Michigan Veterans Homeowners Assistance Program announced

LANSING – Michigan Attorney General Bill Schuette and Jeff Barnes, Director of the Michigan Veterans Affairs Agency today launched the Michigan Veterans Homeowners Assistance Program (MiVHAP), which will provide financial assistance to Michigan military service members, veterans and their families who have struggled with the consequences of the mortgage foreclosure crisis.  Schuette and Barnes were joined at the announcement by Anne Marie Dutcher, Administrator of the Michigan Veterans Trust Fund, the state entity charged with administering the new program.

“Our veterans and their families make sacrifices to protect the freedoms we hold dear, and they should never be forced out of their homes illegally,” said Schuette.  “Veterans have special protections from foreclosure under the law, but in many cases those protections were ignored by lenders, who pursued improper foreclosures.  This new assistance is an important step toward restoring the lives of Great Lakes State veterans who may have struggled to keep their homes during the foreclosure crisis.”

“This is an important collaboration with the Attorney General.  The complex challenges of deployment including the tempo of operation and the difficulty with establishing communications during normal business hours with lenders, makes it almost impossible for soldiers to remedy a pending foreclosure from the field,” said Barnes. “Further, the ramifications of foreclosure may result in the soldier losing their security clearance, creating a problem with their military job and can render them ineligible for re-deployment. Foreclosure for military service members continues to create additional problems for years by creating barriers to civilian employment and future home ownership.”

Federal regulators and court settlements have documented approximately 900 service members nationwide who were foreclosed upon in violation of the federal Servicemembers Civil Relief Act.  At least 6,000 more were overcharged during the crisis by JP Morgan.  The case of Sgt. James B. Hurley, a disabled veteran who lost his Hartford, Michigan home to foreclosure while serving his country in Iraq vividly illustrated the problem of lenders illegally foreclosing upon veterans.  Sgt. Hurley was forced to pursue private litigation for nearly four years before settling with Deutchebank in 2011.

MiVHAP will provide financial grant assistance to military service members: Active, Reserve, Air and Army National Guard, and honorably discharged Veterans living or having lived in a home in Michigan for hardship related to the foreclosure crisis since 2006.  Surviving spouses of Michigan military service members whose death occurred in combat since 2006 and currently face foreclosure challenges may also be eligible for financial assistance.

“The mortgage crisis affected many veterans and service members and lasted so long that many lost or are losing their homes to foreclosure,” said Anne Dutcher, director of the Michigan Veterans Trust Fund, which administers MiVHAP. “This program is broadly designed to reach as many veterans and military service members as possible, to help them save their homes and get back on track to secure home ownership.”

Michigan has approximately 700,000 veterans and 12,000 troops active in the Michigan National Guard. More than 22,000 Michigan National Guard members have deployed since September 11, 2001, with 300 currently deployed.  The average deployment period is one year, following a two month mobilization and training period.  The Michigan Guard has some of the most actively deployed combat units in the country, with the average Michigan soldier deploying four to five times throughout their military career.

MiVHAP is a separate program from the Michigan Veterans Trust Fund, but the new program will be administered by the Michigan Veterans Trust Fund state office staff.  Grants will be awarded on a first-come, first served basis and will be made until the money runs out.  Grants that are awarded will be sent directly to vendors, including lenders or government entities owed back taxes.  Each grant will be based on individual circumstances of an application, but priority will be given to requests seeking to avoid mortgage defaults, foreclosure and property tax foreclosure.

How Military Service Members and Veterans Can Apply for MiVHAP Grants

Military service members and veterans interested in applying for MiVHAP grants can request applications and obtain more information by calling 517-284-5296 or by visiting www.michigan.gov/veterans.  Requests by mail may be sent to: Michigan Veterans Trust Fund, MiVHAP, P.O. Box 30104, Lansing, MI 48909.

