Food For Thought - Private Investor Foreclosures

Here’s some food for thought… President Obama’s Homeowner Affordability and Stability Plan, the details of which will be available next week, focuses heavily on Fannie Mae and Freddie Mac backed mortgages.

However, according to a presentation given by James Lockhart , the Director of the Federal Housing Finance Agency (FHFA), to the Association of Government Accountants on the 19th of February, third quarter 2008 national default information shows that while private label (private investor) backed mortgages are only 16% of all outstanding mortgages, they account for 62% of all seriously delinquent mortgages.

The FHFA report defines seriously delinquent as a payment that is at least 90-days past due.

In addition, Freddie and Fannie account for 56% of all outstanding mortgages, but only 19% of seriously delinquent mortgages.

PLUS, mortgages held in a bank’s portfolio account for 16% of all outstanding mortgages, and only 6% of seriously delinquent mortgages.

Can we infer anything from this information? Prior to 2008, and now again in 2009, Fannie and Freddie required that their home buyers complete a certified Home Buyer Education Workshop - - known as Home Stretch in Minnesota.

Many of the bank portfolio loans – especially first-time buyer programs and low- to moderate-buyer programs, ALSO required home buyer education - - especially in Minnesota. Is this a fair inference? Feel free to discuss in the comments.

The Minnesota Home Ownership Center believes that Home Stretch, homebuyer education and counseling is key to making informed decisions about the important choices related to homeownership. Is homeownership right for YOU? Home Stretch can help answer that question.

Are you having difficulty making a payment? Whether your mortgage is owned by Fannie Mae or Freddie Mac - - or any other lender or servicer, the Minnesota Home Ownership Center’s network of Foreclosure Counselors can help. Click here for more information.

A valuable resource: foreclosure-response.org

A new website offering resources intended to help municipalities respond to the foreclosure crisis has been developed by the Center for Housing Policy, KnowledgePlex, Local Initiatives Support Corporation (LISC), and the Urban Institute.

This new website can be found here: Foreclosure-Response.org

The Web site includes a comprehensive policy guide of strategies for preventing and responding to foreclosures.

One of the most intriguing offerings of this new website is the ability to create customized data reports and maps for the entire state.

The Center works closely with a number of municipalities and county governments to let their residents know about the availability of free and confidential foreclosure counseling. If you work for a local, county or state governmental agency, and would like to have materials available for your homeowners, please contact Ed Nelson at the Minnesota Home Ownership Center.

The sooner homeowners begin the counseling process, the more options they have!

Foreclosures In Immigrant Communities of Minneapolis

On Friday, several of us here at the Center attended an excellent presentation by professor Ryan Allen from the Humphrey Institute of Public Affairs regarding a study he conducted on foreclosures in immigrant communities in the City of Minneapolis.

Using data from the Hennepin County Sheriff’s Office and the Minneapolis Public Schools, Dr. Allen identified which foreclosed properties between the years 2006 and 2008 were inhabited by immigrant households.

Research results suggest that immigrant homeowners have been disproportionately affected by foreclosures in Minneapolis. The forum highlighted the research findings of this project and considered the implications of these findings on future foreclosure prevention strategies.

One of the policy recommendations of this study, that directly affects the work we do here at the Center is:

• Increase availability of Financial literacy and first-time homebuyer classes

For information about existing first-time homebuyer classes in Minnesota, visit: http://www.hocmn.org/buyahome.cfm

There is LOTS of additional information in Dr. Allen's report that speak to the work many of us are involved in. To view a PDF version of his PowerPoint presentation, visit: http://www.cura.umn.edu/Programs/Housing-Forum/2009/Foreclosures_and_Immigrants.pdf

Pictures From KARE-11 Phone Bank

There are now pictures available at our FLICKR pool from Wednesday night's Phone Bank.

Feel free to visit our FLICKR page: www.flickr.com/hocmn

Pictures from the 18th are in the folder: KARE-11 18Feb09
or you can click here:
http://www.flickr.com/photos/hocmn/sets/72157614108351785/


(You can also see them on the slideshow on the sidebar of the blog)

337!

