Attorney General Bill Schuette recommended that the Legislature create the Homeowner Protection Fund to ensure Michigan families, children and veterans affected by the foreclosure crisis receive the maximum benefit from the $97 million in settlement funds that will be paid directly to the State of Michigan. The fund directs the monies to the following nine initiatives:
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 for victims of foreclosure scams. Eligibility criteria to determine qualifying cases will be established at a later date.
Assistance for Veterans - $5 million. The men and women who served our country also have been affected by poor mortgage servicing and foreclosure practices. These funds will provide targeted relief for military servicemembers.
Michigan Attorney General Home Protection Unit - $6 million. These funds will allow Schuette's office to ramp up investigation and prosecution of foreclosure-related crimes. This unit has brought charges in 28 cases since 2009 and there are approximately 66 cases currently under investigation. These funds will allow for additional investigators and prosecutors to combat foreclosure related crimes.
Blight Elimination - $25 million. These funds will be dedicated to blight elimination efforts throughout Michigan. $10 million will be allocated 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 will use these funds to expand their much-needed, free homeowner counseling services, including legal aid, 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 revitalizing downtown areas and neighborhoods in Michigan.
Grants to Help Homeowners Refinance - $5 million. These funds will allow The Michigan State Housing Development Authority (MSHDA) to provide Grants to help pay the closing costs of citizens who utilize the Home Affordable Refinance Program (HARP). Eligible citizens will receive assistance paying closing costs associated with refinancing their home.
Assistance to Homebuyers - $15 million. These funds assisted both servicemembers and non-service members by providing grants to offset the purchase price of a home.
Education Achievement Authority - $10 million. These funds will be used by the Education Achievement Authority (EAA) to help improve performance of Michigan's lowest performing schools.
On March 8, 2012 Attorney General Schuette testified before the Senate Banking Committee, where he outlined the need for the Homeowner Protection Fund. "You see people who have lost their homes, or who are underwater or are hanging on by their fingertips," he said. "This settlement won't solve every problem, but it's a step in the right direction."
Assistant Attorney General Scott Teter testified on Schuette's behalf before the House Banking and Financial Services Committee on Wednesday, April 18, 2012.