Mary Townley, the director of the Michigan State Housing Development Authority, holds a pretty difficult job. But it seems she’s pretty good at it.

Michigan is one of the states participating in the “Hardest Hit Program,” which provides $7.6 billion for Housing Finance Authorities to design and implement programs to help their state’s citizens prevent avoidable foreclosure.

As Townley points out in a piece published Wednesday on the Treasury’s website, the government allowed each state to craft their own program to fit their own “unique home foreclosure needs.” 

This seems to have been a success in Michigan.

She said that under the program, the number of homeowners served increased 40% and the number of dollars spent increased 50% in the fourth quarter of 2011. These increases translate to impressive numbers: Nearly 98% of Michigan Hardest Hit Fund's participants maintained homeownership six months after beginning the program, and almost 97% were still homeowners after a year. 

All of this is part of a larger trend in Michigan, where foreclosures declined 24% in 2011 from 2010, and these programs go a long way in producing such a decline. 

The first thought that comes to the minds of many – including myself – when it concerns government-sponsored programs shelling out this kind of money is “What a waste.” But in this case, I’m compelled to throw out that train of thought.

Point is, programs that take into account the specific needs of the state will always be more effective than blanket solutions for the entire country.

To be sure, Michigan foreclosures are still extremely high. According to RealtyTrac, 1 in every 433 properties in Michigan was in foreclosure in February. The national average was 1 in every 637. But the numbers have been declining, just as Townley reports.

It is hopeful that the Treasury allows the states such flexibility in how the money is spent. Like so many hard hit states pointed out in recent months: Foreclosures in every state are different and national programs do little good in the hardest hit markets. Michigan’s market is certainly one of those. 

Perhaps programs like these, if continued and steadily funded, will push Michigan’s numbers down over the next several years.