337!

Yes... 337!!

That is the number of Minnesota homeowners that our volunteer counselors were able to assist last night on KARE-11's phone bank during the 4:00, 5:00 and 6:00 news.

The Center thanks KARE-11 for the opportunity to return during the newscasts on Wednesday the 18th.

Our hats off to the to the counselors that participated TIRELESSLY:

Bettie Foster-Crowe - Community Action Partnership for Suburban Hennepin

Ruth Hutchins – LSS Financial Counseling

Aliesha Kruck – Twin City Habitat for Humanity

Ed Niewinski – City of St. Paul

Rock O’Bannon – Minneapolis Neighborhood Housing Service

Kwame Owusu-Acheampong – Twin Cities Habitat for Humanity

Heather Posthumous – Community Action Partnership for Suburban Hennepin

John Sulzbach – LSS Financial Counseling

Deb Sweeney – Community Action Partnership for Suburban Hennepin

Nicola Viana – Washington Co. HRA

Cassandra Wesley – City of St. Paul

Mai Lee Yang – City of St. Paul


THANK YOU ALL!!

We should have pictures up on our Flickr pool tomorrow morning

Center Media Recap

The announcement of President Obama's Homeowner Affordability and Stability Plan yesterday brought a flurry of media requests to the Center. Here is a recap of the Center's media exposure regarding the President's announcement so far:


KARE-11 News, February 18th
Foreclosure facts: President's advice for homeowners in MN

View the article here: http://tinyurl.com/cv65sq

Video:

In addition, network counselors where highlighted on the KARE-11 Phone bank on the 4:00, 5:00 and 6:00 news. See a different post for a listing of the participating counselors and agencies.


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KARE-11 News
Take KARE of your MONEY: Avoid foreclosure
(Segment from 2/11 was re-run on 4:00 news on 2/18)

View the article here: http://tinyurl.com/al6t7b

Video:

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Fox9 News, February 18th 2009
Minnesotans Look for Help in Obama's Mortgage Plan

View Article Here: http://tinyurl.com/ahbxqc

Video:

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WCCO - Don Shelby Show - Tuesday February 18th, 2009
Mortgage Rescue Plan

We can't embed the audio here, but you can listen to Dana Snell from the Center as she speaks with Jeanette Trompoter about the President's announcement.

Listen to the audio segment here: http://tinyurl.com/cqcnap



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Star Tribune, Thursday February 19th, 2009
Local housing agencies ready for flood of calls about relief plan


Read the full article here: http://tinyurl.com/crzo2p


This article also includes a quote by a member of the Minnesota Home Ownership Center's Board of Directors, Chris Galler.

In addition, the online version of the article includes a "Mortgage Help" sidebar that lists the Minnesota Home Ownership Center as the first resource for homeowners... and includes a link to the Center's website.

We'll update this post as we become aware of any additional spots. It's going to be a busy day for the statewide network of foreclosure counselors!

MN Home Ownership Center on WCCO Radio @ 3:45

Dana Snell, Program Director at the MN Home Ownership Center, will be interviewed live on WCCO Radio at 3:45. Dana will be responding to questions regarding foreclosures, President Obama's announcement and the foreclosure counseling services that are available in Minnesota.

Once WCCO has the segment up on their site, we'll add the link to the blog.

UDPATE:
Here is the audio link to Dana's segment on WCCO's the Don Shelby Show (Hosted by Jeanette Trompeter): http://tinyurl.com/cqcnap

MN Home Ownership Center on Fox9 News at 5:00

Ed Nelson from the Center was just interviewed for a Fox9 news segment that will lead their 5:00 newscast. As soon as a link to the piece is available, we'll add the link to the blog.

Housing Stimulus: $8000 Home buyer tax credit for first time home buyers

Yesterday, President Obama signed into law the American Recovery and Reinvestment Act (ARRA). There is important news for future homebuyers included in this legislation: an $8,000 home buyer tax credit (also known as a housing tax credit) available to first time buyers!

