March 19, 2009

LANSING - 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.    

"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 foreclosures."

Cox said 3,697 Michigan residents who received sub-prime and pay-option ARM loans between January 1, 2004 and December 31, 2008, but 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 at a later date regarding their payment. 

In addition to direct payments to former Countrywide loan holders, Cox also announced two broader efforts to help families and local governments fight the next wave of foreclosures. 

First, Cox announced a $250,000 grant to the City of Flint to assist its efforts in stabilizing neighborhoods hit hard by foreclosures.  These funds may be used to maintain, purchase or tear down distressed properties that are eroding the value of surrounding homes and encouraging crime. 

Second, Cox announced the scheduling of an Avoid Foreclosure Forum in Saginaw on April 29, at The Verizon Event Center.  A previous round of forums helped nearly 10,000 Michigan 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 in the Tri-City region, hopefully we can make a difference."

Cox has also announced grants for other parts of the state, and will be announcing additional grants in the near future.  

City of Flint Mayor Michael K. Brown welcomed the grant and said it would benefit the City of Flint.

"Solid neighborhoods are vital for any city to thrive," said Brown. "We look forward to leveraging these funds to further our Neighborhood Stabilization efforts."

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