WASHINGTON (11/21/08)--The Michigan Credit Union League (MCUL) is leveraging a $43,828 Innovation Grant from the National Credit Union Foundation (NCUF) into a multi-media foreclosure prevention campaign. Michigan has the third-highest foreclosure rate in the U.S. “Michigan's economy faces a unique combination of challenges due to auto employee layoffs, high unemployment, and rapidly decreasing housing values,” said MCUL President Dave Adams. “Many residents in danger of foreclosure hold subprime mortgages with little or no equity and high interest rates,” he added. “Because they have not built significant savings and assets, low-wealth families are struggling to pay their mortgages and retain their homes.” Beth Troost was hired in February as the league’s first financial education coordinator. Many credit unions are responding to this crisis by providing financial education seminars and individual counseling, she said. But Troost pointed out that “credit unions are frustrated with the small numbers of people they are reaching. While the foreclosure problem is predicted to affect an abnormally large portion of the population for the next three to five years, the number of consumers reached by seminars and counseling is comparatively low.” She offered several reasons: “Many people experiencing challenges that affect their mortgage payments may wish to remain anonymous and are unwilling to attend public seminars. Other reasons for low attendance may be time conflicts, location challenges, and lack of awareness.” Unfortunately, Troost said, there is an “abundance of misleading and fraudulent foreclosure avoidance information” circulated by for-profit interests in many communities. “Community members need a convenient avenue to get trustworthy information and resources to enable them to improve their financial situation and avoid foreclosure,” she added. MCUL will partner with credit unions, Michigan State University (MSU) Extension, and United Way to produce and distribute an educational video, 8,000 DVDs, and online resources to reach more Michigan homeowners. The video will focus on:
* Understanding why consumers struggle to make housing payments; * Implementing money management techniques--such as keeping track of spending, creating spending plans, and prioritizing debt; * Retaining homeownership if current payments cannot be made (by modifying loans, attending housing counseling, and/or applying for reverse mortgages); and * Relinquishing homeownership if necessary but without foreclosing.
“More credit unions than ever are investing in the Community Investment Fund,” said NCUF Executive Director Steve Delfin. “Yet here's the paradox--even though CIF balances reached an all-time high, the fund has returned a much lower percentage of grant dollars in 2008. This is due to federal interest rate cuts from January through October. “So especially during these challenging economic times, we thank all 650-plus CIF investors, the NCUF Board and Grants Committee for allowing us to maintain our $600,000 in Innovation Grant commitments and reward credit unions serving low-wealth households,” he added.