Here are some important details of the home buyer tax credit included in the ARRA:

1. This tax credit is only available to first time buyers. The law defines a first-time buyer as someone who has not owned, or been included on title to, a property in the last three years. All home buyers who will be on title need to be first time buyers (for married couples BOTH spouses must qualify as first-time buyers).

2. Both resident and non-resident aliens who are not U.S. citizens can qualify for this tax credit.

3. The house must be purchased between January 1, 2009 and December 1, 2009.

4. The tax credit is actually calculated as 10% of the purchase price of the home, up to a maximum of $8,000.00. To qualify for the full $8,000 – the property price must exceed $80,000.00

5. There are income limits on this tax credit. First-time buyers with gross annual income of $75,000 or less will qualify for the full benefit. The credit is scaled (reduced) for gross individual incomes between $75,001 and $95,000, and individual home buyers with gross incomes greater than $95,000 cannot claim any of the tax credit. Married taxpayers will qualify for the full benefit with incomes less than $150,000. The credit is reduced for incomes between $150,000 and $170,000 and reduces to zero for gross household incomes in excess of $170,000.

6. This is a refundable tax credit – not a tax deduction. First-time buyers that meet all criteria can deduct the full $8,000 from their federal income tax owed. A refundable tax credit means that if you owe less than $8,000 in federal income tax, you can actually get a REFUND for the balance.

7. DOES NOT NEED TO BE REPAID. The biggest difference between the Home Buyer Tax Credit included in the ARRA and last year’s Employment and Economic Stability Act is the fact that this tax credit does not need to be repaid! The housing tax credit in 2008 was basically an interest-free loan to first-time buyers that needed to be repaid in 15 years. THIS home buyer tax credit does NOT have to be repaid to the federal government.

The Minnesota Home Ownership Center is in the process of creating a printable FACT SHEET with this, and other, information regarding the Home Buyer Tax Credit. As soon as that becomes available, information will be posted on the Center’s website at www.hocmn.org and this blog.

Is homeownership right for you? Will this tax credit help you purchase your first home?? The Minnesota Home Ownership Center's HOME STRETCH Counselors can set up an appointment to discuss if NOW is the right time for YOU to begin your home buying process.

MN Home Ownership Center Tracking President's Foreclosure Announcement

The Minnesota Home Ownership Center is tracking all announcements from the President regarding the details of the latest federal foreclosure prevention program.

Check back here throughout the coming days for additional information as it becomes available!

Our network of foreclosure prevention specialists will also be fully versed in the details of the program - in addition to any other helps, assistance and resources that are currently available to Minnesota homeowners. To find your local non-profit foreclosure specialist, visit: http://www.hocmn.org/knowyouroptions.cfm

Invited Back to KARE-11

The Center’s network of Foreclosure Counselors has been invited back to participate in a Phone Bank for KARE-11 viewers on Wednesday 18th.

Our Counselors will be available during the 4:00, 5:00 and 6:00 newscasts on the 18th!!

Due to the overwhelming response we received due to last week’s appearance, the Center has also made some upgrades to our phone system as well – and is ready, willing and able to handle the influx of calls.

We'll post pictures of the phone bank after the event. Don't miss it!

UDPATE:
Here is the spot by KARE-11's Karla Hult: http://tinyurl.com/abrpx3

Ripple Effect of Foreclosures

While foreclosure can be financially and emotionally devastating for families, there are also community effects that ripple beyond the homeowner(s) involved.

The Start Tribune published an article this past weekend that shows the effect foreclosures are having on local shelters: http://tinyurl.com/aas3be

In March of 2008, the Minneapolis/St. Paul business journal published an editorial that highlighted the effects foreclosures are having on families that are renting homes that are in foreclosure: http://tinyurl.com/ab4cta

NACO, the National Association of Counties published a policy brief in June of 2008 that showed the effect foreclosures are having on county budgets nationwide. Foreclosures affect both county expenses and income (revenue). You can read the entire brief, in Adobe PDF format, here: http://tinyurl.com/czlobm

The Minnesota Home Ownership Center understands the importance of preventing foreclosures whenever possible. Homeowners that are having difficulty with their mortgage payments, or are afraid they may have difficulty in the future, are encouraged to contact the Center’s network as soon as possible. For foreclosure resources, click here: www.hocmn.org/stayinyourhome.cfm

UMN Report on Race and Mortgage Lending

For those readers that would like to delve into the issue of race and mortgage lending rates, the Intitute on Race and Poverty at the University of Minnesota has published a new report entitled: "Communities in Crisis," that shows strong racial disparities in mortgage lending in the Twin Cities metropolitan area.

