Bankrupt MIchiganders Eligible For Mortgage Assistance?

  There may be some for Michigan homeowners caught in the foreclosure crisis.  And filing bankruptcy does not disqualify your, automatically, from the program.

I am not sure why government bureaucrats like long names for programs, perhaps, it makes them feel more important.  This is about Michigan’s Helping Hardest Hit Homeowners program, otherwise known as Step Forward Michigan.

The money comes from yet another government program, the US Treasury’s Hardest Hit Funds.

Of course, supposed to ameliorate the foreclosure crisis.  Does not seem to have met with much success

But, the money is there.

  You have to experience an involuntary hardship to be eligible.  What the heck would a voluntary hardship be?  I guess if you quit your job.

The Michigan State Housing Development Authority, or MHSDA, has MHA as one of its departments or sub-units.  If you get the money, well, you don’t get it, it is paid by the state directly to your mortgage company.

So, you have to give the MHA a mortgage and note.  It is  a 0% interest note, which has no payments, and is forgiven over 5 years at 20% per year.

So, if you sell your house, or it is no longer used as your principal residence, or some other contingencies occur, the state will, that is, may, be able to get the money back out of your house.

These provisions are impacted by bankruptcy.  If it is post-discharge, no problem, case is over as far as this program is concerned.

But, if you are in a pending Chapter 7 or Chapter 13 bankruptcy, there are some issues.  The program requires “authorization from the Bankruptcy Court,” which means a court order;that is the only authorization bankruptcy courts give.

In a Chapter 13 bankruptcy in the Detroit court, you would need court permission to incur the lien, and to have the mortgage paid directly by someone else.  At least, if that bankruptcy is in default.

Which it does not have to be.  Not sure if anyone who is current has qualified, but, the website linked to above says you can apply.

What have you got to lose?

 

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