March 17, 2009

    DETROIT -Attorney General Mike Cox today announced that $9.9 million dollars from a 2008 Countrywide Financial settlement involving questionable loan practices will soon be disbursed to victims of deceptive mortgage loans, local governments and charities in an effort to help fight the devastating effects of the home foreclosure crisis. 

    Cox said 3,697 people who received sub-prime and pay-option ARM loans between January 1, 2004 and December 31, 2008, and later lost their home, will each receive a payment of $1,800.  The total amount of payments to individuals, $6.7 million, makes up two-thirds of the settlement funds.  Those eligible for the payment will be contacted via mail regarding their payment. 

    "For most families in Michigan, the largest investment they'll ever make is their home," said Cox.  "But, too many families can't go home again due to a foreclosure.  These funds will help make a difference in the fight against foreclosure in Detroit and the region."

    Broader efforts to help families, local governments and charities fighting the next wave of foreclosures were also announced.  United Way of Southeastern Michigan will receive $1.2 million to help fund its "211" family crisis telephone hotline.  The "211" hotline provides thousands of people help with mortgage foreclosures, utility payments, health care, and tax preparation, taking 22,518 calls in January 2009 alone.  Nearly 62% of these callers earned less than $10,000.

    Cox also announced grants of $250,000 each for the City of Detroit and local charity Focus: HOPE to assist their efforts to boost neighborhoods hit hard by empty and distressed houses that further erode the value of surrounding homes and encourage crime.

    Additionally, Cox announced the scheduling of several Avoid Foreclosure Forums around the state, including an April 28 event at Ford Field.  The last Avoid Foreclosure Forum, held at Cobo Center, helped 4,500 area residents sit down face-to-face with mortgage lenders, HUD-approved non-profit financial counselors and state officials in an effort to help families keep their homes during these difficult economic times. 

    "With Michigan ranked sixth nationally in the number of home foreclosures, it is clear more must be done to help people stay in their homes" said Cox.  "By giving anxious homeowners a chance to meet with experts face-to-face, hopefully we can make a difference."  

    Focus: HOPE Co-founder Eleanor Josaitis and CEO William Jones both expressed concern about the negative effects of rapid neighborhood decline caused by the foreclosure crisis.

     "Home foreclosures are devastating to families ? especially children whose sense of security is forever altered," said Josaitis.  "I see all these empty homes and worry about what is happening to our community.  Why can't we help people stay in their homes and tear down the abandoned ones to create safe neighborhoods for our children and safe pathways to school?  Our children deserve better.  Focus: HOPE is doing what it can to help rebuild our community and this money will be a huge boost to those efforts."

    "Foreclosed homes only add to the problems in our neighborhood where empty houses become havens for illegal activities that threaten the safety and security of nearby residents," said Jones.  "We will use the proceeds from this settlement to further our neighborhood revitalization efforts as we work with residents, businesses and others to build a community that is welcoming to families and to our senior citizens. We will also expand our efforts to help educate our colleagues and students about resources available to prevent homeowners from slipping into foreclosure."

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