A perfect storm of “job losses, increasing monthly mortgage payments, and property value depreciation, among other factors, have made Michigan the center of the foreclosure crisis,” according to Michigan Attorney General Bill Schuette.
The effects of foreclosure threaten the dream of homeownership for many, ruin credit and push families into crisis very quickly, reducing their quality of life and putting them at risk of homelessness. Children forced to move due to a foreclosure run the risk of being uprooted from their schools and isolated from friends.
Besides having personal ramifications, foreclosure affects communities through abandoned housing, declines in neighborhood property values and an increase in the cost of city services. A single foreclosed property can be a high cost to taxpayers while the cost of foreclosure counseling is low in comparison.
An Urban Institute report, published January 2012, demonstrated significant positive effects of financial counseling. Counseled homeowners were more likely to receive more affordable loan modifications, cure serious delinquencies, remain current on their loans and avoid foreclosure completions altogether.
Michigan State University Extension staff members are working to help Michigan residents keep their homes in these uncertain economic times. In Ionia County, Brenda Long, Extension educator; Jim Buxton, Extension program worker; and Vicki Newcomb, Michigan Foreclosure AmeriCorps Program member; counsel struggling homeowners. The foreclosure education and intervention is available at no cost to distressed homeowners.
In 2011, MSU Extension Ionia County served 115 homeowner households with one-on-one foreclosure mitigation education and counseling. Out of those homeowner households, 36 percent were able to keep their mortgages current, keep to a repayment plan or receive a modification cure. Only 16 percent foreclosed.
Preventative measures can prevent financial problems before they lead to foreclosure. Open to anyone interested, the MSU Extension Pre-Purchase Home Buyer Education Program served 20 households in Ionia County in 2011. Most had already chosen their homes to purchase and were referred by local lenders for education prior to closing on their mortgage loans. Education focused on closing, budgeting, and keeping and maintaining the home.
MSU Extension educators Chris Venema in Lapeer County, Jean Lakin in Macomb County and Terry Clark-Jones in Washtenaw County coordinate similar housing education programs.
MSU Extension also offers an online homebuyer education course available statewide at ehomeamerica.org/msue.
The Michigan State Housing Development Authority (MSHDA) has been a key partner of MSU Extension since 1990. Because our housing counselors are MSHDA certified, we receive support, local partnerships and opportunities for revenue.
MSU Extension is also a HUD-approved organization statewide. The mission of HUD (the U.S. Department of Housing and Urban Development) is to create strong, sustainable, inclusive communities and quality affordable homes for all.
Thanks to our MSU Extension colleagues who are helping people to improve their lives by reducing the risk of mortgage foreclosure through financial counseling and education.