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Mortgage Concerns

Patricia Burkhardt
Columnist

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42

August 19 2010

've seen some recent information in
the news that there are funds avail-
able in Michigan to help pay my
mortgage. How do I get those funds?
You are correct with regard to the
recent information. The U.S. Department
of Treasury has approved the Michigan
State Housing Development Authority
(MSHDA) plan to distribute federal
funds being provided to Michigan as one
of the hardest hit states with unemploy-
ment and the financial crisis.
The plan did not roll out until July 12,
and a list of participating mortgage ser-
vicers is available on the MSHDA website
www.michigan.gov/mshda . The funds
are intended to assist with mortgage-
payment assistance for homeowners
currently receiving unemployment com-
pensation, who have had some medical
emergency or who have gotten behind
on their mortgage through no fault of
their own.
Specific guidelines on the application
will clarify whether you can apply for the
funds. An application for funds will not
affect any efforts you are currently work-
ing on with a housing counselor.

My spouse has been unemployed for
nearly a year. We are really struggling
to pay our mortgage. Is there any-
thing that we can do?
Yes. First of all, you may qualify for
the "Hardest-Hit Fund" explained above.
As long as there is some normal income
coming into the home, you may qualify
for a loan modification based on your
reduced income.
You also can contact your mortgage
company or work with a housing coun-
selor to apply for the "UP Program:'
which is a new forbearance plan
designed to assist homeowners who
are unemployed; as of July 1, unem-
ployment income can no longer be
counted as income for a loan modifica-
tion application. The program allows,
among other things, a minimum of
three months' forbearance period;
extensions beyond that are at the mort-
gage company's discretion.

There are no negative repercussions to
a borrower's credit report. Homeowners
currently in a trial modification period
have the option of either transferring a
mortgage to the "UP Program" (if they
qualify) or remaining in the trial period
for the loan modification.
If you accept the UP Program and
were in a trial period, you must restart
the application for the loan modification
again at the end of the forbearance peri-
od, including the trial payments. There
are other guidelines and procedures as
well, but any housing counselor will be
able to assist you with the process.

I have a hardship, but my mortgage
company has said unless I'm behind,
it won't help me. I'm thinking of stop-
ping my mortgage payments so I can
qualify for one of the loan modifica-
tion programs. Is this a problem?
Yes, it is a problem. In fact, by deliber-
ately getting behind on your mortgage
payments in order the "qualify for help','
you may actually be disqualified for a
loan modification. If remaining in your
home is your priority, then it is impor-
tant that you make your mortgage pay-
ments before any other expenses.
If you still are unable to make a full
payment, we recommend that you put
funds aside until you have enough to
make a full payment, then send that
amount in to your mortgage company
— unless and until you have a written
agreement with your mortgage company
to either forbear or make reduced pay-
ment amounts.
Even if you make reduced payments
or no payments to your mortgage com-
pany with its permission, those pay-
ments are still owed and usually will
be reported as delinquent to the credit
reporting agencies until you are current
again on your mortgage.
If you find you really cannot afford
your mortgage at all, then you should
work with a housing counselor to assist
you with an exit strategy from your
home that will reduce any legal or finan-
cial implications down the road. ❑

Patricia Burkhardt is managing direc-

tor of the Jewish Housing Association of

Metropolitan Detroit, based in Southfield.

The Jewish Housing Association of Metropolitan
Detroit Inc. is a nonprofit Michigan corporation
whose purpose is to ensure that no Jewish
family goes without affordable housing and to
assist the Jewish community during this time of crisis.
For information, call (800) 458-0404 or apply online at www.jhamd.org .
All services are confidential and provided at no cost to the homeowner.

