The MN Home Ownership Center is pleased to have worked with ECHO (Emergency, Community and Health Outreach), the Minnesota Community Foundation and the Saint Paul Foundation to produce a new television program for Minnesotans with limited English proficiency about the resources available in Minnesota to obtain affordable housing.
The most recent legislative session here in Minnesta has provided some interesting updates on consumer protections regarding housing and foreclosures. Here's a quick recap:
SF2430 was signed by the governor and takes effect August 1, 2010. In addition to several reverse mortgage regulations, this bill modifies the Foreclosure Advice Notice given to homeowners in tandem with the Sheriff’s Sale notice.
The new notice includes:
significantly more information about the redemption period, including what happens after the sale, how to find out how much the home sold for at sale,
information about watching out for scams, and
advice that you can also try to sell your house during redemption.
It still includes the Center’s name as a contact for advice from foreclosure prevention counselors, and adds the US HUD website for locating counselors as well.
In addition to the newly worded Foreclosure Advice Notice, the bill restricts anyone attempting to acquire title directly from the homeowner after the sale by making sure they personally deliver specific information about the results of the foreclosure sale and redemption period rights 3-days before entering any agreement to acquire the title. They must now provide:
the date of sale,
several paragraphs of information about how to redeem,
Notice that the homeowner doesn't have to move,
Notice that the homeowner still retains the right to try and sell the property, and
who to contact for advice (an attorney or a foreclosure counselor through Center or HUD).
The restrictions are intended to limit scams during the redemption period and do have consequences for non-compliance (damages, costs and fees). This section doesn’t apply to title transfers conducted by licensed real estate agents, government, nonprofit lenders, or a Deed-In-Lieu of Foreclosure through the foreclosing lender. This section of the bill expires December 31, 2012.
HF2668 was also signed by the governor and updates several tenants rights and notices. As it relates to tenants in a foreclosed property, for any evictions taking place prior to December 31, 2012 tenants must receive a 90 day notice to vacate after the end of the redemption period. If the lease term goes beyond the end of redemption, the renter can stay until the end of the lease (with an ADDITIONAL 90 day notice to leave at the end of the lease term). The one exception for allowing tenants to stay until the end of the lease would be if the successor (new owner, who purchased the home at the Sheriff's Sale) plans to occupy the house as their primary residence.
Minneapolis Entry Cost / Down Payment & Affordable Loan Product Training Thursday, June 10th, 2010
The MN Home Ownership Center, in partnership with the Minnesota Association of Realtors®, the City of Minneapolis, Freddie Mac and LiveMSP, is hosting a training on the recently developed tools offering comprehensive information about entry cost (down payment) and affordable loan programs available to buyers in the City of Minneapolis.
As Minnesota begins to recover from the recent foreclosure crisis, municipalities, lenders, non-profits, and others have developed programs designed to promote homeownership. This proliferation of programs has led to confusion among industry professionals asthey attempt to keep current on optimum opportunities for their clients.
Two sessions are available, and each 90-minute session will include:
Details about accessing and using the MN Home Ownership Center’s Entry Cost Assistance Matrix, including a panel of speakers highlighting some of the most frequently used programs. The Neighborhood Stabilization Program will be featured.
Information about accessing and using the MN Home Ownership Center’s Affordable Loan Product Matrix. Recently released to the public for the first time, the matrix includes valuable information about first-time homebuyer and other affordable loan programs. Lending representatives will be on hand to discuss their programs.
BEST OF ALL - - THIS TRAINING IS FREE! And CEU Credits have been applied for.
Space is limited and registration is required. You can learn more and register online here.
TWO SESSIONS OF THIS TRAINING ARE AVAILABLE: (The same information is repeated in both sessions)
MN Compass has recently released a ton of great demographic information about foreign-born populations in Minnesota. The data includes information on age, length of time in the US, income and, especially important to the work we do here at the MN Home Ownership Center, information on rental and homeownership rates.
Below you can see data that we’ve consolidated from MN Compass on the homeownership rates among Minnesota’s immigrant groups. We’ve sorted the list by size (population number).
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Interestingly… every one of the groups saw gains in their homeownership rate from 2000 through 2008. Some of these gains are significant. Although the Liberian population is relatively small in Minnesota, they saw a 50% increase in their homeownership rate. The Mexican population, Minnesota’s largest foreign-born group, saw an increase of close to 30%.
It will certainly be interesting to see how/if the homeownership rates change after this year’s census.
The Minnesota Homeownership Center’s goal is SUCCESSFUL homeownership. If you’re thinking of buying your first home… especially if you are new to the process in the U.S. or might prefer assistance in your native language, the Center is here to help. Workshops for first-time buyers are available in more than 5 different languages throughout the state and counselors can work with interpreters in ANY language. If you’d like to learn more, visit our website here.
Is it possible to stop being a homeowner… and become a renter of your EXISTING home? As strange as it sounds, this might just be possible with Fannie Mae’s “Deed for Lease” Program. This may allow you to be able to stay in your current property for awhile and avoid the disruption of moving your family.
The current program offers a lease of NO MORE than 12 months, at current market rental rates. If current rental rates are about the same as, or even higher than your current monthly mortgage, this program probably won’t help. The program is ONLY available for properties with mortgages backed by Fannie Mae. To see if Fannie Mae is the investor (backs) your mortgage, click here.
