The U.S. Treasury Dept. has given Michigan until mid-April to come up with an innovative way to use $150 million to help homeowners avoid foreclosure, AP reports.
Last month the Treasury Dept. announced a Fund for Hardest Hit Housing Markets that would distribute $1.5 billion to foreclosure prevention efforts by state housing agencies in California, Arizona, Florida, Nevada and Michigan.
The guidelines give wide leeway to the state Housing Finance Agencies charged with doling out the money to design programs tailored to their region’s circumstance. The money can be spent, for example, to help families who can’t pay their mortgages because of job losses, unable to refinance because plunging home values have left them “underwater,” or to give relief from second mortgage payments.
AP writes that so far federal efforts to stop foreclosure have had very limited success.
The Obama administration’s plans to aid homeowners who fall behind on their payments have been problematic. The biggest effort, the Making Home Affordable program, has helped only about 16 percent of the borrowers who signed up since its launch last year. Figures released by the Treasury Department on Friday showed that as of last month, about 170,000 homeowners had had their payments reduced permanently, of which nearly 77,000 were in the five hardest hit states. About 1.1 million have enrolled in the plan overall.