Mortgage Payments and Duluth Flooding

The Minnesota Homeownership Center has received word that Wells Fargo Home Mortgage has established a process to help homeowners that are dealing with the after-effects of the devastating flooding from last week's rain in Duluth.


Wells is offering up to a 45-day moratorium on loan accounts - provided homeowners notify them that they have been impacted by the flooding.  According the Wells, the moratorium stops all payments, reporting to credit bureaus, late fees, collections and any foreclosure action.


What should Wells Fargo Home Mortgage clients do if they've been affected by the flooding?  There are two options:

1. Homeowners can call a specialized customer service agent at 1-888-818-9147.  These agents can assist customers with a forbearance or workout plan if needed. They also assist with any insurance questions or claims. 
2. Customers can visit the "Getting Disaster Assistance" page on the Wells Fargo Website.  This page highlights the disaster assistance hotline and other ways Wells can help customers with claims questions or payment options.

In addition, homeowners affected by the flooding should also contact a member of the Homeownership Advisors Network if they are find themselves struggling with payments due to the flooding... or need other assistance with finding reputable help to rebuild.  For Duluth, homeowners should contact 1 Roof Community Housing.


We'll update this post, and others, as we learn what other lenders, servicers and mortgage insurers are doing to help their clients recover from the flooding.

Foreclosure Review Deadline Extension and Details Released

The Office of the Comptroller of the Currency (OCC), one of the Federal regulators that took enforcement action against large residential mortgage servicers for unsafe and unsound practices related to residential mortgage loan servicing and foreclosure processing, announced today that they have extended the deadline for borrowers to request an Independent Foreclosure Review (IFR) until September 30^th, 2012.

This announcement is so new that as of today, even the official IFR website still states that the deadline is July 31^st.

More importantly, the OCC and the Fed have released a “Financial Remediation Framework” document which outlines the possible remedies borrowers can expect to receive - and the financial compensation they may be eligible for - as a result of the IFR process.

For months, consumers and their advocates have asked us - why bother??  And now the answer is clear... the financial 'remedy' consumers may receive if the independent review finds that their lender committed an error in their foreclosure process can be SUBSTANTIAL - - Up to $125,000 plus equity losses!

For additional information about IFR... view our past blog posts here and here.

If you were in the foreclosure process in 2009 or 2010... don't let this opportunity slip by.  Contact us today to learn more.

Preforeclosure Notices Continue Downward Trend

Special thanks to Aaron Dickinson for reminding us that we hadn’t released our first quarter pre-foreclosure data.  THANKS AARON!

On  Thursday, June 7th, the Minnesota Homeownership Center released its data on the aggregate number of Preforeclosure Notices received by foreclosure counselors in the Homeownership Advisors Network for the first quarter of 2012 (January through March).  The numbers, while increasing slightly from Q4 2011, show that the number of struggling households in Minnesota continues its downward trend. 

In the first quarter of 2012, members of the Homeownership Advisors Network received 12,106 preforeclosure notices, up very slightly (.75%) from Q4 2011, but 17% fewer than during the same time period in 2011:

Click To Enlarge

Encouragingly, the number of pre-foreclosure notices is down in every area of the state… except for two areas that seem to have bucked the downward trend.  We’ll continue to monitor these two areas to see if this is a trend… or just an anomaly:

• Scott & Carver Counties reported an increase of 7% (From 558 to 599 notifications); and
• Wilkin & Clay Counties reported a 40% increase – although small numeric changes in this area can show large variations in the percentage (40 households received a notice in Q1 2011, while 56 households received a notification in Q1 2012). 

While these numbers are encouraging, there were still over 12,000 households that received a preforeclosure notice in the first quarter of 2011:

Click To Enlarge

Here's the breakdown for the number of preforeclosure notices received by members of the Homeownership Advisors Network in the 7-county metro area:

Click To Enlarge

As background, Minnesota state law (MN Statute 580.021) requires that the foreclosing party provide information regarding foreclosure prevention counseling services to the mortgagor (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 Homeownership Center's network of foreclosure counselors receives 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.


Most importantly, if you or someone you know is struggling with their mortgage payment, new programs, resources and assistance are becoming available all the time. Don’t give up… contact a foreclosure counselor that is a member of the Homeownership Advisors Network today to see if there’s help available for you to avoid foreclosure. Even if you’re not yet behind, now is the time to call. To find your local foreclosure counselor, click here.

