"Hardest Hit" Fund Yet to Reach Homeowners Needing It Most

By: Sherene Tagharobi Email
By: Sherene Tagharobi Email

Thousands of Michiganders are facing foreclosure, but all hope is not lost. A state fund--the Hardest Hit fund--offers up to 750 dollars a month for 12 months to those who need it most.

"If you foresee something happening, you're struggling a little bit, but you are up to date, you wouldn't qualify," said Kelli Ellsworth-Etchison of the Lansing Area Federal Credit Union.

As the name suggests, it targets homeowners hardest hit by foreclosure. If you're receiving unemployment, or suffer a one-time crisis like divorce, illness, or loss of wages, you may qualify. Ellsworth-Etchison says about a dozen LAFCU members have applied but they've only been able to help one person so far.

"He would have been behind on his payment so we were happy we could provide this service," she said.

Since the state fund launched in July, $2.4 million has gone to 554 homeowners, still leaving nearly $500 million up for grabs. The fund hasn't gone far because big banks like Bank of America and Chase, which control most mortgages, haven't signed up to participate. Some say that's because the program isn't nationwide and would be difficult to process in their computer systems.

State housing officials say an online portal -- yet to be named -- will go up in February. It'll be another way homeowners can apply for assistance and is expected to attract those larger lenders.

"Borrowers should pester their lenders and ask them why they're not part of the program," said Ingham County Treasurer Eric Schertzing. "Contact their state legislators, their U.S. representatives, and make sure the pressure is being applied."

Schertzing says in the end, it'd be worth it for lenders to participate.

"The rescue...it's expensive. Well, it's time intensive, it's people intensive. I think it'd be a lot less costly to them than a foreclosure so they would be doing themselves a favor," he said.

So far, the 134 lenders active in the program are mostly small banks and credit unions.

Schertzing says there's a learning curve that's making it hard for lenders to process the hardest hit fund.

He says banks don't have enough staff to handle the volume of people suddenly needing loan modifications.

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  • by Secret on Jan 31, 2011 at 07:16 AM
    This is nothing but another bailout for the corrupt banks, and mortgage servicers at expense of the taxpaying citizens.. Litton Loan Servicing is soooo corrupt!
  • by Shawn Fath Location: White Lake Michigan on Jan 24, 2011 at 10:07 AM
    Whats unacceptable is in Michigan Chase doesnt participate.They're the 1's who handle the unemployment distributions & handle everything welfare.Chase used Government $ for the bailout of Washington Mutual everything was still ok till they merged with J.P.MORGAN.They received tons of Government Funds for this program & haven't even used 1% of it.They became worse than Bank of America which is very hard to do.Im UNEMPLOYED & was DENIED UNEMPLOYMENT BENEFITS.I got 1 month behind & J.P. MORGAN CHASE called me EVERYDAY.I told them I was unemployed & had no income & not a $ to my name Im actually $25k in debt. They keep asking me if I could make 1 payment what part of me telling them I hand no $ or job did they not get. They wanted me to do loan modification how could I do it with no income. I'll leave when I get a job.STEP UP J.P.MORGAN.I believe they're waiting for more funds & bigger tax break.Michigan be harder on them give the DHS & unemployment tax break to local bank they aleast care
  • by Joseph Location: Los Angeles on Jan 17, 2011 at 06:38 PM
    I work for a big mortgage servicer. I get phone calls like this all the time. I am a renter- and a happy one- owning a home is not the American dream- it is the American nightmare. I saw this coming in CA 6 years ago and knew it would not end well. If I do not pay my rent on time- I will be out in a hurry. This program is set up by the Federal Govt- and the states- which are already bankrupt- so to those of you who are waiting for the Govt to rescue you- I feel bad for you- Life happens- and you need to be able to deal with it. The servicers don't care how we get the money- as long as we get it! If you can get the fed or the state to pay your mortgage- goo for you! Just pay it- or become a renter- If you can not pay for a car- they come take it away from you- same with a house! You were not complaining when home values were going up! You did not pay the banks extra money then! So pay or leave!Realize you made a bad investment- and take your loss and move on!
  • by Scott Location: Lansing Mi on Dec 29, 2010 at 01:26 PM
    I was unemployed for over a year. My mortgage was over 57% of my monthly unemployment benefit. I contacted Bank Of America in July when these funds became available, just to find they were not participating. I spoke with them today and found out several states now qualify with them in this program, but not Michigan. I asked why, and told them Michigan was the first to be on board with this program. I was told by Bank Of America to check back from time to time and see if Michigan residents qualified. I am now employed at about 70% of my previous wages and my home is close to going into foreclosure. I spent over 6 hours with Bank Of America on the phone in the last 2 weeks, and they do not want do much for my situation. I ask, can our federal government force them to participate so the home i have worked so hard to buy and pay for be saved? Please, if you read this be persistent with your lender so they will participate in The Hardest Hit Program, and help you save your home.
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