll out its own home foreclosure avoidance program — and other states will no doubt keep a close eye on how Michigan performs.
There is a caveat. Even though Michigan is running the program itself (called the Helping Hardest-Hit Homeowners Fund) the $154.5 million heading toward Michigan is part of a $1.5 billion fund that the federal government earmarked for states hardest hit by the housing bust in February. Michigan, along with Ohio, Arizona, California and Florida are all at the top of that list.
But Michigan is the first of those states to offer direct help from the federal government to state homeowners behind on their mortgages.
The fund will be run by the Michigan State Housing Development Authority and will seek to help at least 17,000 statewide homeowners facing a home foreclosure. Those in particular need are unemployed homeowners or homeowners who can’t pay their bills because they’re dealing with a major illness or surgery.The MSHDA site provides specific details on who is first in line for the foreclosure aid:
- Mortgage payment assistance for homeowners currently receiving unemployment compensation.
- Rescue funds for homeowners who have fallen behind in their mortgage payments due to no fault of their own and who have overcome this obstacle.
- Federal matching funds for principal reductions for homeowners who can no longer afford their mortgage payments as a result of reduced income.