Monday, January 24, 2011

NEO: The Matrices Have Been Updated

The Minnesota Home Ownership Center strives to provide information and resources that will assist Minnesotans begin, and maintain, home ownership. 

In November of 2009 we introduced our "Entry Cost Assistance Matrix" that outlines the down payment programs, closing costs assistance and other funds available to first-time buyers in Minnesota. We've now updated the Matrix for the first quarter of 2011! To view the most recent version of the matrix, click here.

The Matrix is organized geographically, which allows readers to quickly find the area of the state that they are most interested in.

As a quick reminder, funding for down-payment assistance and entry-cost help is FLUID. The information may change. Please contact a program administrator to see if funds are available, and, if not, if there is a waiting list that you or your client can use to access funds in the future.

In addition, the Center has also updated its "Affordable Loan Product matrix".   The Affordable Loan Product Matrix is designed to inform housing counselors and industry professionals of affordable mortgage loans and programs available to their clients.

Home ownership is expensive and first-time buyers should never base their home-buying decision on a down-payment program or access to a specific mortgage. There are MANY other factors when deciding whether home ownership is right for YOU or not. Before purchasing YOUR first home... take a Home Stretch Workshop (pre-purchase education workshop) to learn what's involved, and speak with a non-profit Housing Counselor to see if you might qualify for any down-payment assistance or other first-time buyer programs. For more information, click here.

Thursday, January 20, 2011

Pre-Foreclosure Notices Increase 8% in 2010

The Minnesota Home Ownership Center has compiled the pre-foreclosure notices received by the Homeownership Advisors Network (statewide network of housing counseling agencies) through the end of 2010 and the numbers continue to show that Minnesota households are struggling with mortgage payments even as other signs point to an overall improved economy.

For the year, the number of pre-foreclosure notices issued by foreclosing entities statewide increased 8% (Eight Percent) in 2010 over 2009, from 66,570 to 71,665. In the Twin Cities metro area, the number of notices received increased by 1,334, a 3% increase over 2009.

Homeowners in Greater Minnesota seem to be struggling more, as the number of pre-foreclosure notices issued increased FIFTEEN PERCENT. 3,761 more households received notice in 2010 (28,522) than in 2009 (24,761).

On a brighter note, the rate of increase has slowed and in the Twin Cities the trend has almost leveled off. Whether this signals a possible decline in pre-foreclosure notices to be received in 2011 remains to be seen.

Minnesota households received a total of 71,665 notices in 2010:

(Click To Enlarge)

Here's the breakdown for the number of pre-foreclosure notices received by members of the Homeownership Advisors Network in the 7-County Metro Area:

(Click To Enlarge)

However, the rate of increase appears to be slowing, especially in the Twin Cities Metro:

(Click To Enlarge)

(Click To Enlarge)

The overall numbers make it hard to forecast anything but continued foreclosure activity and continued struggles for Minnesota families.

Minnesota State law (MN Statute 580.021) requires that the foreclosing party provide information regarding foreclosure prevention counseling services to the mortgagee (homeowner) AND provide the homeowner’s name, address, and most recent known telephone number to an approved member of the Homeownership Advisors Network- BEFORE filing the notice of pendency.

As always... if you, or someone you know, is struggling with your mortgage payments - or think you might fall behind soon - don't wait! There is a network of non-profit agencies that can help. Contact them today. For additional information about foreclosure prevention in Minnesota - visit the Center's foreclosure prevention resource page here.

Thursday, January 6, 2011

Mortgage Success: Does the Bank Matter?

New study from Ohio State University finds banking locally can impact mortgage success.

Researchers from the John Glenn School of Public Affairs at Ohio State University have found that low-income homeowners who received a mortgage from a local lender were less likely to default on their loans than those homeowners who borrowed from a more distant bank or mortgage company, even when these borrowers received the same type of mortgage product.
The researchers studied loan performance of more than 20,000 homebuyers who purchased homes AFTER the foreclosure crisis began (between 2005 and 2008). They examined the location of bank branches relative to where the homebuyers purchased their homes and found that higher-risk homebuyers with loans from banks with branches close to their new homes (less than 10 miles) were significantly less likely to default on their mortgages.

Can a personal relationship affect loan repayment?
As with large, non-local banks and many mortgage brokers, most local lenders base their lending decision on ‘the numbers’ like credit scores. HOWEVER, many local lenders place more weight on other factors, such as length of current employment, and whether you make regular deposits in a savings account.

“This kind of information may give a more complete picture of whether a person can really afford a mortgage, particularly for higher-risk borrowers,” said Stephanie Moulton, one of the researchers from Ohio State University.

“Some of the local bankers told me they won’t even look at a credit score until they have talked to an individual and determined if they think he or she can make the payments.”, she added.

The researchers believe that if there’s an existing business/personal relationship, the borrower may feel more obligated to make their payments, and the banks may provide more education and information to the borrowers, equipping them to be better homeowners.

The Minnesota Home Ownership Center truly believes that arming potential homebuyers with the ‘education and information’ that Moulton mentions is THE KEY to long-term successful homeownership. There is an entire chapter of the Home Stretch curriculum dedicated to helping potential homeowners navigate the mortgage loan process… including how to choose a lender and a loan product. For more information, visit the MN Home Ownership Center’s website, here.

$600k For Housing Counseling

Homeownership Advisor Network Members Receive almost $600k in HUD Grants

The Minnesota Home Ownership congratulates members of the Homeownership Advisors Network who have received over $638k in funding from the U.S. Department of Housing and Urban Development (HUD). These funds will support the delivery of a wide variety of housing counseling services to help individuals and families in Minnesota improve their access to affordable housing, expand their homeownership opportunities, and avoid foreclosure and foreclosure rescue scams.

HUD Secretary Shaun Donovan stated, “Now, more than ever, it’s crucial that we support these agencies that are working with struggling families on a one-to-one basis to manage their money, navigate the home-buying process, and secure their financial futures.”

In Minnesota, the distribution of these funds will support:

TRI-COUNTY ACTION PROGRAM, INC. (Waite Park), $35,000.00
TWIN CITIES HABITAT FOR HUMANITY (Minneapolis), $35,500.00

Over $150k of the grant awards listed above were granted as Mortgage Modification and Mortgage Scams Assistance dollars that will be used by organizations to provide homeowners information about fair lending abuses and mortgage ‘rescue’ scams. Ed Nelson, spokesman for the Minnesota Home Ownership Center stated, “These funds will go a long way to helping the counseling agencies spread the word about dangerous, and costly, foreclosure rescue scams in Minnesota.”

The Homeownership Advisors Network is the State of Minnesota’s premier network of housing counseling agencies and is supported by the Minnesota Home Ownership Center. Members of the Homeownership Advisors Network are highly trained, certified professionals that provide advice and guidance for Minnesota families as they struggle to find and maintain stable housing.

For more information about the Homeownership Advisors Network or the statewide media campaign known as “Look Before You Leap” that continues to warn Minnesota homeowners to be on the lookout for foreclosure rescue scams, visit the Minnesota Home Ownership Center’s website at

In addition to the funds listed above granted to members of the Homeownership Advisors Network, other organizations in MN also received HUD grants:

HOUSING PRESERVATION FOUNDATION (Supports National Network) $2.4mm