Success: a follow-up email we received

Back in December, the MN Home Ownership Center, with the help of 14 non-profit foreclosure counselors from the Center's network of providers, more than a dozen additional volunteers, and representatives from Wells Fargo Bank, held a workshop on foreclosure avoidance that was attended by hundreds of homeowners from Minnesota's SE Asian community.  (More info on the event here).

Today the Center received a follow-up email from one of the volunteers at the event:

I volunteered at this event to learn more about the foreclosure process so I could better serve my members. After learning about this event, I strongly encouraged one of my members, who was in foreclosure to attend the event. I was thrilled when she attended, knowing she was already in 4+ months of not paying her mortgage. I am very happy to report that today, I learned, with the assistance of your workshop and being connected to a foreclosure specialist, she was able to qualify for modifying her mortgage and has decreased her monthly payments from $950 to a more manageable $674. The most rewarding part of this, is knowing that she, her husband (both who are disabled) and their 7 children will still have somewhere to live. Thank you for all the hard work you do.

These are the success stories that keep us motivated here at the Center.  Our mission is "Succesful Home Ownership"... and we're glad we were a part of this family's success! 

The Center is currently finalizing its Foreclosure Counseling Report for 2009 which we'll be releasing in the coming weeks.  The report aggregates thousands of stories like the one above.  Stay tuned for more information.  (You can subscribe to receive our blog posts via email on the right-hand side of this page, or subscribe to our RSS feed here).

For more information on events, workshops and future trainings, visit the Center's website here.

FHA Rule Change for Loss Mitigation

One of the most frequent 'concerns' that the MN Home Ownership Center receives from clients that are trying to be proactive about foreclosure avoidance - that is, they are trying to work with their lender/servicer BEFORE they fall behind in payments -  is that their lender can't work with them until they are already delinquent. 

In some instances... this was actually due to an invester policy with FHA-backed mortgages. Homeowners were not eligible for loss mitigation services until they were at least 30 days behind on payments

HUD has announced a rule change for FHA-backed mortgages, and now homeowners experiencing financial hardship who have FHA loans are now eligible for loss mitigation before they fall behind on their monthly payments. Now, loss mitigation options of forbearance and FHA-HAMP may be used when borrowers are “facing imminent default.” For more information, see HUD’s press release here.

If at all possible... homeowners should seek solutions BEFORE falling behind in payments.  If you, or someone you know is struggling with mortgage payments... don't wait until it's too late. To find your local non-profit, FREE Foreclosure Counselor, click here. For additional information about preventing foreclosure in Minnesota, click here.

New Report: 2010 Will Be Bad Year for Foreclosures

Just wanted to call attention to a new report on the health of our housing market and the progress of loan modification efforts.  The report is produced by a working group of state Attorneys General and banking regulators from across the U.S.

The easy-to-digest report predicts a dramatic acceleration of foreclosures in 2010.  Here's a snippet from the rather gloomy introductory paragraph:

... one in seven borrowers is behind on their mortgage. One in four homeowners with a mortgage owes more than their home is worth. The unemployment rate is 10% nationally, with millions of additional Americans either out of the workforce or underemployed. Hundreds of thousands of homeowners have “pay-option” ARM mortgages that are ticking time bombs for payment shock, when these loans reset to much higher payments. Despite efforts of servicers, homeowners, and the government, the foreclosure crisis continues to worsen. These signs point to more foreclosures in 2010 than in 2009. (Highlight Ours)

Remember... the sooner you or your clients seek help to avoid foreclosure, the more options they have available.  If you, or someone you know is struggling with mortgage payments... don't wait (and don't EVER pay for help). To find your local non-profit, FREE Foreclosure Counselor, click here. For additional information about preventing foreclosure in Minnesota, click here.

2009 Tax Returns and the Homebuyer Credit

Back in  November, the Center highlighted information about the "Worker, Homeownership and Business Assistance Act of 2009", that extended and expanded the first-time homebuyer credit.  (Original Blog Post Here).

The law created an $8,000 tax credit available to first time buyers who are purchasing their primary residence, and a potential $6,500 tax credit for some existing homeowners who purchase another principal residence.

The IRS has issued some additional guidance regarding filing for the tax credit when homebuyers submit their 2009 tax return:

"Because of the documentation requirements for claiming the credit, taxpayers who claim the credit on their 2009 tax return must file a paper — not electronic — return and attach Form 5405, First-Time Homebuyer Credit and Repayment of the Credit" (Highlight ours)

For additional information on the documentation required when submitting a 2009 tax return, visit the IRS website here.

For an overview of information about the tax credit for first-time buyers, the Center has produced a fact sheet, here.

As we stated in November, first-time buyers should never base their home-buying decision on a tax credit. 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.

What do I do if I've been scammed?

As homeowners continue to struggle with house payments… the Center and its network of non-profit Foreclosure Counselors continue to hear about homeowners who have paid companies (or "agents," / "brokers," / "representatives") to have their loan modified with no results.

While it seems as though the average fee is about $2,000 – $3,000, our counselors have encountered homeowners that have spent upwards of $12,000 (see our blog post here) all with little or no results.

For more information about avoiding these scams, the Center has produced a "Consumer Alert" fact sheet that you can view here. Bottom line: no struggling homeowner should have to pay to get help with their mortgage. It’s really that simple.

If you, or someone you know, has become a victim of a loan modification scam, there are a few steps that we encourages you to take:

1. Speak with one of Minnesota’s non-profit Foreclosure Counselors. They will be able to assess your situation and offer you the kind of help and assistance that the ‘fee-for-service’ organization promised, but couldn’t/didn’t deliver.
   
2. Gather as much supporting documentation as possible – name of company and agent/representative you spoke with, company address, details about when you talked to them, and especially: copies of anything you agreed to in writing, receipts of payment (cancelled checks, for example), etc.
   
   After reviewing your situation and documentation, your Foreclosure Prevention Counselor may decide to refer you to non-profit legal assistance teams for review.  Please note: there have been limited successes to date, especially due to the fact that many of these organizations are located outside of the state of Minnesota. Our legal partners have found that the company or its agents never reply to demands for repayment - they suspect they just sets up shop under another name. However, if the company is local and as homeowner you are willing to pursue further action, they may be able to do more, including actions with the MN Attorney General’s Office and even suing the organization or agent.
   
   
3. File a complaint with the Minnesota Attorney General’s Office. Minnesota’s "Foreclosure Consultant law" was updated last year to include loan modification services, and that law prohibits charging an up-front fee before services are performed. The AG is a central office for compiling complaints and has the most power to act. The AG has a complaint form on their website here.
   
4. Use the Minnesota Department of Commerce website to look up whether a company is licensed for mortgage loan origination (Follow the "License Look Up Tool" link on the right-hand side of this page). By law, companies that provide mortgage modification services must be licensed by the state and often times are not. If they are not licensed, the Commerce Department may be able to fine the company and force them to get licensed.

Remember: there is NO NEED to pay for foreclosure-prevention services in Minnesota. There is NOTHING a fee-for-service company can do that our network of Foreclosure Counselors can’t. And more often than not… these fee-for-service companies are SCAMS. Be careful out there!

Why is it so hard to get an effective loan modification?

The Minnesota Home Ownership Center, and it's network of Foreclosure Prevention Counselors, hears from clients on a daily basis about the difficulties they are facing when working with their bank... that many times a loan modification doesn't 'modify' the loan enough to be affordable in the long term. 

There is a lot that goes on "behind-the-scenes" before a bank is able to modify anyone's loan.  The Consumer Law and Policy Blog published an interesting article on Monday about the difficulties banks have when modifying loans when there is more than one lien holder (more than one loan) on the property.  The article, entitled "The Second Mortgage Problem - Banks Holding Out" is here.

Working with a bank to obtain a successful loan modification is not easy, but the Center's network of Foreclosure Prevention Counselors are VERY (VERY!) good at what they do.  If you, or someone you know is struggling with mortgage payments, and think that a loan modification may help... don't wait (and don't EVER pay for help).  The sooner you contact a counselor, the more options you have available.  To find your local non-profit, FREE Foreclosure Counselor, click here.  For additional information about avoiding foreclosure in Minnesota, click here.

New Scam Threatens MN Homeowners

David Kaplan of the Twin Cities Daily Planet, has written an excellent article highlighting a new scam that preys on struggling MN homeowners... especially homeowners in immigrant communities. 

The group ("Slavery to Sovereignty") claims to be able to stop foreclosure - while eliminating property taxes and even personal income taxes - by filing certain papers with the county - all for the exorbitant price of $12,500.   

THE INFORMATION THIS GROUP IS PROVIDING IS FALSE. 

For more information about foreclosure-prevention scams... the Center has produced a fact sheet here.

Here's a quote from the article that highlights the steps a homeowner should take before paying ANYONE for help to avoid a foreclosure:

"Rather than making a bad situation worse," Mr. Nelson said, "use the resources that are already freely available. On our website, we have a listing of all the non-profit organizations that work within our network in Minnesota, with services available in every county."

For more information about avoiding foreclosure - and the help available in Minnesota, click here.

The author, David Kaplan, is looking for homeowners that may have already begun working with this "Sovereign" group.  If you have... and would like to speak with the press, feel free to contact David here.

66,570 Pre-Foreclosure Notices Received in 2009!

Wow! The Center’s Foreclosure Prevention counseling network received over 66,500 Pre-Foreclosure Notices in 2009!!

When we look at the year-end numbers, we also notice that the trend of decreased notices that started back in October ended rather abruptly in December with an almost 6% increase in the number of notifications received.

Here are the January through December, 2009 STATEWIDE Pre-Foreclosure Numbers:

And here is what the full year (January through December) 2009 looked like in the Twin Cities Metro Area:

Remember, these numbers are self-reported by lenders/servicers or their attorneys. 

It will be interesting to see year-over-year comparisons as we enter into 2010!

¡EXITAZO! Evento Contra El Embargo (Foreclosure) En Minneapolis

Readers... don't panic... you're still at the MN Home Ownership Center's blog!  The Spanish headline is a response to the Center's "Borrower Workshop for the Latino Community" that was held at Plaza Verde in Minneapolis on Saturday January 9th.

'Exitazo' means HUGE SUCCESS... and the event was, indeed, a huge success:

• More than 160 people attended the event;
• Over a dozen foreclosure prevention counselors from local non-profit housing counseling agencies worked with homeowners to get their questions answered and start the counseling process
• Four lenders/servicers (Chase/JP Morgan; Freddie Mac; US Bank and Wells Fargo) assisted with outreach by mailing and calling consumers and sending loss mitigation staff to work with homeowners
• More than a dozen volunteers worked tirelessely to register homeowners and coordinate the event
• Mayor's from Minneapolis, St. Paul, Brooklyn Park, Brooklyn Center, Plymouth, Richfield and Bloomington assisted with outreach by signing letters inviting homeowners to the event.
• The event was highlighted in two Spanish-speaking newspapers and two radio stations.  Graciela Mendez from Neighborhood Development Alliance was interviewed on "La Invasora" during the event.

Here are a few pictures from the event:

For additional pictures, feel free to visit the photoset at the Center's FlickR album.  Did you take pictures of the event?  We'd love to add them to our album.  Contact Ed Nelson.

The Center's outreach to the Spanish-speaking community is not limited to large-scale events like the workshop at Plaza Verde.  The Center has a Spanish-Language website here, and is constantly working with its network partners to improve information sharing with the Latino Community.  A complete list of all of our handouts/fact sheets in Spanish is available here.