Letter of Notifcation to Banks Explaining Hardest Hit Plan

MyFoxDetroit.com - Banks doing business in Michigan received a letter in June to explain how they can start providing Hardest Hit services to their customers. Is your bank informed? Are you?

Here's the letter that was sent to banks on June 23rd from the Michigan State Housing Development Authority

Help for the Hardest Hit Housing Markets Michigan Plan

June 23, 2010

On February 19th, 2010, President Obama announced $1.5 billion in funding for innovative measures to help families in the states that have been hit the hardest by the aftermath of the housing bubble. Michigan was selected as one of the five states to share in this investment with an award of $154.5 million.

In partnership with the Michigan Bankers Association (MBA), Michigan Credit Union League (MCUL), Michigan Association of Community Bankers (MACB), Michigan Association of Realtors (MAR) the Michigan Foreclosure Task Force (MFTF), and MSHDA’s statewide network of homeownership counseling agencies, meaningful programs have been created and will be active for your use starting Monday, July 12, 2010. These programs are available for all lenders/servicers servicing loans for property within the state of Michigan.

Programs were crafted with the Michigan unemployment in mind, since 57.4% of national delinquencies reflect job loss as reason for delinquency.

These delinquencies spiral to foreclosure for many residents. Home sales are saturating the market and lenders are forced to sell properties at a significant loss thus impacting overall values in all regions.

In order for Michigan to combat this crisis, it is crucial for us to assist families with staying in their homes, hence stopping the significant drop in values and encouraging growth in communities. This can be accomplished with the following three programs;

Unemployment Mortgage Payment Subsidy

Program designed to provide support to homeowners who are currently drawing unemployment benefits and are struggling to make their monthly mortgage payment.

• One time assistance to Homeowners to retain ownership by subsidizing mortgage payments during their time of unemployment, not to exceed a total of 12 consecutive months.

• Lesser of monthly voucher at 50% of total payment or $750 per month.

Loan Rescue

Many Michigan households have dealt with a significant obstacle (previous job loss, family death or medical issue) in their lives in the past year, yet now have overcome the obstacle and are back on track. Due to the obstacle there is an arrearage with their monthly mortgage payment. This program allows households to possibly restructure their mortgage with their lender and receive funds to cover this arrearage.

• A one time maximum $5,000 household grant
• Existing Lender may modify loan to enhance homeowners success of ownership


Principal Curtailment

One time assistance for homeowners to enable Lender/Servicer to reach an amicable Loan Modification Agreement, re-amortizing the lower outstanding principal balance. Grant amount may include a principal curtailment up to $10,000. Lender/Servicer must match with a minimum dollar for dollar curtailment.

• Up to $10,000 per household from MSHDA
• Match from lender $ for $.

Detailed program descriptions and required forms may be found by visiting our Web site address at www.michigan.gov/HardestHit

Starting the week of June 28th, we will begin scheduling webinars for training and questions. All schedules for training will be posted on www.mittac.org. Look for these webinars under registration “MSHDA-H4HH”.

Prior to offering these programs to homeowners in your portfolio, your office must submit a fully executed “Help for Hardest Hit Servicer Agreement” along with required insurance documentation. This agreement may also be obtained from our web site.

An extensive marketing campaign to notify struggling homeowners will begin July 12th, 2010. This campaign will include Television, Radio and in depth web strategy.

Our office is looking forward to working with all Mortgage Loan Servicers state wide to assist in combating the foreclosure crisis in Michigan. We will focus for the next few weeks in sharing ideas, education on programs and process, and then begin to see the positive uses of these funds.

If you have any questions, feel free to contact the MSHDA Homeownership Division at (517) 373-6840.