May 10, 2016
by Scott W. Neal
Orlans Associates, P.C. – USFN Member (Michigan)
The U.S. Department of Treasury approved a $74.5 million plan with the goal to eliminate blight in Detroit and Flint, as well as help all Michiganders (Michiganians) avoid foreclosure. This plan comes after the federal government added $2 billion to the Hardest Hit Fund program. Seventy-five percent of the money distributed will be used for blight elimination in Detroit and Flint.
The present allocation shows that Detroit will receive $41.9 million and Flint will receive $13.9 million. The remaining 25 percent will be used to support mortgage assistance programs throughout the state of Michigan. Specifically, those mortgage assistance funds will aid homeowners who have experienced a hardship impacting their ability to pay their mortgage, property taxes, or condominium fees.
Like many urban areas, Detroit and Flint have a significant population of abandoned homes, which commonly result in increased crime and a corresponding decrease in property values. As the mortgage industry has often seen, this is a recipe for an increased level of foreclosure activity. The continued aggressive approach of the Michigan State Housing Development Authority, with the assistance of the federal funds, has resulted in a positive trend of demolishing the abandoned homes thereby reviving numerous neighborhoods. (Thus far, Detroit has demolished 6,777 abandoned homes deemed unsalvageable). The overall result: communities that previously maintained high percentages of negative equity housing are starting to see viable home sale price increases — which, in turn, has served to decrease the number of overall foreclosures in these urban areas.
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