Michigan's Attorney General and head of a new state agency for veterans said Tuesday that $5 million in grants will be available to help military service members and veterans struggling to keep their homes as a result of the mortgage foreclosure crisis.
Attorney General Bill Schuette and the Director of the Michigan Veterans Affairs Agency Jeff Barnes launched the Michigan Veterans Homeowners Assistance Program, which will provide money for military service members and veterans who are currently at risk of losing, or who have lost, their homes to foreclosure since 2006.
The grants will be awarded on a first-come, first-served basis until the money runs out and can be used in a variety of ways, like curing a default, providing a loan modification or refinancing a mortgage. Grants will be sent directly to the vendors, like the lenders or government entities.
All active and reserve military service members are eligible as well as Air and National Guard, honorably discharged veterans and surviving spouses of Michigan service members who had a combat-related death.
Barnes said foreclosure not only puts military service members out of their homes but also can have long-term ramifications for their careers. A service member's security clearance can be impacted because they went into foreclosure, which means jobs in homeland security and law enforcement automatically are off the table when they leave the military, he said.
The program is being paid for out of the $97 million Michigan received last year as part of a settlement with big banks accused of questionable foreclosure practices during the housing crisis. That money also is being used for blight elimination and foreclosure counseling programs as well as measures to fight restitution scams.
The state currently runs a grant program to help war-time veterans who are struggling financially, but this will be expanded to apply to all veterans as well as active military members, said Anne Marie Dutcher, administrator of the Michigan Veterans Trust Fund, which will be overseeing the new program.
She said they expect thousands of people will be assisted by the program and estimated the $5 million will last at least two years.