The full report, in PDF format, can be found here: http://tinyurl.com/c89cml

To view a video of the presentation, visit: http://tinyurl.com/cgpku5

The Minnesota Home Ownership Center recommends that ALL homebuyers learn the ins-and-outs of the home buying process - including the mortgage application process - before signing anything that may put your home, or financial future, in jeopardy. If you're thinking of buying a home... think HOME STRETCH first! Learn more here: http://www.hocmn.org/buyahome.cfm

Behind the Scenes at KARE-11

Here are some "Behind the Scenes" photos from last night's KARE-11 spot:

The tour:

Taking calls (HUNDREDS of them!):

There are more pics available on our website. Go see them! http://tinyurl.com/as3oa9

KARE-11 Extra Last Night

WOW!

The Center thanks KARE-11 for the opportunity to be a part of the KARE-11 extra on the 10:00 news on February 11th. The counselors that participated fielded HUNDREDS of calls in the hour between 10:00 and 11:00pm.

KUDOS to the counselors that participated:

Kwame Owusu-Acheampong, Twin Cities Habitat for Humanity
Mai Lee Yang, City of St. Paul PED
Nathan Thorvilson, Community NHS
Heather Posthumus, Community Action Partnership for Suburban Hennepin
Bettie Foster-Crowe, Community Action Partnership for Suburban Hennepin
Deb Sweeney, Community Action Partnership for Suburban Hennepin
Stacey Bostwick, PRG, Inc.
Pao Yang, Washington County HRA
Ed Niewinski, City of St. Paul PED
Rachel Smith, Dakota Co. CDA

THANK YOU ALL!!

To see the spot, visit KARE-11:
http://www.kare11.com/news/news_article.aspx?storyid=539269&catid=2
(Sorry, we can't embed their video here)

We should have some 'behind the scenes' photos up soon!

KARE-11 News - Tonight!

The Minnesota Home Ownership Center's network of Foreclosure Counselors will be focused on Tonight's (February 11, 2009) KARE-11 News Extra on the 10:00 news.

We hope to have some pictures up from tonight's event in the next couple of days. Check back soon!

Homebuyer Tax Credit - What's Up?

Here at the MN Home Ownership Center, we've received lots of questions regarding the proposed Home Buyers Tax Credit in the current Federal Stimulus Bill. We'd like to remind our readers that at this point in time, the Stimulus Bill is still a work-in-progress - - - and lots of things could change between now and when President Obama signs the Stimulus Bill into law.

The Minnesota Association of Realtors has put together a short fact-sheet that outlines the current Home Buyers Tax Credit (Signed into law in 2008) with both the House and Senate versions of the Bill. To view their fact sheet, click here.

Is now the right time to buy a home? Will you be able to take advantage of the Home Buyers Tax Credit if you purchase in 2009? Are there other programs (down-payment, entry costs, reduced interest rates, etc.) that might help YOU purchase your first home?

The Minnesota Home Ownership Center's HOME STRETCH Counselors can set up an appointment to discuss if NOW is the right time for YOU to begin your home buying process.

Welcome!

Welcome to the new blog of the Minnesota Home Ownership Center!

We'll be using this blog to share information about home ownership issues in Minnesota (and around the country). Feel free to subscribe to our RSS feed so you can be kept up to date.

The Minnesota Home Ownership Center is the state's leading independent, non-profit provider of information and resources aimed at helping Minnesotans begin, and maintain, home ownership. Since 1993 we have worked to achieve our mission by empowering a network of more than 50 non-profit, public and tribal organizations to provide education and counseling services to potential home buyer and home owners working to sustain their mortgage.

Welcome to our blog!