Foreclosure Assistance

Foreclosure Assistance

This initiative relates to the MAP Initiative 4: Creating Attractive and Desirable Places. MAP Initiative 4 discusses Muncie’s high rate of housing vacancy in the post-industrial economy. This initiative seeks to prevent growth of underutilized land, which happens when property becomes vacant. Thomas Park/Avondale has experienced a relatively large number of foreclosures, and already has vacant lots dotted across the neighborhood. By assisting homeowners with foreclosure prevention, the neighborhood could prevent the home from becoming vacant and blighted.

How

This initiative was created in response to the problems identified by residents that were at the February, 2016 meeting

Why

Residents that were present at the neighborhood association meetings had two common worries about foreclosures. The first being that they wanted to see their neighbors stay in their homes. Many residents find it troubling to see their friends and neighbors removed from their homes, and this can cause the morale and pride in the neighborhood to drop. The second worry about foreclosures dealt with the issue of foreclosed homes remaining vacant for long stretches of time. Vacant homes bring forth many concerns including safety hazards, accumulation of trash, lack of maintenance, and decreased the value of surrounding homes. These are all things residents of Thomas Park\Avondale want to avoid, and residents believe one of the best ways to fight vacancy is to help prevent foreclosures.

What

In order to accomplish the goal of reducing the number of foreclosures in Thomas Park/Avondale, residents should be aware of foreclosure assistance methods. The State of Indiana has created the Indiana Foreclosure Prevention Network which aims to help struggling homeowners with their mortgage payments. The Indiana Foreclosure Prevention Network uses Indiana’s Hardest Hit Fund (HHF) in order to help with mortgage payment assistance up to $30,000 [1]. For those who may not qualify for the payment assistance, transition assistance may be available.

The United States Federal Government created the Making Home Affordable program (MHA) in 2009. MHA offers many programs to help homeowners in the need of finical assistance. One of the most helpful programs available to homeowners in risk of foreclosure is the Home Affordable Modification Program (HAMP). Homeowners who are struggling to make their mortgage payments, or are in danger of falling behind on their mortgage, maybe eligible for HAMP. HAMP was designed to help lower monthly mortgage payments, allowing them to become more affordable and keep residents in their homes. There are certain eligibility requirements which homeowners must meet in order to receive HAMP assistance. Homeowners must be delinquent or in danger of falling behind on their mortgage, must have obtained their mortgage on or before January 1, 2009, have not had their property condemned, and owe up to $729,750 on their primary residence [2]. Finally, the homeowner’s mortgage must be through a MHA participating company. Information on all MHA programs is available for free 24 hours a day in more than 170 languages [2].

Source [1]

Source [2]

Who

This initiative could be undertaken by residents of the neighborhood who are at risk of losing their home due to foreclosure. There is currently no deadline for the Indiana Foreclosure Prevention Network. Making Home Affordable has a deadline of December 31, 2016.

Where

This initiative can take place by neighbors over the entire Thomas Park/Avondale neighborhood.

Case Studies

Milwaukee Foreclosure Partnership Initiative

Milwaukee, Wisconsin, had roughly 16,000 foreclosure actions started against the cities homeowners [3]. The largest number of these residents came from former industrial neighborhoods which struggled after the industry moved away from the area.  In order to prevent the foreclosure crisis from overwhelming the city, In June 2009 the Mayor of Milwaukee Tom Barrett established the Milwaukee Foreclosure Partnership Initiative (MFPI) [4]. The initiative was made up of 21 key members of the community including, lenders, nonprofits organizations, philanthropic groups, and the local government. MFPI believed that there were three goals to preventing the foreclosure crisis gripping the city. These goals were defined as Prevention, Intervention, and Stabilization. The goal of prevention was achieved by expanding outreach and education efforts to both current homeowners and potential home buyers. Reaching out to and educating homeowners and future homeowners allowed the residents of Milwaukee to be knowledgeable of potential financial dangers associated with home ownership, and how to prevent them.

The goal of this intervention was achieved by creating a court-based mediation program. This court-based mediation program sought to slow the process of foreclosure and created additional methods of foreclosure prevention for lenders and homeowners. MFPI also offered refinancing to homeowners who could not afford their existing mortgages. The goal of stabilization was achieved by preserving vacant properties. MFPI registered and monitored vacant properties to make certain that the vacant properties were well maintained and secure. MFPI began seeing results almost immediately after hosting their first outreach and educating in 2009 [3]. By December 2010 MFPI saw its best results of 283 successful mediations. MFPI’s efforts were funded by the use of more than $37 million Neighborhood Stabilization Program (NSP) funds, which were leveraged into an additional $24 million in private investment [3].

