As the number of regular residences and mobile home foreclosures continues to increase, Michigan authorities are stepping up their campaign for improved participation in federal foreclosure mitigation programs among the state's biggest lenders. However, despite criticisms from Governor Jennifer Granholm, banks like Citi, Chase, Bank of America and Wells Fargo have delayed their commitment to the Hardest Hit Fund initiative.
The state has some of the highest foreclosure rates nationwide, with foreclosed homes for sale in Dearborn, MI and in other cities in the area continuing to post increasing numbers. In an effort to subdue the foreclosure problem, the state has sought the participation of big banks in the housing program designed to help troubled homeowners.
According to some of the biggest banks in the state, they are still in the process of reviewing the initiative, which means that while the review is ongoing, their customers who are facing the possibility of having their properties end up as Michigan foreclosed homes cannot sign up for the program.
Among state homeowners who are facing regular housing and mobile home foreclosures problems, 150 are enrolled in the Hardest Hit Fund initiative supported by a $282 million fund. Since big banks are not participating yet, these borrowers are getting help from credit unions and small banks.
Officials from major banks in the area have claimed that big lenders' participation in the initiative designed to lower the number of real estate foreclosed homes in the state might take some time since their institutions require more effort in terms of adapting to new programs. With lack of participation from big-name lenders, the housing program meant to aid 30,000 borrowers in the state has so far only assisted 150 homeowners.
Big bank officials have also added that regional lenders and banks are able to move quickly to implement such programs in a single state or within a limited number of regions, but big financial institutions such as Chase and Bank of America would need to implement a program like Hardest Hit Fund in various states with specific parameters for each area.
They added that the challenges facing big banks in terms of implementing programs meant to lower the number of regular home and mobile home foreclosures are different from those faced by regional and smaller financial institutions.