MSU Extension offers help for struggling homeowners

By: April Lehmbeck | C&G Newspapers | Published June 15, 2011

There are still plenty of homeowners struggling to keep their homes amid rising costs on items like food and gas, and they are looking for help.

From foreclosure prevention to simple budgeting techniques, they can turn to Michigan State University Extension for some of that guidance.

MSU Extension offers programs to help people make tough budgetary decisions and find the help they need on ways to fix their financial situations.

“It’s good for people,” said Terry Gibb of MSU Extension about the programs that homeowners can take part in. “We’re finding more and more people are worried, but they’re not behind (on mortgage payments) yet, which is great because we have more and more time to work with them.

“The earlier the better,” Gibb said, adding that there are documents like bills that people need to bring with them. But finding all that paperwork can take time, especially for those who pay everything online or toss their bills after they’re paid, she said.

MSU Extension hosts multiple programs in the area, including several meetings a month for homeowners who are facing foreclosure and looking for information. Then, those who attend can set up appointments to meet with counselors to discuss their particular situations.

“We usually try to do one in the morning, one in the afternoon and one in the evening,” Gibb said of the help for struggling homeowners sessions.

These programs are free to participants because MSU Extension is working through the Michigan State Housing Development Authority (MSHDA), but those interested in attending need to pre-register with MSU Extension.

MSU Extension has been educating people about foreclosures for the last four years.

“We’ve got excellent counselors,” Gibb said. “I can’t say enough about them. They don’t leave any stone unturned.”

For some, the answer is setting up a budget to make sure their house payments are paid on time, but others discover that they really do need to give their house up and move on.

“Our goal is not necessarily to do anything we can to keep people in their homes,” Gibb said. “It’s to help them make decisions, so they come out financially stable. That’s our goal, is to have you financially stable and moving forward.”

If the response from those who have sought out their help is the barometer, their work with the community seems to be making a difference.

“We get good feedback,” Gibb said. “We’ve gotten some really nice letters.”

This isn’t the only program MSU Extension runs that can help people financially. There’s also an eight-week money management course, which can help people budget better for all their bills. Then there’s a course on credit and how people can manage their credit.

“We have a lot of financial literacy programs,” Gibb said.

That’s important since people don’t generally learn about managing their financial lives when they’re in school.

“We’re trying to do what we can to catch people up a bit,” Gibb said.

For instance, she noted, some people are making grave errors in trying to save homes that maybe shouldn’t be saved by draining their retirement accounts.

“If you’re using your retirement to pay your mortgage, stop,” Gibb said, adding that some people still end up losing their home and have no retirement funds left.

There’s a program for those who are not yet homeowners but are looking to buy their first homes, as well.

“We do have people that are looking to purchase homes,” Gibb said, adding that the extension educates them on the process of buying a home and whether they’re ready to make that leap.

They learn about everything that goes into homeownership, including maintenance issues and costs.

And here’s some good news: Seventy percent of the loan modifications that are accomplished after homeowners deal with the MSU Extension are working out, Gibb said.

“That’s the whole point, is to help people,” she said.

Many people who may be struggling don’t realize everything that’s available to them, Gibb said.

Rob LaPerre, president of Great Lakes Mortgage Funding, said that there are options for people looking to refinance their homes to get a lower interest rate and help with affordability, even if they’re underwater.

“If you are underwater, there are programs, and we’ve done them,” LaPerre said.

For instance, if the home is a Fannie Mae or Freddie Mac loan, which isn’t always apparent based on who is servicing the loan, a mortgage can sometimes be refinanced for up to 125 percent of the value, according to LaPerre.

Also, there are still people who have refinanced and gotten some equity out of their property if they’re not underwater, which some may not realize is still an option.

There have been some stumbling blocks, however, such as changes to Federal Housing Administration loans that require higher mortgage insurance payments per month in exchange for taking less up front, which could prevent some people from getting a better monthly payment despite a drop in the interest rate, LaPerre cautioned.

“FHA has automatically kind of taken themselves out of the market to do these streamline refinances,” LaPerre said.

LaPerre is seeing some good trends in the housing industry, however, that could point to things getting better, such as multiple offers on good properties and even construction loans.

“People are actually starting to build again,” he said. “It’s definitely a good sign. We just need people to get jobs, more jobs.

“You’re always going to have foreclosures,” he added. “I would think that we’re through the worst of it and slowly trying to climb our way out.”

For more information on Macomb County MSU Extension’s foreclosure help, call (586) 469-6430. For other courses like money management and new homeowner information, call (586) 469-7614.