• Lisa Simpson
• Jul 19,2010
• In: Foreclosure

The Hardest Hit Programme in Michigan

The Hardest Hit programme in Michigan State kicked off with tremendous response. On the first day of Michigan’s programme to assist the unemployed kicked off with telephone lines kept on hold, information confusion and frustration. The Michigan Hardest Hit Program targets help to 17,000 who are unemployed or whose mortgages have gone underwater. For this federal funds of $154.5 million have been earmarked.

The snag is that it is voluntary for lenders to participate – not mandatory. Michigan State has not yet heard from mega mortgage servicers like the Bank of America and also Citibank.

By ten in the morning the state had been bombarded with 30,000 calls. Afterwards its telephone system crashed. There were many hopeful aspirants. Leonardo Martinez is hoping to save his home in Taylor. He lost his job as a foreman a year ago. He is now defaulting on his mortgage for five months. His lender, CCO Mortgage (arm of Charter One) informed him that it has refused to take part in the programme. But Martinez still remains hopeful.

Meanwhile the Michigan State Housing Development Authority has kept updating its online website with a list of the banks that are participating. The state has agreed to reimburse the lenders who take part in the programme.

Keen interest was generated with the launching of Hardest Hit programme of Michigan State. Its contributions will range from $5,000 to $10,000 to help about 17,000 house owners facing trouble.

There are three possible alternatives before the borrowers. Assistance would be given for mortgage payment for those getting unemployment benefits. The state would contribute half the monthly mortgage dues up to a limit of $750 for a period of 12 months or a lump sum of $9,000.

Funds would be made available for those borrowers who are defaulting because of temporary loss of job or health related emergency. The state would come forward with $5,000 for families in this predicament.

Funds would be matched for reduction is principal who find it impossible to meet mortgage commitments because of cuts in earnings. This fund would allow up to $10,000 reduction in principal from the state and to be matched by the lender.

This Hardest Hit plan is offering help to those who have lost jobs or suffering from short term health problems. Other programmes of the federal government like modification of loans have offered help only to those who have the income to run the new deal.

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