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Treasury Notes

 What I've Learned During the Fight on Home Foreclosure

By: Mary Townley

As the director of the Michigan State Housing Development Authority (MSHDA) Homeownership division, I've learned valuable lessons while launching our state's Hardest Hit Fund program to prevent home foreclosure.

Michigan is among the nation's 18 states and District of Columbia that have a Housing Finance Authority (HFA) participating in the Hardest Hit Fund program. The Hardest Hit Fund provides $7.6 billion for HFAs to design and implement programs to prevent avoidable foreclosure.

In Michigan, where the Hardest Hit Fund program is marketed as "Step Forward Michigan," recent results are promising.

MSHDA data shows:

  • The number of homeowners served and dollars spent within our program increased 40% and 50%, respectively, during the fourth quarter of 2011.
  • Nearly 98% of Michigan's Hardest Hit Fund beneficiaries maintained homeownership six months after receiving assistance; almost 97% continued to own their homes 12 months after receiving assistance.
  • Foreclosures in Michigan declined 24% in 2011 from 2010 with the help of programs like Step Forward Michigan.

These trends reflect the trust behind the U.S. Department of the Treasury's decision to free HFAs to find solutions that best address each state's unique home foreclosure needs. Although it took time to develop and refine models that work in each distinct market, as the fourth-quarter data indicates, MSHDA and other HFAs learned from initial trials and continue to adapt their programs to improve effectiveness.

The history of government funding proves haste often makes waste. Doling millions of taxpayer dollars out the door overnight is not the answer. Housing markets and borrower needs are complex and varied. In Michigan, for example, we learned that many homeowners started applications but did not fully complete the online process necessary for approval. MSHDA created an innovative fix that has successfully spurred applicant completions we call them personally on the phone to help them finish the application accurately.

MSHDA has built a foreclosure prevention program that works. We've built an unprecedented coalition to drive program success with partners including the Michigan Bankers Association, the Michigan Credit Union League, the Michigan Association of Community Bankers, the Michigan Association of Realtors, the Michigan Foreclosure Task Force, and a statewide network of homeownership counseling nonprofit agencies. We¹ve waged an aggressive paid media and grassroots campaign to promote the plan. We're continuing to tailor that plan to the specific needs of Michigan homeowners.

Here are a few emotion-filled examples of positive feedback from struggling Michigan homeowners who are grateful for the help they have received from our program:

  • "Thank you in advance for assisting me during this crisis period in my life. I'm grateful that there are organizations out there that care and who are efficient in helping people who are struggling during this economic downturn. Thanks again for timeliness and efficiency." -Detroit, MI
  • "Just a quick note to thank you for helping me and my little boy to keep
    our home! You couldn't know how relieved I am that there is a program to
    help pay my mortgage and to catch up, for an unemployed, single (widowed) mom! Seems no matter how hard I try, I still struggle to give my son the
    great stable life that he so deserves." -Portage, MI
  • "I am very grateful for the response time it took to process my application. We all have our burdens, but mine has been made lighter because of your organization¹s focused efforts that genuinely made a difference in my life. You are truly inspiring in today's troubled world." -Ann Arbor, MI

The Hardest Hit Fund is just one of many options that are now available to help struggling homeowners. Millions of homeowners across the country have gotten help since 2009, but we know there are many out there who arevstill struggling.

And we need to do more. We need more applicants. Please alert Michiganvhomeowners, family, friends and neighbors facing foreclosure that they can learn how to get support at

Mary Townley is the director of the Michigan State Housing Development Authority Homeownership division.

Posted in:  Hardest Hit Fund
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