HAMP Changes Take Effect Friday June 1

Effective Friday, June 1, 2012 HAMP “Tier 2”  -  which many people have simply referred to as HAMP 2.0  -  will roll out for the Making Home Affordable (MHA) loan modification program.  Like many MHA updates, these changes apply to non-GSE mortgages. 

The goal of HAMP 'Tier 2' is to increase eligibility for homeowners, including:

• those who did not meet the original HAMP guidelines,
• those who may have failed on a HAMP modification, or 
• those who own rental properties.

With HAMP 'Tier 2', many of the initial qualification criteria are still in place:

• loan must have been originated before January 1, 2009, 
• homeowner must be able to document a financial hardship;
• Only loans on properties with one-four units can be modified;
• there is a maximum outstanding loan amount (maximum unpaid principal balance.

But now, a borrower may also be considered for HAMP 'Tier 2' if any of the following also apply:

• they did not successfully complete (defaulted on) a HAMP 'Tier 1' modification;
• their monthly mortgage payment is below the minimum 31 percent front end Debt-To-Income ratio;
• and, most controversially, up to three seperate mortgages may be modified if they secure rental properties

No mortgage loan may be modified more than once in either Tier 1 or Tier 2. 

People interested in learning more about the HAMP program and the new 'Tier 2' changes, can visit the Making Home Affordable website, here.

The Homeownership Advisors Network will continue to focus its attention on helping owner-occupants avoid foreclosure, but may be able to answer some basic questions for rental property owners as well.

HAMP, HAMP 2.0, DTI, VPN, HARP, MHA, GSE... the 'alphabet-soup' of programs, agencies and programs can be overwhelming for struggling homeowners.  In Minnesota, there is a FREE, effective resource available: The Homeownership Advisors Network.  Trained and certified foreclosure prevention experts can work with YOU to find a solution to YOUR mortgage issues.  Don't delay, contact an advisor by visiting the Center's website today.

New Partnership Simplifies Finding Down Payment Help in Minnesota

The Minnesota Homeownership Center is proud to announce a new partnership with Down Payment Resource, the first web-based down payment assistance search tool to help both home buyers and Real Estate professionals seeking down payment and entry-cost assistance programs in Minnesota!

Beginning today,  the Center will offer direct access to Down Payment Resource through our website, and use our local expertise and existing partnerships to ensure the ongoing integrity of Minnesota-specific program information within the service.


REALTORS™ and other real estate professionals: imagine being able to print out a list of all possible down-payment and entry cost assistance programs to use as a handout at your open houses... or in your Buyers' Packets.  You can!  Visit the Center's website for a link to the new tool as well as other tools the Center has that can help YOU as you assist clients on their road to successful and sustainable homeownership.



Here are links to a couple of testimonials of the service... one from the perspective of a homebuyer, and one from the perspective of a REALTOR™ that uses the system to promote her listings and help her clients.


This is not Down Payment Resource's (DPR) first partnership in Minnesota... nearly two years ago, DPR began working with the NorthstarMLS which became the first MLS in the country to offer links to the DPR service. DPR aggregates down payment assistance information into its online platform and integrates that information into the NorthstarMLS (and other MLS systems throughout the country).  The tool helps connect eligible homebuyers and eligible properties with assistance, bridging the down payment gap for homebuyers, as well as moving real estate transactions forward in a difficult lending environment.

Many first-time buyers are unaware that they may qualify for down payment or other assistance programs in Minnesota.  It can be especially challenging to understand the requirements, benefits and application process for multiple programs.  This new partnership combines the Center's focus on sustainable homeownership through education and outreach with the content-rich and easy-to-use online platform from DPR.  Consumers that are looking for additional information about homeownership or any of the assistance programs, are connected to the FREE non-profit counseling services available through the Homeownership Advisors Network directly from the system.

Here's what DPR has to say about the partnership (from our press release): 
“We are thrilled to work alongside partners that share our goal of empowering consumers with information on down payment and closing cost assistance," said Rob Chrane, president of Workforce Resource. "The Minnesota Homeownership Center's leadership in housing, statewide expertise and relationships across Minnesota with affordable housing stakeholders will help increase program awareness across the state."

We're excited to be working with Workforce Resource / DPR too!


Have you used the system (either through the current arrangement with the NorthstarMLS or the new tool)? Let us know in the comments!

Postcard: Independent Foreclosure Review

Did you receive a postcard about the Independent Foreclosure Review?


