Stop Michigan Foreclosure

Here’s one of those good news/bad news things for you today.

Since 10/1/08, homeowners in a danger of facing a foreclosure have had a new option call “H4H” (Hope For Homeowners).  In a nutshell, FHA government-backed loans loans were made available to families facing foreclosure.

Recently, FHA expanded this program to make even more families eligible.  That’s the good news!

The bad news is, well, you’re in Michigan.  One of the strict criteria of refinancing into this program has to do with the value of your house compared to the debt.  When you refinance, there needs to be some equity there.  That means that the appraised value is going to need to be about 6% more than what you owe on the house.

For example, if you owe $150,000, it needs to appraise for about $159,000.  Why?  FHA wants 3.5% equity after the refinance, plus you’ll need the remaining (about 2.5%) amount to cover the costs of the refinance.

Why is this bad news for most families in Michigan?  Why will most homeowners facing a Michigan foreclosure be unable to qualify for this program? Because most houses have decreased in value substantially over the last 3-5 years.  So if you owe $150,000, and purchased or refinanced within the last 5 years, the chances of getting that $159,000 appraisal are pretty small.

I don’t like to be the bearer of bad news.  If you’ve talked to me, you know I like to keep you focused on the positive future that’s ahead of you.  But you need to understand that putting your time and energy into a program that’s unlikely to work is not good for you.  It can lead to tearing your family apart!  You need to focus on solutions that have the best chance of success.  And of course, I can help you with that (never a fee) – but, you need to call me.

Emily