Center Undertaking Cost Analysis Study with Mpls Fed

The Center is excited to be embarking on a research study with the Federal Reserve Bank of Minneapolis to understand the true cost of education and counseling services for Home Stretch, Pre-Purchase Counseling and Foreclosure Counseling. We will be researching the average cost per household served for the following variables: program area, geographic location, type of agency, and markets served (traditional & emerging).

One of the Minnesota Home Ownership Center's goals is ensuring that the services offered through our network partners can be sustained into the future. In order to ensure sustainability, the Center needs to understand the true cost of providing homeownership education and counseling. Data that demonstrates the costs associated with services can then be used as a foundation for discussions about the cost/benefit analysis for the work our counselors do.

While some research has been done on the national level... this is a first of its kind study of the costs associated with offering homeownership education and counseling in Minnesota. The complete report of findings will be available later this year. Stay tuned!

One in every 83 Homes In Process of Foreclosure

As a follow-up to last Friday's post on the statewide number of pre-foreclosure notices that the Counseling Network has received for the first 6 months of 2009... our friends at HousingLink were able to take the numbers and put them in perspective:

According to HousingLink, there were 1,795,383 homes (residential parcels) in Minnesota (as of 2008).

HousingLink then divided the number of homes by the number of pre-foreclosure notices we reported (21,030). This results in an approximate calculation of 1.2% of all homes in Minnesota.

That translates to one of every 83.33 homes in Minnesota has received a pre-foreclosure notification in the first half of 2009.

Thanks to HousingLink for their input!

Statewide Pre-Foreclosure Notices June 2009

In response to yesterday's blog post (June 2009 Twin Cities Pre-Foreclosure Notices), we received a number of requests to see what the trend looks like for the entire state of Minnesota. Below are the TOTAL number of pre-foreclosure notices received by the statewide network of Foreclosure Counselors from January through June 2009.

So here are the numbers:

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While the trend is certainly moving higher, it is not nearly as pronounced as in the Metro. Here is the graph of the statewide numbers:

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We also received a few requests to see county-by-county trends... given capacity levels at our partner organizations and here at the Center... that won't be possible (for now).

June 2009 Twin Cities Pre-Foreclosure Notices

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.

Here are the June, 2009 Pre-Foreclosure Numbers:

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While the June numbers are a slight dip from May, it's far too early to say if this is a trend, especially given the 'staircase' effect we've seen so far this year:

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Once again, we have to tip our hats to the statewide network of Foreclosure Counselors! 4,150 families received notification of their services in May!

This brings the total number pre-foreclosure notices received in the Twin Cities Metro area (7-County Metro) to 21,030!

If you're falling behind with your mortgage payments... or think you may fall behind soon... don't delay, contact a Housing Counselor that specializes in foreclosure today! To contact your local Counselor, click here.

Link to All Minnesota Statutes on Foreclosure

Here's a handy link that our readers may find helpful...

The Minnesota Office of the Revisor of Statutes compiles, edits and prints (online as well) all Minnesota Laws, Rules and Statutes.

From the Minnesota Office of the Revisor website, here is a quick link to ALL Minnesota statutes related to foreclosure:

https://www.revisor.leg.state.mn.us/statutes/?topic=198483

Reading through some of the statutes can certainly be overwhelming... and just the shear number of statutes relating to foreclosure in Minnesota is pretty staggering. If you are in foreclosure, or afraid you may fall behind on your mortgage payments soon, speak with a Housing Counselor that specializes in foreclosures to make sure that your rights are being protected... and that you know about ALL the options you have available.

Lenders Abandoning Properties?

Here's an interesting story from our neighbors to the east....

The Journal Sentinel in Milwaukee has written an extensive article on lenders and loan servicers that initiate the foreclosure process, but never complete the Sheriff's sale, or, if the Sheriff's sale takes place, never record the sale. In these situations, the lender never takes title to the properties - because they are, for all intents and purposes, worthless. This leaves the property "abandoned" as most of the time the homebuyer has moved out, thinking that they had already lost the property (The foreclosure process in Wisconsin is different from the process in Minnesota).

