The Michigan Legislature passed a bill that would divvy up $97.2 million to create a Homeowner Protection Fund to assist those affected by the national foreclosure crisis. Gov. Rick Snyder is expected to sign the bill into law posthaste.
The funds are coming from the state’s share of a national settlement with five leading mortgage servicers that were accused of shady foreclosure processes and servicing.
According to the Attorney General’s office, the money is being split as follows:
· Foreclosure Rescue Scam Victim Restitution – $7.5 million. Many Michigan residents have fallen prey to foreclosure rescue scam artists who offered to help citizens save their homes. This fund will provide restitution payments of up to $3,000 per person for victims of foreclosure scams. Eligibility criteria to determine qualifying cases will be established at a later date.
· Assistance for Veterans – $5 million. The men and women who served our country also have been affected by poor mortgage servicing and foreclosure practices. These funds will provide targeted relief for military servicemembers unable to qualify for existing programs.
· Michigan Attorney General Home Protection Unit – $6 million. These funds will allow Schuette’s office to ramp up investigation and prosecution of foreclosure-related crimes. This unit has brought charges in 28 cases since 2009 and there are approximately 69 cases currently under investigation. These funds will allow for additional investigators and prosecutors to combat foreclosure related crimes.
· Blight Elimination – $25 million. These funds will be dedicated to blight elimination efforts throughout Michigan. $10 million will be allocated for blight elimination in the city of Detroit and $15 million will be allocated for use throughout the rest of the state. Given that blighted property contributes to an environment conducive to crime, targeting blight elimination in these areas will further efforts to reduce crime.
· Foreclosure Counseling for Homeowners – $20 million. The Michigan State Housing and Development Authority (MSHDA) and Michigan State University Extension Offices will use these funds to expand their much-needed, free homeowner counseling services for citizens seeking to avoid foreclosure.
· Housing and Community Development Programs – $3.7 million. These funds will be allocated to the Michigan Housing and Community Development Fund which develops and coordinates public and private resources to meet the affordable housing needs of low income households and revitalizing downtown areas and neighborhoods in Michigan.
· Grants to Help Homeowners Refinance – $5 million. These funds will allow The Michigan State Housing Development Authority (MSHDA) to provide Grants to help pay the closing costs of citizens who utilize the Homeless Assistance Recovery Program (HARP). Eligible citizens will receive assistance paying closing costs associated with refinancing their home.
· Assistance to Homebuyers – $15 million. These funds will assist both service members and non-service members by providing grants to offset the purchase price of a home. Service members may be eligible for grants up to $5,000 and non-service members up to $3,000. Eligibility criteria to determine qualifying cases will be established at a later date.
· Education Achievement Authority – $10 million. These funds will be used by the Education Achievement Authority (EAA) to help improve performance of Michigan’s lowest performing schools.
More information is available at the state’s website.
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