Wednesday, March 20, 2013

Foreclosure Counseling Has Saved Minnesota Billions of Dollars

26,000 homeowners avoid foreclosure thanks to Homeownership Advisors Network since 2008

The Minnesota Homeownership Center has released its Foreclosure Counseling report for 2012.  

This report provides a summary of demographic and outcome data from the foreclosure prevention counseling program provided by the Center's Homeownership Advisors Network.

Almost 6,000 Minnesota households availed themselves of free foreclosure prevention services last year, bringing the total to almost 70,000 households since the crisis began.  

Most importantly, more than 26,000 households successfully avoided foreclosure on their home since 2008.

According to the Joint Economic Committee of the U.S. Congress, the average cost of a single foreclosure is $78,000:

  • $50,000 – Lenders (recent Standard & Poor’s study breaks this down)
  • $19,227 - Local government – shrinking tax base, property maintenance, utility cancellations, policing.
  • $1,508 - Neighbors – (decrease in home value, home is harder to sell or refinance.)
  • $7,200 - Homeowner – (loss of equity, moving expenses, legal fees, etc.)

This means that, thanks to the extraordinary efforts of the Center’s Homeownership Advisors network… foreclosure counseling has saved Minnesota (lenders, municipalities and communities) over $2 Billion. 

Even more extraordinary is the fact that, according to our most recent cost survey, conducted by the Federal Reserve Bank of Minneapolis, foreclosure counseling costs, on average, just $400 per household.

To view the full report, visit the Center's website, here:

Foreclosure Prevention Starts Before the Mortgage Is Even Signed

Homebuyer education dramatically decreases probability of delinquency 

New research from NeighborWorks America conducted by Neil Mayer & Associates and the credit bureau Experian finds that homeowners that receive pre-purchase education and counseling services, like those offered by the Homeownership Advisors Network in Minnesota, are 30% less likely to become seriously delinquent on their mortgage in the first two years after closing.

The study looked at over 75,000 mortgages originated between 2007 and 2009 to see the effect pre-purchase education and counseling services had on the probability of a loan becoming seriously delinquent in the first 24 months:

The research shows that the investment the Minnesota Homeownership Center has made in homebuyer services over the last 20 years helped lessen the effects of the foreclosure crisis on Minnesota.

In the last ten years alone, almost 50,000 households have graduated from Home Stretch.  Thanks to the knowledge they received in Home Stretch, hundreds of homeowners avoided falling seriously delinquent on their mortgage.  For more information on Home Stretch, check out our most recent Homebuyer Services report, here.

NOW... Minnesota homebuyers have the option of completing this important workshop in person (Home Stretch) or ONLINE via Framework.    Framework is a high quality, interactive way to learn how to be a smart, confident and successful homeowner, FRAMEWORK™ provides the facts you need to become well-informed about every step in the process.

In addition, the Bipartisan Policy Center’s Housing Commission recently reiterated the important value of quality housing counseling.  According to the report, Housing America’s Future, ‘…housing counseling can improve prospective borrowers’ access to affordable, prudent mortgage loans, especially for families that otherwise might not qualify or who may experience other barriers to mainstream lending.’

Better access to quality loans, fewer delinquencies.
That’s why we support homebuyer services in Minnesota.

Monday, March 11, 2013

Foreclosure Prevention Counseling in Minnesota

The Minnesota Homeownership Center has released its Foreclosure Counseling report for 2012.  

This report provides a summary of findings from an evaluation of the foreclosure prevention counseling program provided by the Center's Homeownership Advisors Network. 

In Minnesota, local, free foreclosure counseling services are provided to ANY homeowner through a network of about 25 different non-profits, governmental, tribal and social service agencies throughout the state.

The report summarizes household and loan characteristics, service usage, and outcomes for homeowners receiving foreclosure counseling during the past twelve months. 

The complete report is available online at the Center's website, here.

Here are a few highlights from the report:

5,947 households received foreclosure counseling services in 2012, 

a decrease of 41% from 2011.  

47% of households receiving counseling services in 2012 
were able to avoid foreclosure.  

3 out of 5 households had mortgage payments that 
were more than 30% of their income 
(the traditional benchmark of mortgage affordability).

More than half of households served fell behind in their mortgage 
due to a loss or reduction in income.

If you, or someone you know, is struggling with to keep up with their mortgage payments, or is worried about a FUTURE payment... don't delay, contact a Homeownership Advisor that specializes in foreclosure today!  To learn more, or to contact your local organization, click here.