In past downturns, there have always been a small number of properties that have been 'abandoned' both by the homebuyer and the lender. Could this downturn cause this previously-limited situation grow? Will the trend of securitization of mortgages that occurred in the past few years (securitization is the process of turning mortgages into securities that are then sold to investors) lead to more abandoned properties this time? (As the mortgage-investors, who have already lost 100% of their investment on a property, don't want to invest another dime to either take title, cover assessments, maintain or rehab the property)?

In the article, Jeannine Bruin, an executive director of mortgage communication with lender and servicer GMAC, gives this explanation:

“We do the cost-benefit analysis (for) the investor. Is he going to recoup any money for us to go through the whole process of foreclosing, fixing the property up, marketing it, selling it? Is anything coming back to that investor? If not, it’s best to just let the borrower keep ownership of the home.”

The Journal quotes Kathleen Day of the Center for Responsible Lending who says lenders are walking away in cities across the country. But no one has quantified the trend.

Please read the story... it's chock full of analysis and examples of why lenders and servicers abandon properties.

Then come on back and tell us if you're seeing anything like this in Minnesota? Any of our Realtor friends or lender partners seeing this happening? Perhaps in low-cost areas in the Twin Cities?

You can comment anonymously if you'd like.

New Video Question: Buying a Home After Foreclosure

The Center has produced video #3 in its question and answer series.

This question comes from a former homeowner in Hugo who asks:

I went through foreclosure in 2008. By redemption period ended in December... will I be able to purchase another home in the future?

The answer to her question, is here:

HousingPolicy.org Highlights Minnesota's Innovations

HousingPolicy.org, is an online guide to state and local housing policy developed and maintained by the Center for Housing Policy, the research affiliate of the National Housing Conference. They focus on compiling and disseminating information of value to governmental agencies and housing policy specialists.

The most recent addition to their PolicyLink Toolkit: Reclaiming Foreclosed Properties for Community Benefit, highlights three parts of the country that are doing some innovative things to return previously vacant and foreclosed properties to productive use.

The areas they highlight for best practices in their latest report are Providence, RI; Cleveland, OH and... The Twin Cities! The guide/report highlights the work of the MN Foreclosure Partners Council, which the Minnesota Home Ownership Center is a part of.

The full guide is available here.

The 'money quote' is found on page 67:

Conclusion

Minnesota officials recognized the scale of the foreclosure problem before most of the nation’s experts and took quick action. The Minnesota Foreclosure Partners Council is an extraordinary example of organizations and government working together on a statewide basis to solve important issues. Their work is both visionary and grounded, focusing on innovative financing, buyer incentives and quick, strategic acquisition of REO properties as pilot communities for the National Community Stabilization Trust’s First Look program. Their efforts send a powerful message to funders and organizations looking for worthy projects to invest in.

The Center is proud to be a part of the MN Foreclosure Partners Council... and to be working to help Minnesota families - - and our communities recover from the foreclosure crisis.

Do you work for a City, County or other municipality? Would you like help in getting the word out to YOUR constituents about the availability of FREE, High Quality, Non-Biased Foreclosure Prevention Counseling? Contact Ed Nelson at the Center for information on flyers and postcards that can be co-branded with YOUR information.

Another Indicator of Struggling Families?

The USDA (US Department of Agriculture) has published their monthly data on the use of Food Stamps (now known as SNAP - Supplemental Nutrition Assistance Program).


You can access the data here.


The data shows that Minnesota families and individuals continue to struggle. The most recent numbers show that usage of the SNAP program increased 3.5% from March to April, 2009; and increased an astounding 20.7% from April, 2008 to April, 2009.


While there is no data that shows the percentage of HOMEOWNERS using the SNAP program... this is just one more indicator Minnesota families are continuing to struggle with ALL of their payments.


If you're falling behind in your mortgage - or are afraid you might fall behind soon - the Center's network of Foreclosure Prevention Specialists are available to help... and all services are FREE. Click here for more information.

NY Fed Interactive Map of Q1 Mortgage Delinquencies

The Federal Reserve Bank of New York has made the first quarter 2009 data regarding mortgage payments that are 90+ days delinquent available in an interactive map (county-by-county) on their website here.

