Gov. Jennifer Granholm announced a new anti-foreclosure program on Wednesday, a program to distribute funds from a newly established Helping Hardest-Hit Homeowners Fund. The Michigan State Housing Development Authority (MSHDA) will work with banks, credit unions and counseling agencies to use the $154.5 million fund, with the goal of helping 17,000 Michigan residents avoid foreclosure.
But at least one foreclosure advocacy group, the Moratorium Now! Coalition, says the new fund intentionally avoid helping those who are hardest hit. In a press release the group said:
First of all, for unemployed workers to get any assistance, they have to be receiving unemployment benefits. At a time when 400,000 unemployed Michiganders are about to have their benefits cut off due to Congress refusing to pass an extension of benefits, these 400,000 Michiganders stand to get nothing from this program….
In addition, the programs being announced pass all funds directly through the banks, and essentially are subsidies to them so they can collect payments on severely underwater mortgages caused by bank fraud and racist, predatory lending. Moreover, history has shown that these announcements don’t mean that benefits ever get to those in need. Witness Governor Granholm’s “Save the Dream” program which helped one homeowner total. Or the federal Home Affordable Modification Program which has yet to modify 10% of the 3-4 million that were supposed to be helped.
MSDA rejected proposals from advocates for distressed homeowners to use the $150 million in federal funds to help families losing their homes repurchase them at them true value because the money would not go directly through the banks. Similarly, Governor Granholm has rejected using her emergency powers to place a moratorium on foreclosures modeled on the 5 year moratorium that was enacted in the 1930′s and declared constitutional by the Michigan and US Supreme Courts, because as she put it, “the banks don’t like it.”