The Minnesota Homeownership Center and members of the Homeownership Advisors Network have participated in a mailing to thousands of Minnesota families that may have been involved in a foreclosure or tried to work on a loan modification in 2009 or 2010, to let them know that they may be eligible for financial compensation or another remedy.


Here's a copy of the postcards that have been mailed:

Front of Postcard - Click to Enlarge

Back of Postcard - Click to Enlarge

While the Center doesn't have exact numbers... we do know that homeowners, or former homeowners, requesting a formal review of their bank's foreclosure procedures have been far less than the regulators anticipated.  In a nutshell: families that may be eligible for some sort of payment may be leaving money on the table.


WHAT IS THE INDEPENDENT FORECLOSURE REVIEW (IFR)?
Federal banking regulators (the Office of the Comptroller of the Currency, simply known as the OCC, the Office of Thrift Supervision and the Board of Governors of the Federal Reserve System have created a process by which homeowners may request an independent review of their foreclosure process if they meet two major criteria:

1. They were part of a foreclosure action on their primary residence any time from January 1, 2009 to December 31, 2010;
2. Their loan was serviced by one of the 14 participating mortgage servicers.  (See list below).

If the review finds that financial injury occurred because of the servicer’s errors, misrepresentations or other deficiencies in the foreclosure process, the customer may receive compensation or other remedy.

NOTE:  "Foreclosure Action" can mean anything from receiving a notice of intent to foreclose (even if your payments were brought up to date) all the way through having lost the home at a foreclosure or Sheriff's sale.  Even homeowners whose loan entered any point of the foreclosure process in 2009 or 2010... and are still delinquent, but the Sheriff's sale has not yet taken place, are eligible.

IS IFR A SCAM?
NO.  However it is important to remember that NO ONE should charge you a fee to help 'facilitate' or 'improve your odds' of receiving compensation.  NEVER PAY FOR HELP.


I'VE ALREADY FILED A COMPLAINT WITH MY LENDER... IS THAT ENOUGH?
No.  Your bank or servicer may have their own internal review process.  However, if your mortgage loan meets the initial eligibility criteria, you should submit a Request for Review Form to ensure your foreclosure action is included in the Independent Foreclosure Review process.


WHAT BANKS/SERVICERS ARE PARTICIPATING?
Your mortgage must have been serviced by one of the 14 participating mortgage lenders/servicers or their affiliates:

• America’s Servicing Co.
• Aurora Loan Services
• BAC Home Loans Servicing
• Bank of America
• Beneficial
• Chase
• Citibank
• CitiFinancial
• CitiMortgage
• Countrywide
• EMC
• EverBank/EverHome
• Mortgage Company
• Financial Freedom
• GMAC Mortgage
• HFC
• HSBC
• IndyMac Mortgage Services
• MetLife Bank
• National City Mortgage
• PNC Mortgage
• Sovereign Bank
• SunTrust Mortgage
• U.S. Bank
• Wachovia Mortgage
• Washington Mutual (WaMu)
• Wells Fargo Bank, N.A.
• Wilshire Credit Corporation

I'M INTERESTED IN LEARNING MORE... WHAT DO I DO?


Step One:  Call the Minnesota Homeownership Center: 651-659-9336
or Toll Free: 866-462-6466 with any questions.


Step Two:  Visit the Independent Foreclosure Review website:

   www.IndependentForeclosureReview.com


As always... if you're struggling with your mortgage - or know someone who is - the Minnesota Homeownership Center serves as a FREE resource to Minnesota homeowners.  Call us today with questions about the Independent Foreclosure Review... or other programs, resources and assistance available to prevent foreclosure, TODAY. 

Manufactured Housing in Minnesota

New Fact Sheet Available!

Used Under Creative Commons License
Foto by Archerland2005

Manufactured homes (often called mobile homes) are built entirely in a factory and have a permanent structure that allows for them to be transported. The homes are usually placed on land owned by the homeowner or leased at a mobile home park.  Mobile home design and aesthetics have changed dramatically in the past few years and most no longer resemble the ‘trailer’ look of years past.  They can be an affordable housing option for Minnesotans, but there are some VERY important considerations to make before you decide to purchase a manufactured home.


For that reason, the Minnesota Homeownership Center has created a new Fact Sheet that covers:

•  Advantages and Disadvantages to purchasing a manufactured home
•  Living in a resident-owned or cooperative mobile home park
•  Financing the purchase of a manufactured home
•  Steps to take when purchasing

To view the complete fact sheet… and others that can help you in your goal of homeownership, visit the Center’s website, here.