Source [3]

Source [4]

Genesee County, Michigan, Foreclosure Prevention Specialist

Genesee County, Michigan, created the official position of Foreclosure Prevention Specialist in 1999 [5]. Cities in Genesee County, including the city of Flint, had seen a sharp increase in the number of foreclosures. In order to fight the increase of foreclosures, Cathy Town the Foreclosure Prevention Specialist developed a program to help homeowners in danger of foreclosure. A checklist was created in order to determine what available sources of funding would help homeowners the most. The program’s first step was to have a foreclosure prevention officer meet with homeowners in danger of foreclosure. The foreclosure prevention officer would use the checklist to determine which available funds would help the homeowner they were visiting, and would put them into contact with the proper agencies. By January 2007, during the beginning stages of the foreclosure crisis, Ms. Town had contracted with Legal Services of Eastern Michigan in order to seek out homeowners in the need of assistance. Legal Services of Eastern Michigan would deliver an assistance package which contained information on foreclosure prevention, and what steps the homeowner could take. The outreach method of foreclosure prevention allowed Genesee County to assist over 600 clients from January to April 2007 [5]. Funding for the program was provided by Genesee County.

Source [5]

Resources

Indiana Foreclosure Prevention Network

Indiana Foreclosure Prevention Network offers Hardest Hit Funds which may cover a monthly mortgage payment, including principal, interest, taxes, and homeowner’s insurance. Eligible Indiana homeowners can get assistance for up to 2 years of $30,000. The requirements which must be meet are:

Applicant must:

  • Be an Indiana homeowner
  • Own only one home, and currently reside in that home
  • Be unable to make their mortgage payment because of involuntary financial hardship such as job layoff or extremely high medical bills
  • Meet addition eligibility requirements based on income

The first step is to contact the Indiana Foreclosure Prevention Network at 1-877-GET-HOPE (438-4673) or online at www.877gethope.org. The applicant with need to create an online profile, and must know basic homeowner information, property and lender information, financial information, and complete a hardship letter. A councilor will contact the applicant within a few business day. The applicant will need to have these documents available when the counselor contacts them:

  • Any correspondence from your mortgage company or its attorney
  • Most recent recorded mortgage
  • Most recent mortgage statement
  • Most recent bills and statements for all expenses
  • Copy of unemployment eligibility and explanation of benefit or a print out of unemployment insurance homepage (if applicable)
  • Last 30 days of pay stubs for all employment and income sources
  • Documentation of any other public benefits such as SSI
  • Last two months of all bank statements
  • Previous year’s tax returns and W-2/1099(s)
  • Credit report for homeowner and co-homeowner

The counselor will help the applicant finalize the application and determine their eligibility for Hardest Hit Fund.

Making Home Affordable

Making Home Affordable’s Home Affordable Modification Program (HAMP) are available to homeowners who need assistance is lowering their monthly mortgage payments. The HAMO deadline is December 31, 2016. Homeowners must meet the following requirements [2]:

  • You are struggling to make your mortgage payments due to financial hardship.
  • You are delinquent or in danger of falling behind on your mortgage.
  • You obtained your mortgage on or before January 1, 2009.
  • Your property has not been condemned.
  • You owe up to $729,750 on your primary residence or one-to-four unit rental property (loan limits are higher for two- to four-unit properties).

Have a mortgage from a participating in the MHA program (a list is available here)

The first step is to connect to www.makinghomeaffordable.gove and follow the steps. Information which the applicant must have available in order to complete the application include [2]:

  • Your monthly mortgage statement
  • Information about any other mortgages on your home or other property
  • For salaried employees or hourly wage earners, 2 recent pay stubs (not more than 90 days old) that reflect year-to-date income
  • For self-employed homeowners, your most recent signed and dated quarterly or year-to-date profit and loss statement
  • Documentation of additional income received from other sources (tips, commissions, bonuses, housing allowances, overtime, etc.)
  • Documentation of any benefits received (Social Security, disability, death benefits, pension, public assistance, or adoption assistance, etc.)
  • Documentation of any other income you want considered (alimony, child support, separation maintenance payments, etc.)
  • Two most recent bank statements
  • A utility bill showing your name and property address
  • Unemployment benefits letter, if applicable
  • Information about your savings and other assets
  • Your two most recent federal tax return with all schedules, including Schedule E
  • It may also be helpful to prepare a letter describing the circumstances causing your hardship

Once the applicant has all of that information available, they will need to complete the Request for Mortgage Assistance Form (RMA). Once the applicant has filled out they will be prompted to submit the complete forms. Once the form is submitted the applicant will be contacted by a HUD-approved housing counseling agency. The next step will be for the applicant to submit their completed and reviewed form to their mortgage company.

Contact Information

Indiana Foreclosure Prevention Network

Indiana Foreclosure Prevention Network
30 South Meridian Street, Suite 1000
Indianapolis, IN 46204
Phone:   (877) 438-4673
Email:     ifpn@ihcda.in.gov
http://www.877gethope.org/

 

Making Home Affordable

Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
Phone:   (888) 995-4673
Fax:       (202) 622-6415
https://www.makinghomeaffordable.gov/pages/default.aspx