While the program has been around since November 2009… many people didn’t qualify becuase they had junior liens (second or third liens) on their property. Given the changes announced at the beginning of April with the new HAFA program… even homeowners with junior liens may now qualify for the ‘Deed for Lease’ program.
There are actually TWO steps that homeowners with Fannie Mae loans must ‘qualify’ for in order to be able to participate in the program.
1. First, you must sign over the deed (title) of your home in what is known as ‘Deed-in-Lieu’ of foreclosure. You have to qualify (apply) for this with your current lender… you can’t just sign over your deed and mail it back to them.
2. If your lender agrees to a Deed-in-Lieu, then you must sign-up for the “Deed-for-lease” program. There is a $75.00 per unit lease application fee as well.
The ‘Deed-For-Lease’ program is one of the few options available to avoid foreclosure for investor-owned properties… as the investor/owner can agree to a deed-in-lieu of foreclosure and their tenants can apply for the Deed-for-Lease program.
For your property to be eligible:
The property must be livable (qualify for a certificate of occupancy according to CURRENT local rules, codes). Repairs might be necessary to qualify or to bring the property into compliance – the program does allow for 30 days to bring it into compliance.
The property cannot be the focus (or participate in) any corporate, government or community neighborhood stabilization plan.
The property will be inspected, and an independent inspection report agrees that you have kept the property in good condition.
The market rental income must cover ongoing maintenance and management costs.
If the property is part of a homeowner's association, it must allow rental properties.
For you or your tenant to be eligible:
The market-rate rent on the property must be less than 31% of your gross income (unemployment income counts).
The number of occupants must be in compliance with local laws and homeowner association rules.
Occupants signing the lease must agree to a credit review and all occupants over age 18 must have a background check.
No sign or reports of illegal activities conducted at the property.
The property will be use for a personal residence.
As long as your property is eligible, you will be assigned to a property manager who will do the inspection and manage the property once you are accepted into the program.
The property manager will meet with you within 10 days of filing your application to the “Deed for Lease” program. At the meeting you will need to fill out a formal application and pay a $75 processing fee for the application. If it's a multi-unit property, the $75 fee will be collected for each unit. The property manager will then conduct an inspection of the property to be sure it meets local codes and regulations and that the property has been adequately maintained (see above).
The advantage to this type of program is that it allows you time to start rebuilding your credit score and allows you to free up additional funds to start paying down other debt. Currently, however, the maximum lease time is 12 months… you may only be delaying the inevitable move.
Remember... you can't just sign your Deed and mail it back to the bank. There are LOTS of steps that must be taken. Also.. BE CAREFUL. There are LOTS of for-profit and "Foreclosure Rescue" scam companies that would love to have you sign over your deed, and will leave you without a home and without recourse.
Are you interested in learning more about the Deed-For-Lease program... or other ways to avoid or prevent foreclosure in Minnesota? Contact your local FREE (non-profit) Housing Counseling agency today to explore your options.
As regular readers know, the MN Home Ownership Center coordinates the statewide network of home ownership education and counseling organizations. (Pre-purchase education and counseling, foreclosure prevention services, post-purchase education and counseling, reverse mortgage services, etc.)
For years, we've simply referred to this network as "The Network" or "The Statewide Network of Housing Counseling and Education Organzations". Neither of these are very descriptive... or easy to say, for that matter.
CALLING ALL CREATIVE TYPES!! The Center is seeking creative and innovative ideas for a name to bring recognition to the Center’s network of home ownership education and counseling organizations. Something that can be branded and easily understood by MN homeowners and future homeowners!
Submit your ideas to win prizes, contribute to successful homeownership in Minnesota, and win our eternal gratitude. Fame and fortune await! (OK... maybe I'm exagerating a bit). Let your creative juices flow and send your suggestions to: email@example.com or in the comment section below.
For more information about the contest and what we're looking for, click here. (PDF)
To learn more about the Center and its network partners, click here.
The Center has compiled the pre-foreclosure notice counts for the First Quarter of 2010 and the news is NOT GOOD!
Q1 of 2010 is the highest quarter on record:
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Here are the statewide numbers for the first quarter of 2010... with a chart comparing year-over-year to the same time period in 2010:
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While not as pronounced as the statewide numbers, a similar increase can be seen in the Twin Cities Metro Area numbers:
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Here's how the different counties have fared so far in 2010:
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To compare these monthly numbers to the same time period last year... you can see our year-end wrap-up numbers here.
These increases certainly don't bode well for the number of foreclosures that we'll see in Minnesota in 2010!
As background for new readers, Minnesota State law (MN Statute 580.021) requires that the foreclosing party provide information regarding foreclosure prevention counseling services to the mortgager (homeowner) AND provide the homeowner’s name, address, and most recent known telephone number to an approved foreclosure prevention counseling agency - BEFORE filing the notice of pendency.
Once The Minnesota Home Ownership Center's network of foreclosure prevention agencies recieves notification from the lender/servicer/homeowners association, they then contact the homeowner, and track the number of notifications received during the month in their monthly reporting to the Center.