As always the Center highly recommends that if you’re thinking of purchasing your first home in Minnesota, whether manufactured housing or traditional site-built housing, that you first make an appointment with a Homeownership Advisor (Housing Counselor) who will be able to work with you to create a plan to reach your goal of homeownership.  They’ll also help you understand your rights and responsibilities as a homeowner and make sure that you know about any down payment or entry-cost assistance programs you might be able to access.


The Minnesota Homeownership Center exists to promote and advance successful homeownership in Minnesota… speak with a Homeownership Advisor today so that YOU can be successful in the purchase of your first home.  Counseling services are FREE and confidential.

Mortgage Settlement Announced - What it Means for Minnesota

On February 9th, 2012, the Minnesota Attorney General’s office and the Department of Commerce announced that the State of Minnesota would be participating in the Federal Foreclosure settlement with five major lenders/servicers.  These five servicers have agreed to a $26 Billion dollar settlement, through which Minnesota borrowers may be eligible for up to $280 million.


The five lenders are: Ally/GMAC, Bank of America, Citi, JP Morgan Chase and Wells Fargo.  (Nine other servicers may sign on to the settlement later, we’ll update that information as it becomes available.)    It is important to note that loans owned or backed by Fannie Mae and Freddie Mac are not part of the settlement.  However, there are other programs and assistance available to some of these borrowers.  Click here for more information.


Additional information for homeowners interested in learning more about the settlement is available here: http://www.nationalmortgagesettlement.com/.  


REMEMBER:  DO NOT PAY FOR HELP.  No ‘agent’, ‘specialist’ or ANYONE should be charging you to ‘get access’ to the settlement.


WHAT DOES THE SETTLEMENT PROVIDE FOR MINNESOTA?  
Direct Payments to Borrowers.  Minnesota borrowers may qualify for financial compensation:

• Certain borrowers who lost their home to Sheriff’s Sale between the beginning of 2008 and the end of 2011, may be eligible for financial compensation of approximately $2,000* if they lost their home due to financial hardship AND 
• They were in the process of seeking a loan modification and the bank proceeded with the foreclosure anyway OR
• There were documented errors committed by the lender in the foreclosure process.

*The exact amount paid to homeowners will depend on the number of eligible borrowers who file a claim.


Refinancing Benefits. This part of the settlement allows underwater borrowers of mortgages owned by the five banks (as long as they are not backed by Fannie/Freddie) to refinance to a lower interest rate if they are current on their mortgage and have not had any late payments in the last 12 months.  The loan must have been originated prior to January 1, 2009, and have an interest rate of 5.25 percent or more. 


Principal Reductions and Other Relief. This part of the settlement will allow certain borrowers of loans owned, or in some cases serviced, by the five banks to qualify for:

• a principal reduction of their underwater mortgage and either 30 days late on the mortgage or who face ‘imminent default’;
• a forbearance  (set period of time with no mortgage payments) for unemployed borrowers, 
• short-sale assistance, 
• transitional housing assistance, 
• and other relief (details to be determined)

Beyond the financial relief and compensation outlined in the settlement, the five banks have also agreed to make substantial changes to their mortgaging and servicing standards including:

• Processing loan modification requests in less than 30 days
• Stopping the foreclosure process for homeowners who have a loan modification application pending (as long as the application is processed more than 15 days before the Sheriffs sale)
• Stopping the  foreclosure process completely for homeowners who are complying with a trial modification (either HAMP or the lenders’ in-house modification)
• Lenders must process requests for short sales (permission to sell the home for less than the outstanding mortgage loan amount) in less than 30 days.
• Lenders must assign a single point of contact to homeowners, or their foreclosure prevention counselor, who will be responsible for keeping the homeowner up to date with information about the loan, the modification process and any documentation needed.

WHAT HAPPENS NEXT?  HOW DO I APPLY?

• Over the next 30 to 60 days, settlement negotiators will be selecting an administrator to handle the logistics of the settlement and monitor compliance. 
• Over the next six to nine months, the settlement administrator, attorneys general and the mortgage servicers will work to identify homeowners eligible for the immediate cash payments, principal reductions and refinancing. Those eligible will receive letters directly from their lender/servicer.
• This settlement will be executed over the next three years. 

