The “Michigan Hardest Hit program” launched today to help struggling homeowners stay current on their mortgages hit a major snag, according to the Detroit Free Press.
By 10 a.m., the state had received 30,000 calls for the first-come, first-served loan program, and later in the day the system eventually crashed.
One caller told the paper he had been on hold for four hours and 29 minutes, but still couldn’t get through.
The state-run program offers mortgage payment assistance to those receiving unemployment benefits, or to those who have fallen behind on payments due to illness or a temporary layoff.
Additionally, the state will provide principal balance reductions of up to $10,000, which will also be matched by lenders.
Borrowers must apply for the program through their mortgage lenders, but many have apparently received the run-around, forcing them to turn to the state.
Fifth Third Bank said it would participate in the lender-optional program, but other large mortgage lenders like Bank of America and Citibank have so far failed to commit.
Michigan was one of five states that received funding via the “HFA Hardest-Hit Fund,” in which $1.5 billion in TARP funds was allocated.
Housing Finance Agencies in California, Nevada, Arizona, and Florida also received funds.
The Michigan State Housing Development Authority’s (MSHDA) plan to distribute $154.5 million in federal funds, which should help more than Michigan 17,000 homeowners.
The state estimates that the money for the program will run out in 12 to 18 months, though it sounds like it could be sooner.
So far, the following lenders are on-board:
Blissfield State Bank
Century Bank and Trust
Community Central Bank
Dort Federal Credit Union
First State Bank Mortgage Company, LLC
First State Bank of East Detroit
Member First Mortgage, LLC
Michigan Catholic Credit Union
Mortgage Center LC
United Bank Mortgage Corporation