The Congressional Research Service is a nonpartisan group that supports congress with a fact-finding service. It has recently released some startling new information regarding the way many states are handling federal funds. The Hardest Hit Fund was set up by the federal government as one of its initiatives to help with American homeowners who are most at-risk of losing their homes through foreclosure. The CRS study revealed that Michigan is one of the states that have released the least amount of dollars to homeowners from The Hardest Hit Fund.
According to the study, the federal government gave out over $7 billion in funds, and only $3 billion of that has been disbursed by the states. This is troubling news, because Michigan was one of the first states to receive federal funds in order to stave off the flood of foreclosures impacting the state. Michigan also ranks highly for declines in property value and unemployment rates.
Michigan was required to submit a plan detailing how it would use the funds to help homeowners struggling with payments and facing a foreclosure. While many of the questions are being pointed to the state, there are critics who are pointing fingers at the federal government's lack of specificity in detailing how the funds should be used, including the number of homeowners they expected to receive funds. Several other states in the program have begun to make changes to their program in order to distribute the funds in a timely manner.
While foreclosure rates in Michigan may be higher than the state would like to see, there are programs that have been established to help homeowners maintain their homes. Programs like this one offer alternatives to Michigan homeowners who are looking to reduce their debt and avoid a costly foreclosure. It is important for homeowners to understand all of their options as they navigate the complexities of debt management. Many facing foreclosure have opted to file for bankruptcy to help relieve their total debt.
Source: pewstates.org, States With High Foreclosure Rates Misusing Federal Mortgage Aid, Pamela M. Prah, Nov. 26, 2013