The exact details of how homeowners access the settlement are still being worked out.  There are steps you can be taking to make sure that you keep up to date with the settlement:

1. Contact a non-profit member of the Homeownership Advisors Network.  Foreclosure Counselors will know, as the details become available, the exact steps to take AS WELL AS know if you might qualify for any additional assistance or be able to access other programs to help prevent the foreclosure of your home.
2. Contact your lender.  If your mortgage is with one of the five current participants in the settlement, visit the National Mortgage Settlement website for links to the banks’ websites and contact telephone numbers.  

Even if your bank is not participating in the settlement, or they are, but your loan is backed by one of the Government Sponsored Entities, it is important that you take steps right away if you are struggling with your mortgage.  Contact a foreclosure counselor TODAY to learn about the WIDE ARRAY of programs, helps and assistance that are available to Minnesota homeowners.  Counseling is FREE and non-biased.  The sooner you call, the more options you have available, and remember, NEVER PAY FOR HELP!

Another New Refi Program? Get the Facts!

During the 2012 State of the Union Address, President Obama announced another expansion of the federal mortgage refinance program :

That's why I'm sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates. No more red tape. No more runaround from the banks. A small fee on the largest financial institutions will ensure that it won't add to the deficit, and will give banks that were rescued by taxpayers a chance to repay a deficit of trust. (From the State of the Union Address)

The current versions of the refinance program (HARP and HARP II) allow homeowners whose loans are owned by Fannie Mae, Freddie Mac or the Federal Housing Finance Agency, to refinance to current historically-low interest rates, EVEN IF the loan value exceeds the value of the home (allows "underwater" homeowners the opportunity to refinance).


On Wednesday, February 1st, the president released additional information about the proposed expansion of the refinance programs:


The proposed program (HARP 3?) would allow ALL homeowners who are current on their mortgage — even those who do not have loans backed by Fannie, Freddie or FHFA and even if they're  underwater on their mortgage — to also refinance their loans.


The proposal put forward by the administration includes some details about the who would qualify:

• only owner-occupied, single-family homes are eligible.
• Homeowners must be current on their mortgage and not had a lat payment for at least the past six months; 
• Homeowners must have a minimum FICO credit score of 580; 
• The loan amount cannot exceed the current federal conforming loan limit. 

For those who meet the criteria, the program would allow for a streamlined application process in which lenders would only need to confirm that a homeowner is employed and the home would not have to be appraised.


NOW... What does this REALLY mean for the average Minnesota Homeowner who might want to refinance?

• Even though HARP II was announced in October of 2011, as of early February 2012, very few lenders and servicers have processes and procedures in place for homeowners to take advantage of the refinance program.  Any formal expansion to the program announced today would take MONTHS before a homeowner would likely be able to work out a refinance with their lender.  (See our blog post on the HARP 2.0 announcement in October, here)

• Most Importantly, this expanded program will require CONGRESSIONAL APPROVAL. Given the fact that we are in a rather contentious election year... approval by congress is far from certain.

We'll continue to monitor this program, and if the program expansion does become a reality, we'll notify Minnesota Homeowners via this blog and our website, here.

Preforeclosure Notices Continue to Decline in Minnesota

On  Thursday, January 19th, the Minnesota Homeownership Center released its year-end data on the aggregate number of Preforeclosure Notices received by foreclosure counselors in the Homeownership Advisors Network.  The numbers continue to indicate that Minnesota is slowly emerging from the foreclosure crisis.  


In the fourth quarter of 2011, members of the Homeownership Advisors Network received 12,016 preforeclosure notices, 30% fewer than during the same time period in 2010, reaching the lowest level reported since the state legislature required the notices in late 2008:

Click to Enlarge

On a yearly basis, Minnesota households received 24% fewer preforeclosure notices in 2011 than they did in 2010.  

Most encouraging is that the fact that the numbers of preforeclosure notices received is down in every county in the Metro area.  In addition, every agency in the Homeownership Advisors Network reported receiving fewer notices in the fourth quarter of 2011 than in the third, AND reported receiving fewer notices in the fourth quarter of 2011 compared to the same period in 2010.


While these numbers are encouraging, we shouldn’t lose sight of the fact that they still show that more 54,500 households continued to struggle with delinquent mortgages in 2011:

Click to Enlarge

Here's the breakdown for the number of preforeclosure notices received by members of the Homeownership Advisors Network in the 7-county metro area:

Click to Enlarge

As background, Minnesota state law (MN Statute 580.021) requires that the foreclosing party provide information regarding foreclosure prevention counseling services to the mortgagor (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 Homeownership Center's network of foreclosure counselors receives 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.