 National Mortgage Settlement

MiVHAP was made possible by National Mortgage Settlement, which addressed allegations of faulty foreclosure processes and poor servicing of mortgages that harmed Michigan homeowners.  The historic joint federal-state settlement was signed by 49 states and the nation’s five largest banks and lenders: Ally/GMAC, Bank of America, Citi, JP Morgan Chase, and Wells Fargo.  The settlement required the bank mortgage servicers to provide the participating states, including Michigan, up to $25 billion dollars in monetary sanctions and relief.  Michigan residents are expected to receive approximately $780 million in benefits, including the $97 million payment directly to the State of Michigan, which formed the Homeowner Protection Fund.

According to the most recent report from the independent settlement monitor, 15,000 Michigan homeowners have already received approximately $708 million in relief, including short sales and principal reductions.  In addition, 116,000 Michigan loans qualified for cash payments, and of those, 85,000 Michigan claims were filed.  As a result, Michigan had a response rate of approximately 73%, which is significantly better than expected.  The claims are being processed by the independent settlement administrator, and Michigan claimants should expect checks in the mail by the end of the second quarter.  The amount of the checks will be determined by the number of qualified claimants nationwide.  In addition to the monetary relief, the settlement required comprehensive reforms of mortgage loan servicing.

Schuette noted questions have been raised about whether the banks are following the settlement’s comprehensive reforms to improve customer service and transparency for borrowers.  In response, today Schuette sent a letter outlining his concerns about banks meeting certain deadlines and filing requirements for borrowers to the national mortgage settlement’s independent monitor, Joseph A. Smith, Jr.  As a member of the formal state monitoring committee, Schuette will be closely involved in all efforts to protect Michigan homeowners by ensuring full and complete compliance by the banks.

Additional information can be found on the Attorney General’s website at www.michigan.gov/mortgagesettlement.

 Homeowner Protection Fund

In April 2012, Governor Rick Snyder signed legislation creating the $97 Million Homeowner Protection Fund.  The Homeowner Protection Fund will be used for the following eight initiatives:

• Homeowner’s Assistance for military service members and veterans: The Michigan Veterans Homeowner’s Assistance Program (MiVHAP) – $5 million.

• Foreclosure Rescue Scam Victim Restitution – $7.5 million. Many Michigan residents have fallen prey to foreclosure rescue scam artists who offered to help citizens save their homes. This fund will provide restitution payments of up to $3,000 per person for victims of foreclosure scams. Eligibility criteria to determine qualifying cases are currently being finalized.

• Michigan Attorney General Home Protection Unit – $6 million. These funds will allow the attorney general to ramp up investigation and prosecution of foreclosure-related crimes. This unit has brought charges in 36 cases since 2009 and there are approximately 84 cases currently under investigation.

• Blight Elimination – $25 million. These funds are being dedicated to blight elimination efforts throughout Michigan overseen by the Department of Treasury. Detroit will receive $10 million for blight elimination in the city of Detroit and $15 million will be allocated for use throughout the rest of the state.  Given that blighted property contributes to an environment conducive to crime, targeting blight elimination in these areas will further efforts to reduce crime.

• Foreclosure Counseling for Homeowners – $20 million. The Michigan State Housing and Development Authority (MSHDA) and Michigan State University Extension Offices are currently using these funds to expand their much-needed, free homeowner counseling services for citizens seeking to avoid foreclosure.

• Housing and Community Development Programs – $3.7 million. These funds will be allocated to the Michigan Housing and Community Development Fund which develops and coordinates public and private resources to meet the affordable housing needs of low- income households and to revitalize downtown areas and neighborhoods in Michigan.

• Grants to Help Homeowners Refinance – $5 million. These funds will allow MSHDA to provide grants to help pay the closing costs of citizens who use the Home Affordable Refinance Program. Eligible citizens will receive assistance paying closing costs associated with refinancing their home.
• Assistance to Homebuyers – $15 million. These funds will assist both military service members and non-service members by providing grants to offset the purchase price of a home.  This program is administered by MSDHA.

 Legal Protections for Military Service Members and Veterans

Schuette noted Michigan veterans and their loved ones can visit the Attorney General’s website at www.michigan.gov/vetresources  to learn about important legal benefits and special protections afforded to current and former service members.  Military agencies and nonprofit organizations who offer legal assistance are also highlighted.