Simplify the foreclosure process - get educated by a foreclosure counselor
Most distressed homeowners counseled by Michigan State University Extension, 78 percent, were able to keep their homes.
Foreclosure rates have declined over the last several years, but the economic crisis is not over. During the past three years, 53 percent of Americans have made some kind of sacrifice to cover housing costs, reports the 2016 How Housing Matters Survey from the MacArthur Foundation. They took on more work, stopped saving for retirement, or increased credit card debt. A significant majority (81 percent) of respondents continue to believe that housing affordability is a problem in the United States today. Independent research by the Urban Institute shows that delinquency, default and foreclosure rates for borrowers who have received counseling from a HUD-approved housing counseling agency are 30 percent lower than uncounseled borrowers. The good news is that there are free housing counseling services available locally for struggling homeowners to talk about their situation and understand their options.
HUD-approved housing counselors are impartial, trained professionals who can help you make the decisions that are right for you. They provide homeowner education, pre-purchase and foreclosure prevention counseling, assistance with creating a budget and setting financial goals, fair housing information and a host of other services. Housing counseling allows more consumers to receive individualized and objective advice on understanding the rights and responsibilities of homeownership, to address credit and savings barriers and to meet their overall housing and financial goals.
During the past 10 years, 25 million homeowners were able to resolve their housing issue and avoid foreclosure, according to the Industry Extrapolations and Metrics report, April 2016. Among these solutions, there were 1.6 million permanent modifications through the Home Affordable Modification Program (HAMP), 2.4 million HAMP trial modifications, and 6.3 million servicer proprietary modifications. Also included were 14.8 million non-modification solutions, including various repayment, retention, and house sale plans. The HAMP program ends in December 2016. Homeowners who may qualify should send an application to their lender during the next few months.
In Michigan, the Step Forward Michigan program has provided assistance to over 30,000 homeowners to keep their homes since 2010. They received financial help to get caught up on delinquent mortgage payments or property taxes, up to $30,000. Some received loan modifications with more affordable monthly payments. Funds are available for the next year or so to help more struggling homeowners.
Facing foreclosure can be very confusing and overwhelming. Current homeowners who are concerned about or have fallen behind on their mortgage and/or property tax payments and are facing foreclosure can call with questions or schedule an appointment. The goal is to assess their situation and options, determine if they might qualify for assistance to keep their home and educate about the foreclosure timeline. Counselors also assist with lender communication and submitting complete application requests.
Michigan State University Extension is a HUD-approved housing counseling agency and has many MSHDA certified housing counselors at multiple county offices to assist you by phone or through technology. Find the one staff person nearest you at mimoneyhealth.org. Other MSHDA-certified housing counselors may be located using mshda.info/counseling_search/