If you or someone you know is struggling with their mortgage payment, new programs, resources and assistance are becoming available all the time. Don’t give up… contact a foreclosure counselor that is a member of the Homeownership Advisors Network today to see if there’s help available for you to avoid foreclosure. Even if you’re not yet behind, now is the time to call. To find your local foreclosure counselor, click here.

Freddie Mac Announces Expansion of Mortgage Relief Program

Earlier this week, mortgage giant Freddie Mac announced an expansion of its mortgage forbearance program to assist borrowers who are experiencing a financial hardship due to unemployment.


A forbearance is an agreement on the part of the lender or investor to withhold their claim to foreclose on a property - an agreement not to foreclosure for a set period of time.


According to Freddie Mac, their servicers can now offer eligible borrowers a short-term unemployment forbearance period of up to six months plus the possibility of an extended unemployment forbearance period if they remain unemployed for more than six months.  (The six-month forbearance period is 'renewable' for a second six-month period, not to exceed a maximum of 12 months.)  Under previous guidelines, the maximum period was six months.


In addition, this expanded program is now available for unemployed homeowners that are already performing under a HAMP or other loan modification program.  If they continue to be eligible for HAMP or another loan modification program, they will be re-evaluated at the end of the forbearance period.


Freddie Mac has outlined some basic eligibility criteria for borrowers (the full criteria are available in their Single-Family Seller/Servicer Guide (Guide) Sections A65.26 through A65.28, here) that include:

• Borrower must currently be experiencing an an unemployment hardship;
• Borrower's current monthly housing expense-to-income ratio (excluding unemployment benefits) must be greater than 31%;
• Borrower's cash reserves cannot exceed 12 months of their monthly housing expense;
• Only a borrower's primary residence is eligible. Second homes and investment properties are ineligible.
• The property cannot be vacant, condemned, or abandoned.

Effective Date
Freddie Mac has strongly encouraged its servicers to begin offering eligible borrowers the unemployment forbearance relief options as soon as possible, but are required to begin offering unemployment forbearance to eligible borrowers no later than February 1, 2012. 


Are you struggling with you mortgage and like to know if an unemployment forbearance - - or other solution - - is right for you?  In Minnesota, the non-profit housing counselors in the Homeownership Advisors Network are available to meet with you FOR FREE to help you with your options to avoid foreclosure.  To find your closest counselor, visit the Minnesota Homeownership Center's website here.

Financial Assistance For Homeowners Displaced By Foreclosure

Due to the success of a pilot program initiated in late 2009 and the generous support of the Otto Bremer and Target Foundations, the Minnesota Homeownership Center announces the availability of financial grants of up to $2,500 to help cover the costs of moving to alternative housing after a foreclosure.  The goal of the grants is to assist Minnesota homeowners with the difficult transition from homeownership back into a rental situation, and to prevent homeowners that were unable to prevent the foreclosure of their home from becoming homeless.


The counselors of the Homeownership Advisors Network (housing counselors) are AMAZING at the work they do to keep homeowners in their homes whenever possible.  However,  foreclosure is inevitable for some families... and these grants allow the members of the network to keep a difficult situation from becoming a tragic one.


Currently, these grants, known as Re-Housing Grants, are only available to qualified homeowners in the City of Saint Paul and Dakota & Washington Counties.  Interested homeowners should contact the Minnesota Homeownership Center for information on how to connect with a member of the Homeownership Advisors Network that is participating in the program.  Teams established by these non-profit counseling agencies will help homeowners determine if they are eligible for one of these grants based on established criteria:

• The applicant has not previously received a grant from this or a similar program.
• The Foreclosure Sale has occurred and retaining ownership is unlikely and relocation is needed.
• limited income and/or excessive but necessary expenses have prohibited the homeowner from saving enough money to secure alternative housing.
• The full monthly rent payment in the alternative housing will be affordable, long-term, for the applicant.

Homeowners who are interested in learning more are encouraged to contact the Minnesota Homeownership Center at 651-659-9336 or by visiting www.hocmn.org.

UDPATE:  Funding is available for the ENTIRE SEVEN COUNTY METRO!  (Anoka, Carver, Dakota, Hennepin, Ramsey, Scott and Washington Counties).  For information on who to contact, the Center has established a page on their website, here:  http://hocmn.org/en/rehousing.cfm

Fannie Mae and Freddie Mac Eviction Moratoriums

On Thursday December 1st, Fannie Mae and Freddie Mac both announced eviction moratoriums that will take place over the holidays. From December 19 through January 2, families living in properties where a Fannie Mae or Freddie Mac loan has been foreclosed upon will not be evicted.


NOTE:  The legal and administrative processes for the evictions may continue during this time, but families will be able to stay in their homes.  In addition, the GSE's will continue with the foreclosure process on delinquent borrowers during this time period as well.


Large mortgage servicers often follow suit – we will updated this blog if we learn of additional banks or servicers initiating moratoriums. 


There are some nuances to the Fannie and Freddie moratoriums; additional details are available in the press releases here and here.


There is no "cold weather" rule regarding foreclosure or evictions after foreclosure in Minnesota.  If you are struggling with mortgage payments or have questions about the process, contact a FREE non-profit Homeownership Adviser that specializes in foreclosure prevention TODAY.  Waiting limits your options!

Southwest Minnesota Housing Partnership Awarded USDA Housing Preservation Grant

Used under Creative Commons
License.  Photo by  ario_ 

Funding will help maintain housing stock in SW Minnesota


The Southwest Minnesota Housing Partnership (SWMHP) has been selected to receive a $69,000 Housing Preservation Grant through USDA Rural Development. The grant will be used to assist 11 very-low and low-income households in the cities of St. James, Sleepy Eye, Winthrop, Gibbon and New Auburn make essential improvements and repairs to their homes.


SWMHP is a member of the Center's Homeownership Advisors Network and offers Home Stretch workshops and counseling, refinance counseling and foreclosure prevention services in dozens of counties in Southwest Minnesota.


The Housing Preservation Grant program provides funding to intermediaries such as town or county governments, public agencies, federally recognized Indian Tribes, and non-profit and faith-based and community organizations. These organizations then distribute the grants to homeowners and owners of multi-family rental properties or cooperative dwellings who rent to low- and very-low-income residents.  


Grants may be used to make general repairs, such as installing or improving plumbing or providing or enhancing access to people with disabilities. Funds may also be used to weatherize and make homes more energy efficient.


To learn more about the Southwest MN Housing Partnership, visit their website at http://www.swmhp.org/.  


Improvement and rehab programs available through the Southwest MN Housing Partnership are included in the Center's "Repair and Rehab Matrix" that we've created as a resource listing improvement, rehab and repair programs in local communities throughout the state.  Programs included in the Matrix include:

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

Some funds are grants and others are loans, usually with below market interest rates.  Looking for help with repair or rehab on your home?  Visit the matrix page of the Center's website here: http://www.hocmn.org/en/rehab.cfm

Racial Disparities in Assets and Homeownership

© Mullica

Disparities in Minnesota continue to rise


The Minnesota Budget Project has reported that according to the American Community Survey (ACS) released by the U.S. Census Bureau last month, not only is poverty increasing in Minnesota, but disparities in poverty levels and household incomes between communities of color and whites are worsening. While the 2010 ACS reports that just under 12% of Minnesotans were living in poverty, the percentages according to race reveal a marked difference in poverty levels for communities of color--the highest being for American Indians which grew from approximately 31% in 2007 to just under 40% in 2010. Likewise, the median household incomes for Latino, black, and American Indian communities remain substantially lower than the statewide median household income for whites. Minnesota has historically suffered from racial disparities and, unfortunately, the latest reports do not hint towards the end of that plight. 


On a national level, Minnesota’s averages rank on the better end for overall poverty levels and median incomes. Again, though, when looking more specifically at communities of color, Minnesota’s ranking drops significantly. In fact, the poverty rate in Minnesota for Asians is just over 5 percentage points greater than the national average while for both blacks and American Indians the poverty rate sits as high as 10 percentage points greater than the national average. 


These racial disparities are all too often found in homeownership rates as well. 


In 2010, John Patterson and Michael Grover reported that the homeownership rate for emerging markets communities was more than 30% below the homeownership rate for whites - the 5th largest gap in homeownership rates in the country. Furthermore, the recent housing crisis has hit the emerging market community especially hard with mortgage delinquencies and foreclosures. While the homeownership gap appears to be narrowing, there is still a need to reach this population with homeownership education and opportunities.
In an effort to confront these issues in Minnesota, the Center leads the Emerging Markets Homeownership Initiative (EMHI) which works to develop systemic changes within the homeownership industry to increase homeownership opportunities for communities of color. Developing culturally-specific resources and services for emerging market consumers is a key component of this initiative. To learn more about EMHI events and resources offered by the Center, visit the EMHI page of our website, here.

