Thursday, January 19, 2012

Preforeclosure Notices Continue to Decline in Minnesota

On  Thursday, January 19th, the Minnesota Homeownership Center released its year-end data on the aggregate number of Preforeclosure Notices received by foreclosure counselors in the Homeownership Advisors Network.  The numbers continue to indicate that Minnesota is slowly emerging from the foreclosure crisis.  

In the fourth quarter of 2011, members of the Homeownership Advisors Network received 12,016 preforeclosure notices, 30% fewer than during the same time period in 2010, reaching the lowest level reported since the state legislature required the notices in late 2008:

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On a yearly basis, Minnesota households received 24% fewer preforeclosure notices in 2011 than they did in 2010.  

Most encouraging is that the fact that the numbers of preforeclosure notices received is down in every county in the Metro area.  In addition, every agency in the Homeownership Advisors Network reported receiving fewer notices in the fourth quarter of 2011 than in the third, AND reported receiving fewer notices in the fourth quarter of 2011 compared to the same period in 2010.

While these numbers are encouraging, we shouldn’t lose sight of the fact that they still show that more 54,500 households continued to struggle with delinquent mortgages in 2011:

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Here's the breakdown for the number of preforeclosure notices received by members of the Homeownership Advisors Network in the 7-county metro area:

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As background, Minnesota state law (MN Statute 580.021) requires that the foreclosing party provide information regarding foreclosure prevention counseling services to the mortgagor (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 Homeownership Center's network of foreclosure counselors receives 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.

If you or someone you know is struggling with their mortgage payment, new programs, resources and assistance are becoming available all the time. Don’t give up… contact a foreclosure counselor that is a member of the Homeownership Advisors Network today to see if there’s help available for you to avoid foreclosure. Even if you’re not yet behind, now is the time to call. To find your local foreclosure counselor, click here.

Wednesday, January 11, 2012

Freddie Mac Announces Expansion of Mortgage Relief Program

Earlier this week, mortgage giant Freddie Mac announced an expansion of its mortgage forbearance program to assist borrowers who are experiencing a financial hardship due to unemployment.

A forbearance is an agreement on the part of the lender or investor to withhold their claim to foreclose on a property - an agreement not to foreclosure for a set period of time.

According to Freddie Mac, their servicers can now offer eligible borrowers a short-term unemployment forbearance period of up to six months plus the possibility of an extended unemployment forbearance period if they remain unemployed for more than six months.  (The six-month forbearance period is 'renewable' for a second six-month period, not to exceed a maximum of 12 months.)  Under previous guidelines, the maximum period was six months.

In addition, this expanded program is now available for unemployed homeowners that are already performing under a HAMP or other loan modification program.  If they continue to be eligible for HAMP or another loan modification program, they will be re-evaluated at the end of the forbearance period.

Freddie Mac has outlined some basic eligibility criteria for borrowers (the full criteria are available in their Single-Family Seller/Servicer Guide (Guide) Sections A65.26 through A65.28, here) that include:

  • Borrower must currently be experiencing an an unemployment hardship;
  • Borrower's current monthly housing expense-to-income ratio (excluding unemployment benefits) must be greater than 31%;
  • Borrower's cash reserves cannot exceed 12 months of their monthly housing expense;
  • Only a borrower's primary residence is eligible. Second homes and investment properties are ineligible.
  • The property cannot be vacant, condemned, or abandoned.

Effective Date

Freddie Mac has strongly encouraged its servicers to begin offering eligible borrowers the unemployment forbearance relief options as soon as possible, but are required to begin offering unemployment forbearance to eligible borrowers no later than February 1, 2012. 

Are you struggling with you mortgage and like to know if an unemployment forbearance - - or other solution - - is right for you?  In Minnesota, the non-profit housing counselors in the Homeownership Advisors Network are available to meet with you FOR FREE to help you with your options to avoid foreclosure.  To find your closest counselor, visit the Minnesota Homeownership Center's website here.

Friday, January 6, 2012

Financial Assistance For Homeowners Displaced By Foreclosure

Due to the success of a pilot program initiated in late 2009 and the generous support of the Otto Bremer and Target Foundations, the Minnesota Homeownership Center announces the availability of financial grants of up to $2,500 to help cover the costs of moving to alternative housing after a foreclosure.  The goal of the grants is to assist Minnesota homeowners with the difficult transition from homeownership back into a rental situation, and to prevent homeowners that were unable to prevent the foreclosure of their home from becoming homeless.

The counselors of the Homeownership Advisors Network (housing counselors) are AMAZING at the work they do to keep homeowners in their homes whenever possible.  However,  foreclosure is inevitable for some families... and these grants allow the members of the network to keep a difficult situation from becoming a tragic one.

Currently, these grants, known as Re-Housing Grants, are only available to qualified homeowners in the City of Saint Paul and Dakota & Washington Counties.  Interested homeowners should contact the Minnesota Homeownership Center for information on how to connect with a member of the Homeownership Advisors Network that is participating in the program.  Teams established by these non-profit counseling agencies will help homeowners determine if they are eligible for one of these grants based on established criteria:

  • The applicant has not previously received a grant from this or a similar program.
  • The Foreclosure Sale has occurred and retaining ownership is unlikely and relocation is needed.
  • limited income and/or excessive but necessary expenses have prohibited the homeowner from saving enough money to secure alternative housing.
  • The full monthly rent payment in the alternative housing will be affordable, long-term, for the applicant.

Homeowners who are interested in learning more are encouraged to contact the Minnesota Homeownership Center at 651-659-9336 or by visiting

UDPATE:  Funding is available for the ENTIRE SEVEN COUNTY METRO!  (Anoka, Carver, Dakota, Hennepin, Ramsey, Scott and Washington Counties).  For information on who to contact, the Center has established a page on their website, here: