Help With Foreclosure Postponement

New online tool can help homeowners with foreclosure postponement

Minnesota is one of the only states in the country where struggling homeowners have the ability to legally postpone their foreclosure sale (Sheriff's Sale).  Minnesota state law has allowed homeowners the right to delay their foreclosure sale on their home by five months (11 months in certain rural/agricultural areas) since mid-2009. 

However, knowing the steps to take and how to fill out the legal documents necessary to postpone the sale has been an obstacle for many Minnesota homeowners.  That changes today with the announcement that the Minnesota Legal Services Coalition, Southern Minnesota Regional Legal Services and the Minnesota Home Ownership Center have partnered on the creation of a free online tool that assists homeowners with the process.

How does it work?
The Foreclosure Postponement Tool, here, asks homeowners a series of simple questions, then automatically fills out the legal form they need, known as the "Foreclosure Sale Postponement Affidavit." Along with their finished form, users also receive a set of simple, yet detailed instructions on how to file the form properly. Once the form has been filed and the proper parties have been notified, the postponement takes effect.  If you choose not to set up a username, the system will NOT save any personally identifying information... so you can be assured of confidentiality.

Should I postpone?
Before deciding to delay or postpone a Foreclosure Sale, homeowners should consult with a non-profit housing counselor that specializes in foreclosure prevention to understand the pros and cons of a postponement.  To find your local foreclosure counselor, click here.

Make the Most of the Extra Time
After you've submitted the necessary documentation, and your sale has been postponed, what happens next?


Homeowners should start by finding a free, non-profit foreclosure counselor - while always staying wary of scams. Some web sites offer to "save your home" by charging premium prices for services that are available for free.  To mitigate this problem, the Foreclosure Postponement Tool encourages users to contact the Minnesota Home Ownership Center. The Center offers referrals to reputable non-profit counselors via the Homeownership Advisors Network.


Try it out!  www.LawHelpMN.org/ForeclosurePostponement

Foreclosure Scams Are Still An Issue

BE CAREFUL OUT THERE!

On April 6, 2011, a coalition of fair housing non-profit organizations released their findings of a year-long undercover investigation of 80 "loan modification" (foreclosure rescue) companies, which reveals that the industry is rife with unethical, corrupt and even illegal practices.  These practices include over-promising & under-delivering, charging fees for services that are available free from nonprofit organizations and even advising clients on how to commit acts of fraud against their lenders.

The report - which has a GREAT title: “Have I Got a Deal for You! An Undercover Investigation of Mortgage Loan Modification Scams,” was released by The National Fair Housing Alliance, the Connecticut Fair Housing Center, Housing Opportunities Made Equal of Virginia, Inc., and the Miami Valley Fair Housing Center.  It documents some of the tactics mortgage modification scammers use to take money from struggling homeowners.

Here are just a few of the results of the report: 

• 55% of the scammers required an upfront fee to start work or required a low initial fee to conduct minimal work on behalf of distressed homeowners, such as reviewing loan documents;
• 43% guaranteed or promised they could secure a loan modification even before learning about the homeowners’ financial limitations;
• 24% advised or encouraged homeowners to stop making their mortgage payments or to stop contacting their lenders;
• 16% guaranteed a new, much lower interest rate ranging between two and 6 percent on modified loans;
• 12% discouraged homeowners from seeking free help from government-approved housing counseling agencies;
• 8% encouraged homeowners to provide fraudulent information to their lenders.

The full report is available here.

None of these findings surprise us here at the MN Home Ownership Center.  We hear from homeowners repeatedly that have spent money, lost time and been taken advantage of by less-than-scrupulous mortgage "rescue" operations.  If you are struggling with your mortgage, THERE'S NO NEED TO PAY FOR HELP.  There is a network of FREE, non-biased housing counseling agencies that can assist.  To find your local non-profit foreclosure prevention counselor, click here.

For more information on what's being done in Minnesota to fight foreclosure rescue scams, visit the Center's "Look Before You Leap" website.  You can help us fight these scammers in Minnesota!

Buying a Home With Someone?

One of the best reasons to take a Home Stretch workshop is to be able to fully understand all of the terminology that is related to homeownership.  This is especially important when closing on a property that you are buying with someone else... as a couple, family or just friends purchasing a property together.

In Minnesota when two or more people buy a home together they can choose joint tenancy or tenancy-in-common. The Minneosta Home Ownership Center has created a new Fact Sheet to provide an overview of both types of ownership.

Here's how it works:




Joint Tenancy
Joint tenancy is when two or more people own equal shares of a home. If an owner dies, ownership is transferred to the remaining owner(s).This is called the “right of survivorship.”

Tenancy-in-Common
Tenancy–in-common is when two or more people own a home. Ownership does not have to be equal. If an owner dies, ownership is transferred to the person(s) named in their will.

Tenancy-in-Common Agreement


When choosing tenants-in-common, a tenancy-in-common agreement is recommended. Agreements are usually written with the assistance of a real estate attorney.


The agreement generally includes:

• The agreed to percentage of ownership for each owner.
• A formula to determine the amount of each owner’s payment.
• Consequences for an owner not paying their portion of the mortgage.
• How property maintenance and the cost will be shared.
• Restricting the sale or transfer of ownership without the consent of the other owner(s).
• Acceptable reasons and the price to buyout an owner.
• What happens if an owner declares bankruptcy or in the event of a death.

To view this new fact sheet, and other helpful information for first-time buyers, visit the Center's website here.

If you're thinking of purchasing your first home... and would like to learn more about the types of homeownership and lots of other important information, you should take a Home Stretch workshop! 

More Warnings Against Scams

The Huffington post has a great story up about the dangers that struggling homeowners face when they don't know where to turn for help, or when they grow frustrated trying to work with their lender: they become prey to scam artists.

The piece is here.

The Minnesota Home Ownership Center has additional information on avoiding scams on the "Look Before You Leap" (Avoiding Foreclosure Scams) website, here.

Here are some additional tips on how to avoid foreclosure rescue scams:

• Don't fall for the lies that the scammers use to lure in homeowners: claims that they can save your credit, promise to find a buyer for your property or offers of free rent or gifts.
• Don't EVER be pressured to sign a contract... especially if you don't understand something.  If something sounds too good to be true, it probably is.  Speak with an attorney or a certified foreclosure prevention specialist who can help review documents with you.
• Don't EVER send your monthly mortgage payment to a third party or a mortgage 'rescue' company, even if they promise to forward those payments on, or hold them in a special account.
• Don't rely on verbal agreements.  Get everything in writing and keep copies of all documents, ESPECIALLY the ones you sign.  This is good advise, but many of the homeowners highlighted in the HuffPo article had 'contracts' and those contracts were worth less than the paper they were printed on, so be very careful.
• Don't sign any form or contract with blank spaces or blank lines. 

Basically, we can sum up these scams in one line: no one that is struggling to pay their mortgage should have to pay to get help!

There is a network of FREE foreclosure prevention counselors available in Minnesota that are ready, willing and able to sit down with you to discuss your options for avoiding foreclosure.  To connect with a foreclosure prevention counselor, click here.  To learn more about the options available to Minnesota residents to avoid foreclosure, click here.

Housing Indicator - 2x4 Report

The Minnesota Housing Partnership has recently released its updated report (known as the "2 x 4 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 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 complete report is available here.

Focusing on the "Owners' Market" segment of their report, it's interesting to see that delinquencies fell slightly to 6.5% in the fourth quarter of 2010, continuing the downward trend that we've seen throughout the year.

Somehow... there is a disconnect happening that isn't easily explained:

In both 2008 and 2010 delinquencies were LOWER than 2009, but actual foreclosures (Sheriff's Sales) were higher in both 2008 and 2010.  In reality, the delinquency rate maxed out at just over 8% in Q4 2009, but the highest quarters for sheriff's sales have been Q2-2008 and Q3-2010.

View the report... and add your 2-Cents in the comments. 

Home Repair & Rehab Resources in Minnesota

The Minnesota Home Ownership has created an easy-to-use resource listing affordable home repair and rehab assistance programs throughout the state of Minnesota. Programs included in the resource include:

• emergency repair,
• energy efficiency upgrades,
• lead hazard abatement, and
• general repair.

Some funds are direct grants to homeowners and others are loans, usually with below market interest rates or forgivable terms. The resource outlines dozens of programs available throughout the state and includes information on who to contact and how to apply.

 

Here's a sample of one of the Rehab loans (Zero interest, deferred for 20 years) available to residents of St. Louis, Lake and Cook Counties.  There are several dozen other programs outlined in the printable resource:

 

 

Click To Enlarge

 

The complete “Home Rehab and Repair Matrix” can be viewed and downloaded, free of charge, from the Minnesota Home Ownership Center’s website here.

 

New Research on Foreclosures from Minnesota Housing

Minnesota Housing, the State of Minnesota's Housing Finance Agency, has released its "Residential Foreclosures in Minnesota, Winter 2011" report.  The data, on the delinquencies and foreclosures of residential mortgages in Minnesota, comes from LPS Applied Analytics.

The report provides information about key statewide trends on both delinquencies and foreclosures, and shows, using full-color maps, the foreclosure and delinquency hotspots around the state as well as information about changes in the number of delinquent and foreclosed loans in each zip code.

In addition, the appendices include two large tables that provide data for each residential zip code in the state... a plethora of information to dig through!

Here are some of their findings:

• The state’s delinquency rate for residential mortgages has increased significantly over the last several years. Between the fourth quarter of 2005 and the fourth quarter of 2009, the percentage of mortgages that were at least 60 days past due quadrupled from 1.10% to 4.71%.1 On the positive side, the delinquency rate declined during all four quarters of 2010. By the fourth quarter of 2010, the rate was down to 3.43%, which is still very high by historical standards.
• North Minneapolis and East St. Paul, like most areas of the state, experienced a decline in the number of loans at least 60 days past due.
• The biggest increases in post-sale/REO loans were concentrated in the outer ring of the metro area and counties further out, including Rice, Le Sueur, Sibley, McLeod, Renville, Meeker, Benton, Kanabec, and Pine.

The full report is available here.

Fannie Mae's 2010 National Housing Survey

Fannie Mae has released the findings of their latest National Housing Survey that polled homeowners and renters between October and December, 2010.

The Survey has some interesting facts and figures to digest:  

• 65% of Americans believe that it’s a good time to buy a home. This is almost unchanged from last January, but down five points (from 70%) that thought it was a good time to buy in June (2010).
• Just like last year… A large majority (78%) believe home prices have either bottomed or will rise over the next year. However, there have been price declines in most major markets throughout the U.S. over the past year (including here in Minnesota), meaning 78% of people polled in 2010 were wrong.
• The percentage of those polled who believe buying a home is a safe investment has fallen six points to just 64 percent since last January’s report.

The Center believes that potential homebuyers should ALWAYS be cautious when buying their first home – and be VERY careful when hearing things like “Now is a good time to buy!” and “Housing is a safe investment!”… the “Crowd” may not aways be right.


When renters were asked why they wouldn’t purchase a home… their responses are revealing:

• The #1 reason cited, by almost half of the respondents, was that they believe their credit was not good enough to obtain a mortgage.
• In addition, the #2 reason, cited by 47% (multiple answers were allowed)… was that they don’t think they can afford both a mortgage and the upkeep of a home.

While the Center applauds renters that approach the idea of homeownership cautiously… there is a way to KNOW if your credit is good enough… and KNOW exactly how much you can afford to purchase – or if purchasing a home is even a good fit for you: We recommend you take a homebuyer workshop! In Minnesota, the state's premier homebuyer (pre-purchase) education curriculum is known as Home Stretch. To learn more about Home Stretch, and other services for homebuyers, visit the Center's website here.

For more information about the National Housing Survey and to see the complete report, visit Fannie Mae's website, here.  

EMHI Lunch & Learn at the Federal Reserve Bank in Minneapolis

The Minnesota Home Ownership Center is pleased to announce that the Federal Reserve Bank of Minneapolis will be hosting an upcoming luncheon training on:

The impact of, and response to, industry forces on homeownership in Emerging Markets

Speakers at the "Lunch & Learn" will include the President of the Federal Reserve Bank of Minneapolis, Narayana Kocherlakota, and Shana M. Ford, M&I Bank Vice-President and Branch Manager for the MN Region on Diversity & inclusion.

Tuesday, April 5th 11am – 1pm
Federal Reserve Bank of Minneapolis

 



EMHI, the Emerging Markets Homeownership Initiative, is a program of the Minnesota Home Ownership Center designed to increase homeownership opportunities for Minnesota’s emerging markets. The program grew out of the state’s EMHI business plan launched by Governor Pawlenty in 2004.  The goal of EMHI is to promote parity in homeownership rates among Minnesota's diverse populations.  For more information about EMHI or EMHI programming, visit the MN Home Ownership Center's website, here. 

Foreclosure Prevention Counseling Works in Minnesota!

The Minnesota Home Ownership Center has released its “2010 Foreclosure Counseling Program Report” that shows that over 12,000 homeowners sought the foreclosure avoidance services of the Homeownership Advisors Network in 2010 and more than half of all homeowners were able to avoid the foreclosure of their home.

At a time when several national news reports are criticizing the effectiveness of foreclosure intervention and loan modification programs, Minnesota once again breaks the trend! No other foreclosure avoidance program in the country can rival Minnesota’s success.

“Counseling services through our statewide network of nonprofit partners are providing meaningful outcomes for communities, lenders, local governments, and most importantly, Minnesota families,” said Julie Gugin, the Center’s Executive Director “We are pleased to report that more than 5,500 families remain in their homes today because of our counselors’ work.”

The report also provides a glimpse into the demographic and financial circumstances of struggling homeowners who sought help from mortgage counselors:
 


Click To Enlarge: The Face of Foreclosure in Minnesota


A PDF of the Infographic is available here.


According to the experiences of those seeking counseling in 2010, personal, mortgage and financial struggles are converging on many homeowners in Minnesota. The experiences reported by owners offer insights, such as:

• Homeowners are balancing mortgages on less income. The majority of homeowners seeking help faced either a reduction in income (35%) or a total loss of income (25%) since first taking out their mortgage.
• Mortgages have become unaffordable for many. Almost two-thirds of homeowners seeking counseling dedicated more than 30% of their monthly income to their mortgage – a recognized standard of an unaffordable mortgage. 24% of homeowners reported dedicating more than half of their income to their mortgage payment.

Minnesota experienced over 25,000 foreclosures in 2010 and this rate of foreclosure is expected to continue into 2011. As Minnesotans struggle with their finances amid current economic conditions, the Minnesota Home Ownership Center will continue providing free counseling and support to homeowners seeking help in managing their mortgage. The services are available for free through members of the Homeownership Advisors Network.

If you, or someone you know is struggling with their mortgage, you can connect with your local housing counseling agency here.

Payment Changes With a Fixed-Rate Mortgage

I have a fixed-rate mortgage... but my payment just went up.  How can that be?

This is one of the most common questions the Center receives from recent homebuyers who are wondering what's happening...

• Are they being taken advantage of by their lender?
• Has their loan been confused with someone elses?
• Did they sign the wrong paperwork at closing? 

Using the "Ask A Question" form on the Center's website... several homeowners asked this question, leading us to create a video podcast of the possible answers:

This short video, just six minutes long, gives an overview of how a monthly mortgage payment can change - even if someone has a fixed-rate mortgage.

This is the kind of information that is covered, in-depth, in the Home Stretch workshop.  If you're thinking about buying your first home, think Home Stretch first.

If you've already bought your home... and have a question about your mortgage or your payment, feel free to contact a local housing counselor today!

Affordability: Wages and Prices

 This post is a guest post by Laura Hodges, AmeriCorps Member
with the MN Home Ownership Center:



Click To Enlarge
(c) inspidlife (Used Under Creative Commons License)
http://www.flickr.com/photos/soaptrail/


Can you believe we are here in 2011... three years into the worst financial crisis since the Great Depression! Last week a glimmer of hope was announced that joblessness dropped to 9%- the lowest in 2 years.

Although this news inspires hope, many times the national statistics don’t include local information – a community-by-community breakdown - which can led to some people feeling that the lack of sustainable housing and wages isn’t trickling down to their communities. But now there is an interactive, online tool that shares all of this information.

As you may know the Center’s commitment to successful home ownership is demonstrated in many ways including sharing relevant training for the Homeownership Advisors Network, and keeping updated on legislative issues that affect homeownership. As another show of this continued commitment Center staff attended the sponsored by the Minnesota Housing Partnership (MHP), Housing Policy Showcase on January 28th. Presenters included Mary Tingerthal, Minnesota Housing Commissioner, who spoke about her commitment to have Minnesota be a national leader on housing related issues, and Leigh Rosenberg, MHP Manager of Research and Outreach who presented on the connection between housing and wages.

Leigh also launched a valuable new tool that has been developed by MHP that gives a breakdown of housing and wages for every legislative district in Minnesota.

Follow the link and look for your district, and let us know how your district is doing…. http://mhponline.org/policy/policystate/legislative-district-profiles  

If you’re not sure which legislative district you live in, click here.

-- -- -- -- -- --

If you'd like to communicate with Laura, she can be reached via email, here.

What does your home of the future look like?



(Click To Enlarge)

Where do you want to live when you grow older? 

For most of us, the answer is "at home." A new exhibition that opens on February 5th at the Goldstein Museum of Design looks at what a future “home” may look like as the population ages, and more of us decide we want to “age in place”.

The “Smart House, Livable Community, Your Future” exhibition, hosted by Housing Studies professor, and MN Home Ownership Center Board Member, Marilyn Bruin and Masters student Jodene Riha will explore the development of new products, technologies and design elements that will allow people to stay in their homes longer as they age.

The exhibition actually walks you through a home inhabited by fictional, 65-ish homeowners, Jim and Sarah, who have recently renovated their 1960s home so that they can continue to enjoy their active, engaged lifestyle. Visitors are actually encouraged to try out (hands-on) all of the items in the home.  Visitors can sit in a power-lifted chair, handle easy-to-use-kitchen utensils, scoot around the kitchen on a wheeled chair to try out lower counters, operate an easy-open window, sit in a fully-adjustable desk chair at an ergonomically-designed desk, and observe wall colors and lighting that ameliorate the impact of changing vision. The bath will feature a walk-in shower and reinforced wall for grab bars. Visitors will learn about a Fall Guard alert system, auto-dispensers for medications, special environmental controls, and tools and technologies that allow Jim and Sarah to do the activities they enjoy and keep them connected to the world.

The exhibition runs from February 5th through May 22nd, 2011. There is an opening party being held on Friday, February 4th from 6-8pm at 241 McNeal Hall, 1985 Buford Avenue in St. Paul. For additional information, visit the Goldstein Museum of Design website here.

NEO: The Matrices Have Been Updated

The Minnesota Home Ownership Center strives to provide information and resources that will assist Minnesotans begin, and maintain, home ownership. 

In November of 2009 we introduced our "Entry Cost Assistance Matrix" that outlines the down payment programs, closing costs assistance and other funds available to first-time buyers in Minnesota. We've now updated the Matrix for the first quarter of 2011! To view the most recent version of the matrix, click here.

The Matrix is organized geographically, which allows readers to quickly find the area of the state that they are most interested in.

As a quick reminder, funding for down-payment assistance and entry-cost help is FLUID. The information may change. Please contact a program administrator to see if funds are available, and, if not, if there is a waiting list that you or your client can use to access funds in the future.

In addition, the Center has also updated its "Affordable Loan Product matrix".   The Affordable Loan Product Matrix is designed to inform housing counselors and industry professionals of affordable mortgage loans and programs available to their clients.

Home ownership is expensive and first-time buyers should never base their home-buying decision on a down-payment program or access to a specific mortgage. 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. For more information, click here.

Pre-Foreclosure Notices Increase 8% in 2010

The Minnesota Home Ownership Center has compiled the pre-foreclosure notices received by the Homeownership Advisors Network (statewide network of housing counseling agencies) through the end of 2010 and the numbers continue to show that Minnesota households are struggling with mortgage payments even as other signs point to an overall improved economy.

For the year, the number of pre-foreclosure notices issued by foreclosing entities statewide increased 8% (Eight Percent) in 2010 over 2009, from 66,570 to 71,665. In the Twin Cities metro area, the number of notices received increased by 1,334, a 3% increase over 2009.

Homeowners in Greater Minnesota seem to be struggling more, as the number of pre-foreclosure notices issued increased FIFTEEN PERCENT. 3,761 more households received notice in 2010 (28,522) than in 2009 (24,761).

On a brighter note, the rate of increase has slowed and in the Twin Cities the trend has almost leveled off. Whether this signals a possible decline in pre-foreclosure notices to be received in 2011 remains to be seen.

Minnesota households received a total of 71,665 notices in 2010:

(Click To Enlarge)

Here's the breakdown for the number of pre-foreclosure notices received by members of the Homeownership Advisors Network in the 7-County Metro Area:

(Click To Enlarge)

However, the rate of increase appears to be slowing, especially in the Twin Cities Metro:

(Click To Enlarge)

(Click To Enlarge)

The overall numbers make it hard to forecast anything but continued foreclosure activity and continued struggles for Minnesota families.


Minnesota State law (MN Statute 580.021) requires that the foreclosing party provide information regarding foreclosure prevention counseling services to the mortgagee (homeowner) AND provide the homeowner’s name, address, and most recent known telephone number to an approved member of the Homeownership Advisors Network- BEFORE filing the notice of pendency.

As always... if you, or someone you know, is struggling with your mortgage payments - or think you might fall behind soon - don't wait! There is a network of non-profit agencies that can help. Contact them today. For additional information about foreclosure prevention in Minnesota - visit the Center's foreclosure prevention resource page here.

Mortgage Success: Does the Bank Matter?

New study from Ohio State University finds banking locally can impact mortgage success.

Researchers from the John Glenn School of Public Affairs at Ohio State University have found that low-income homeowners who received a mortgage from a local lender were less likely to default on their loans than those homeowners who borrowed from a more distant bank or mortgage company, even when these borrowers received the same type of mortgage product.

The researchers studied loan performance of more than 20,000 homebuyers who purchased homes AFTER the foreclosure crisis began (between 2005 and 2008). They examined the location of bank branches relative to where the homebuyers purchased their homes and found that higher-risk homebuyers with loans from banks with branches close to their new homes (less than 10 miles) were significantly less likely to default on their mortgages.

Can a personal relationship affect loan repayment?

As with large, non-local banks and many mortgage brokers, most local lenders base their lending decision on ‘the numbers’ like credit scores. HOWEVER, many local lenders place more weight on other factors, such as length of current employment, and whether you make regular deposits in a savings account.

“This kind of information may give a more complete picture of whether a person can really afford a mortgage, particularly for higher-risk borrowers,” said Stephanie Moulton, one of the researchers from Ohio State University.

“Some of the local bankers told me they won’t even look at a credit score until they have talked to an individual and determined if they think he or she can make the payments.”, she added.

The researchers believe that if there’s an existing business/personal relationship, the borrower may feel more obligated to make their payments, and the banks may provide more education and information to the borrowers, equipping them to be better homeowners.

The Minnesota Home Ownership Center truly believes that arming potential homebuyers with the ‘education and information’ that Moulton mentions is THE KEY to long-term successful homeownership. There is an entire chapter of the Home Stretch curriculum dedicated to helping potential homeowners navigate the mortgage loan process… including how to choose a lender and a loan product. For more information, visit the MN Home Ownership Center’s website, here.

$600k For Housing Counseling

Homeownership Advisor Network Members Receive almost $600k in HUD Grants

The Minnesota Home Ownership congratulates members of the Homeownership Advisors Network who have received over $638k in funding from the U.S. Department of Housing and Urban Development (HUD). These funds will support the delivery of a wide variety of housing counseling services to help individuals and families in Minnesota improve their access to affordable housing, expand their homeownership opportunities, and avoid foreclosure and foreclosure rescue scams.

HUD Secretary Shaun Donovan stated, “Now, more than ever, it’s crucial that we support these agencies that are working with struggling families on a one-to-one basis to manage their money, navigate the home-buying process, and secure their financial futures.”

In Minnesota, the distribution of these funds will support:

ANOKA COUNTY COMMUNITY ACTION PROGRAM, INC (Blaine), $37,949.74
ARROWHEAD ECONOMIC OPPORTUNITY AGENCY, INC. (Virginia), $41,391.11
CARVER COUNTY COMMNITY DEVELOPMENT AGENCY (Chaska), $39,916.24
COMMUNITY ACTION DULUTH, $41,882.73
DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY (Eagan), $61,882.73
LUTHERAN SOCIAL SERVICES/ CCCS OF DULUTH, $110,899.48
REVERSE MORTGAGE COUNSELORS, INC (St. Paul), $35,983.25
SAINT PAUL DEPARTMENT OF PLANNING AND ECONOMIC DEVELOPMENT, $89,832.47
TRI-COUNTY ACTION PROGRAM, INC. (Waite Park), $35,000.00
TWIN CITIES HABITAT FOR HUMANITY (Minneapolis), $35,500.00
WASHINGTON COUNTY HOUSING AND REDEVELOPMENT AUTHORITY (St. Paul Park), $62,865.98


Over $150k of the grant awards listed above were granted as Mortgage Modification and Mortgage Scams Assistance dollars that will be used by organizations to provide homeowners information about fair lending abuses and mortgage ‘rescue’ scams. Ed Nelson, spokesman for the Minnesota Home Ownership Center stated, “These funds will go a long way to helping the counseling agencies spread the word about dangerous, and costly, foreclosure rescue scams in Minnesota.”

The Homeownership Advisors Network is the State of Minnesota’s premier network of housing counseling agencies and is supported by the Minnesota Home Ownership Center. Members of the Homeownership Advisors Network are highly trained, certified professionals that provide advice and guidance for Minnesota families as they struggle to find and maintain stable housing.

For more information about the Homeownership Advisors Network or the statewide media campaign known as “Look Before You Leap” that continues to warn Minnesota homeowners to be on the lookout for foreclosure rescue scams, visit the Minnesota Home Ownership Center’s website at www.hocmn.org

In addition to the funds listed above granted to members of the Homeownership Advisors Network, other organizations in MN also received HUD grants:

CATHOLIC CHARITIES DIOCESE OF ST. CLOUD, $44,340.85
SOUTHERN MINNESOTA REGIONAL LEGAL SERVICES, INC. (St. Paul) 45,324
HOUSING PRESERVATION FOUNDATION (Supports National Network) $2.4mm

Stopping Foreclosure Scams: New FTC Rules Take Effect Today

Beginning today, homeowners in Minnesota and nationwide are benefiting from the Federal Trade Commission (FTC)'s new consumer protection rules aimed at stopping foreclosure rescue scams. The Mortgage Assistance Relief Services Rule (MARS) bans companies from making false promises in their marketing and, beginning Jan. 31, prohibiting them from charging any up-front fees for their services.

We are all well aware that these terrible scams are robbing homeowners of their savings, their home, or sometimes both. This new Rule will further our fight to end foreclosure rescue scams in Minnesota by giving the FTC the tools needed to crack down on scamming companies across the country - companies that are targeting homeowners in our state.

In addition, MARS requires mortgage modification companies to disclose key information to consumers, including:

• They must explicitly state that they are not associated with the government, and their services have not been approved by the government or the consumer’s lender;
• The lender may not agree to change the consumer’s loan; and
• If companies tell consumers to stop paying their mortgage, they must also tell them that they could lose their home and damage their credit rating as a result of this action.

For additional information about the new rules, and what it means for Minnesota homeowners, see our full press release, here.

While the new FTC Rule is an enormous consumer protection victory, homeowners still must be armed with information to recognize these scams and to protect their homes. That's why the Minnesota Home Ownership Center has created a brochure-size, two-sided consumer education piece for you to share with your networks and consumers. It equips homeowners with simple questions to ask themselves when considering outside help for a mortgage modification, and it directs them to www.LookBeforeYouLeap.org to connect with a counselor in their community.

Order Look Before You Leap Consumer Handouts Today!

Help us help Minnesota homeowners - commit to displaying this piece today! The consumer handout is the perfect size for brochure and information racks, tabling events, or including in utility bills or other mailings. We have produced materials in both English and Spanish. And, we'll provide you copies free of charge!  Visit the campaign website: www.LookBeforeYouLeap.org to download and submit an order form.

Foreclosure Counseling Proven Effective - Again

Back in November of 2009, the Washington Post had a headline proclaiming: "Counseling Helps Borrowers Avoid Foreclosure," citing a report of a study conducted by the Urban Institute of Washington D.C.

Now, thanks to a new report from NeighborWorks America on the "National Foreclosure Mitigation Counseling Program Evaluation: Preliminary Analysis of Program Effects," we can once again state that COUNSELING WORKS.

The National Foreclosure Mitigation Counseling (NFMC) program is a federally-funded program that is designed to support the rapid expansion of foreclosure intervention counseling in response to the nationwide foreclosure crisis.  MN Housing (Finance Agency) has been a recipient of NFMC funds... that support the work of the MN Home Ownership Center's network of non-profit Foreclosure Counselors.

The analysis presented in the report is based on a sample of close to 180,000 loans held by homeowners that received NFMC-funded foreclosure prevention counseling.  Here are just some of the findings:

• The NFMC program was effective at helping homeowners cure an existing foreclosure. During the first two years of the program, the relative odds of counseled homeowners curing their foreclosure were 1.7 times greater than if they had not received NFMC counseling. The resulting difference in the cure rate means that an estimated 32,000 more NFMC clients cured their foreclosure by the end of December 2009 than would have occurred without receiving services from NFMC counselors.
• Loan modifications received by NFMC clients resulted in significantly lower monthly mortgage payments than would have been received without the help of the program. Lower monthly payments may help reduce the likelihood of a subsequent recurrence of borrower mortgage problems. On average, we estimated that NFMC clients who received loan modifications in the first two program years reduced their monthly payments by $267 more than they would have without NFMC counseling.
• Homeowners who obtained a loan modification that allowed them to cure an existing serious delinquency or foreclosure were much more likely to remain current on their mortgage if their loan modification was obtained with help from NFMC counseling. For clients counseled in 2008, counseling produced a 45 percent increase in the relative odds that a post-counseling modification would be sustained through 2009.

 
There are many more advantages to Foreclosure Counseling cited in the full report.
 
Here in Minnesota, research conducted by the Federal Reserve Bank of Minneapolis showed that Foreclosure Counseling cost just under $400 per household -  $400 to save homeowners an additional $3,204 per year, improve their odds of curing foreclosure and increase the long-term success of a modification... plus many other 'intangible' benefits... seems like Foreclosure Counseling is a great investment in long-term housing stability for MN Families.
 
If you or someone you know is struggling with mortgage payments, help is available.  Visit the MN Home Ownership Center's website for more information.

Shopping For A Mortgage

According to a LendingTree/Harris Interactive survey released on December 14th, about 40% of recent home buyers obtained JUST ONE mortgage loan quote before purchasing their home.

According to the survey of just over 1,300 buyers, 70 percent of borrowers find shopping for a mortgage frustrating, citing the complexity of the terms as the number one reason people choose not to 'mortgage shop'.

The survey also reveals that although buyers recognize that their mortgage choice is a decision that will affect them financially for the next 15 – 30 years (or more!), nearly three-quarters (72 percent) of homeowners spent less than eight hours shopping for their home loan. Even more shocking? One in ten spent less than TWO MINUTES shopping for their loan.

In Minnesota... buyers have the opportunity to take a Home Stretch workshop, the homebuyer workshop recognized nationally as a proven tool to prepare homebuyers to be successful homeowners.  There is an entire section of the Home Stretch workshop dedicated to fully understanding mortgage loan terminology, how to shop for a loan, how credit affects loan payments and how to avoid being taken advantage of when choosing a loan.

In a forthcoming report from the MN Home Ownership Center, Home Stretch participants reported that help with understanding mortgages and the loan process was the MOST HELPFUL part of the workshop.  One more fact (just in case you're not convinced yet)... NINETY-FIVE PERCENT of Home Stretch participants reported that their participation in Home Stretch will help in the process of buying a home.