Even with all the foreclosures that have occurred over the past few years, there are counties in Minnesota where the 90+ days delinquent is over 5%! One in 20 mortgages!

Here are the percentages of mortgages reported as 90+ days delinquent during the first quarter of 2009 for the 7-County Twin Cities Metro area:

1. Anoka ............ 3.76 %
2. Scott ............ 3.61 %
3. Ramsey ............ 3.28 %
4. Hennepin ............ 3.03 %
5. Dakota ............ 2.75 %
6. Washington ............ 2.44 %
7. Carver ............ 2.33 %

County with the highest percentage of 90+ days delinquent mortgages?
- - - Isanti County ............ 5.3 %

County with the lowest percentage of 90+ days delinquent mortgages?
- - - Redwood County ............ 0.36 %

The interactive map ALSO tracks, using TransUnion data, the 60+ day delinquency rate on bank-issued credit cards. If the 60+ day delinquency rate is a leading indicator of future mortgage foreclosure (and it probably is, as struggling homeowners load their credit cards while trying to make mortgage payments) Minnesota is still in for a long haul with future foreclosures.

If you're struggling with your mortgage payments... don't despair. HELP IS AVAILABLE. Click here for more information.

New Report from Minnesota Housing Partnership

The Minnesota Housing Partnership has produced a new report that studies two indicators for each of four key housing areas:

• the home ownership market,
• the rental market,
• homelessness, and
• the housing industry.

The report, known as the "2 x 4 Report" will be updated quarterly.

The report is a great resource for housing information, and is designed to provide a concise, easy-to-digest, graphic overview of the state of housing in the state of Minnesota.

The first report, released on June 30th, as is expected, points to continued hardship and challenges for families and the housing industry in general. It will be interesting to see the indicators change over the coming months and years.

The complete report is available here.

Link Between Homelessness and Foreclosure

Last night I had the opportunity to meet with Sue Watlov Phillips, the Executive Director of Elim Transitional Housing in Minneapolis and co-author of a new report on the link between foreclosures and homelessness.

Sue has recently returned from Washington, D.C. where she presented the findings of the report "Foreclosure to Homelessness 2009 - The Forgotten Victims of the Subprime Crisis" to leaders in Washington. The complete report can be found here.

The report was created using surveys completed between January 15th and February 21st by more than 175 organizations throughout the country that provide services to people experiencing homelessness. The report has determined that the nation’s homeless population has been directly impacted by foreclosure. More importantly, homelessness is likely to increase along with the number of foreclosures.

Nearly 80% of the respondents reported that at least some of their clients became homeless due to foreclosure.

Other facts from the findings include:

• Those experiencing homelessness due to foreclosure tended to be renters – not owners.
• Most of those facing homelessness because of foreclosure, whether renters or owners, did not seek legal advice in foreclosure proceedings.
• The most common living situations among those made homeless by foreclosure included staying with family or friends and emergency shelters.

The 40-page report was released by the National Coalition for Homelessness in partnership with National Health Care for the Homeless Council (NHCHC), the National Association for the Education of Homeless Children and Youth (NAEHC), the National Law Center on Homelessness and Poverty (NLCHP), the National Low Income Housing Coalition (NLIHC) and the National Policy and Advocacy Council on Homelessness (NPACH).

Sue was also excited to share how the NLIHC and NHLP have created a toolkit for renters facing eviction due to foreclosure. The toolkit is available on the National Low-Income Housing Coalition website.

The toolkit includes a copy of the new federal law - which, with Sue's help, we are studying to see how, if at all, it affects Minnesota tenants. Minnesota law may actually give tenants MORE time than the Federal version - and Sue will be sharing her findings with us shortly.

The toolkit also includes explanations of the federal law's provisions, a question and answer document for tenants, sample letters to send to landlords, judges and public housing agencies and a webinar explaining the new law.

If you're a renter in Minnesota, and your landlord is facing foreclosure, DON'T PANIC. Minnesota State law protects you (assuming you've signed a lease) and there are local, non-profit tenant advocacy organizations that can work with you in YOUR situation. For more information, visit our website at: http://hocmn.org/renters.cfm