FREE Continuing Education (CEUs) for real estate professionals!  
Learn more about the issues that Emerging Markets face and the efforts to achieve parity in homeownership rates in Minnesota at the FIFTH ANNUAL EMERGING MARKETS HOMEOWNERSHIP INITIATIVE SUMMIT.  Learn more about the Summit, and register, here.  The event has sold out in the past and we anticipate that it will sell out this year as well.  Register today.

Stripping Off Second Mortgages in Bankruptcy

The Minnesota Homeownership Center and the Housing Preservation Project have developed a new fact sheet that outlines the recent changes to Chapter 13 bankruptcy allowing 2nd mortgages to be stripped off if they are wholly underwater.


Prior to a ruling in "Fisette v. Keller" (actually court documents, here, if you're interested) this summer, limitations in the Bankruptcy Code prevented a mortgage on a principal residence from being modified in a Chapter 13 bankruptcy. Now, various courts have held that when the amount of the first mortgage is more than the value of the property, the second and third mortgages - and any other junior mortgages - are no longer secured and the limitation on modification no longer applies.  These underwater second and third mortgages can be treated as unsecured claims, similar to credit card debt, and stripped off (removed or cancelled) by a Chapter 13 plan.


The fact sheet defines when second mortgages may be "stripped off" - and when they can't.  


The Center is continually developing and updating our fact sheets around foreclosure prevention and homebuyer services.  Visit our website often for the most recent versions of these documents... they're free to download and distribute!

Independent Foreclosure Reviews

Banks have begun complying with enforcement action.  Homeowners may be able to receive compensation on foreclosures conducted in 2009 and 2010


Under enforcement actions taken by the Office of the Comptroller of the Currency (OCC), the Federal Reserve, and Office of Thrift Supervision, more than a dozen large mortgage servicers are required to correct a number of problems with their servicing, loss mitigation and foreclosure processes.  These servicers are also required to engage independent firms to conduct reviews of foreclosure activities that took place during 2009 and 2010. 


Borrowers are eligible to submit a Request for Review to the independent consultants IF:

1. their loan was serviced by one of the 14 servicers or their affiliates (see list below), 
2. the property is, or was, their primary residence, and 
3. their loan was “active in the foreclosure process” between 1/1/2009 and 12/31/2010.
   
   Active in the process can mean:

• Sheriff’s sale occurred on the property
• Loan was referred to foreclosure but the sale did not take place due to a payment plan, modification, or non-retention option; and 
• Loans were referred to foreclosure but are still in delinquency.

BE CAREFUL!!
National media outreach will begin soon, and millions of homeowners will be notified by mail about the review process and will receive instructions for submitting a five-page Request for Review Form. As with any major announcement of this kind, we anticipate a number of copycat services and scams to pop up.


The independent reviews are free of charge and homeowners should never have to pay for foreclosure intervention services. 


If anyone asks you to pay for their help with a review... or sends you to a website other than the national website that has been set up by the OCC, be careful... it might be a scam!


The national website is: http://www.independentforeclosurereview.com/


Additional Information:
Requests for Review must be received by April 30, 2012. The independent consultants will confirm receipt of the form within one week, though the full reviews are expected to take several months to complete. The consultants will evaluate whether the homeowner suffered financial injury through servicer errors, misrepresentations or deficiencies in their foreclosure practices. In cases where findings indicate a homeowner suffered financial injury as a result of servicer practices, compensation or other remedies will be provided. The exact form of remediation is uncertain.


A copy of the OCC news release is here. 


Participating Lenders and Servicers (As of 11/2/2011)
     America’s Servicing Co.
     Aurora Loan Services
     Bank of America
     Beneficial
     Chase
     Citibank
     CitiFinancial
     CitiMortgage
     Countrywide
     EMC
     EverBank/EverHome Mortgage Company
     GMAC Mortgage
     HFC
     HSBC
     IndyMac Mortgage Services
     MetLife Bank
     National City Mortgage
     PNC Mortgage
     Sovereign Bank
     SunTrust Mortgage
     U.S. Bank
     Wachovia Mortgage
     Washington Mutual (WaMu)
     Wells Fargo Bank, N.A.

As always... if you have any questions about this Independent Foreclosure Review or are looking for ways to prevent the foreclosure of your home, contact a FREE, Non-Profit foreclosure prevention counselor that is a member of the Homeownership Advisors Network!  To find your local counselor, click here.