Are you thinking of purchasing a home in Minnesota?  You can learn more about the mortgage loan process - - and the entire home buying process by taking a Home Stretch workshop.  For more information, click here.

Update on Minnesota's Homeownership Gap

This post is a guest post by Dr. Kim Skobba, a research and communications consultant that works with the Minnesota Home Ownership Center on Affordable Housing issues and housing policy.  Dr. Skobba publishes her own blog at http://housing-sense.blogspot.com/

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Update on Minnesota's Homeownership Gap

At 73.7%, Minnesota maintains the highest overall homeownership rate in the nation. When it comes to the rate of homeowners of color, Minnesota does not fare as well. The rate of homeownership among emerging markets is 43.3% - representing the 5th largest gap in homeownership rates in the nation.

[Last] week at the EMHI Summit, Michael Grover (Federal Reserve Bank of Minneapolis) and John Patterson (Minnesota Housing) provided a summary of their research on trends in emerging market homeownership. Their analysis of American Community Survey and Home Mortgage Disclosure Act (HMDA) data identifies some apparent trends and offers a few unexpected findings.

• The rate of emerging market homeownership declined for the first time since 2000. The rate of homeownership among emerging markets held relatively steady (at about 46.5%) during 2006-2008, which was surprising given the foreclosure crisis and what is known about its affect on minority homeowners. In 2009, the emerging market homeownership rate declined to 43.3%.
• Some sub-groups of African Americans experienced particularly significant declines in their rates of homeownership. Those in the 45 to 54 age group saw a decline from 46% to 31% and those with a family income between $40,000 - $60,000 experienced a decline from a rate of 57% to 32%. Grover stated that more analysis is needed to make sense of these changes.
• Minnesota Housing's affordable loan and entry cost assistance programs are helping emerging markets buyers. In 2009, nearly one-third of Minnesota Housing's loan originations were to emerging market buyers, compared to 10.9% in the overall market.
• Subprime lending among emerging markets is on the decline. The rates of subprime lending (purchase and refinance) dropped from a high of over 40% in 2006 to well below 10% in 2009. Not much of a surprise but good news nonetheless.

The Emerging Markets Homeownership Initiative (EMHI) Summit is an annual event hosted by the Minnesota Home Ownership Center. This year's summit provided the opportunity to learn about the status of emerging market homeownership and some of the current issues facing emerging market homebuyers. Materials from this year's EMHI Summit (including the Grover and Patterson presentation) are available on the Center's EMHI webpage.

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This post was originally published on Dr. Skobba's blog: here.
Reposted with permission.

Filling the Foreclosure Funding Gap

The Good News:
Minnesota Housing announced a $1 million award to the Minnesota Home Ownership Center yesterday during a press conference held at a foreclosed property on Saint Paul’s east side. The award comes at a critical time when federal funding gaps threaten the ongoing work of 74 counselors across the state.

Coverage of the press conference can be seen here (Fox-9), here (Finance & Commerce) and here (MPR).
UPDATE: Star Tribune has also covered us: here.

“We’ve come too far and invested too much in foreclosure prevention across the state to let this funding gap damage our efforts and the infrastructure we’ve built together,” said Dan Bartholomay, Commissioner of Minnesota Housing. “Minnesota has benefited from a strong, statewide network of foreclosure counseling agencies, counseling nearly 16,000 households in 2009, and we’re here today to make sure that continues.”

Here's the situation... the foreclosure counseling network in Minnesota faces an immediate threat to the provision of services, even while facing continued, and in some areas, increased, demand foreclosure prevention counseling. Current funding has been exhausted and the next round of federal funding will not be available until March 2011, pending congressional authorization.

“Minnesota Housing has demonstrated outstanding leadership throughout this prolonged foreclosure crisis,” added Julie Gugin, Executive Director of the Minnesota Home Ownership Center. “Their latest contribution will help ensure that tens of thousands of Minnesotans have access to quality, nonbiased services that will help them avoid foreclosure. Their partnership is critical to stabilizing housing and communities throughout Minnesota.”

With this $1 million award, the Minnesota Home Ownership Center is prepared to work directly with counseling organizations to continue services.

The Bad News:
Center staff has calculated that it will take just over Five Million dollars to cover the cost of maintaining foreclosure counseling services in the state of Minnesota at current levels through the end of 2011.  We'll keep you informed about the fundraising process - and its impact on the counseling network over the coming months. 
 
For now... services will continue without interruption and MN Homeowners that are struggling with their mortgage payments - or think they may have difficulty making payments soon, should contact a non-profit (FREE!) foreclosure counselor TODAY.