On April 14, 2008, Governor Tim Pawlenty announced plans to provide Minnesota homeowners with additional tools to prevent foreclosure
. These additional implements include expanded foreclosure counseling workshops around the state, the creation of an agreement with lenders to reduce foreclosures, state funding for voluntary third-party mediation when counseling is unsuccessful, and a new Commerce Department assistance hotline for counselors. It is hoped that with the additional help, more families facing foreclosure will be able to keep their homes.
According to the nonprofit Housing Link, there were approximately 20,573 foreclosures in Minnesota
in 2007. That is an 84% increase from 2006. These figures are based on sheriffs’ sales of foreclosed properties. Based on its calculations, further trouble in the subprime mortgage industry, and unemployment rates, Housing Link is projecting between 29,000 and 37,000 foreclosures in 2008. This alarming rate of foreclosure has spurred quite a few legislative actions in the past year to stem the flow.
This most recent plan starts immediately with a series of mortgage Foreclosure Counseling Workshops. Sponsored by the Minnesota Home Ownership Center, these workshops will bring lenders and borrowers together at the same location. The lenders will be contacted to participate in these events directly by Department of Commerce. Mortgage lenders and servicers at the workshops will meet individually with distressed property owners to review their particular situation and possibly modify the terms of the loans. Prevention of foreclosures is the goal. At the Foreclosure Counseling Workshops, homeowners can receive free and confidential advice on any questions they might have. The first workshop will be held in Minneapolis on Tuesday, April 22. Then, the next three will be in Anoka on May 13, Buffalo on May 20, and Eagan on June 5. Additional workshops are being planned for St. Cloud, Rochester and Duluth. The events are free and open to the public with no registration required.
Gov. Pawlenty is also asking lenders to sign a contract to step up efforts in reducing foreclosures in Minnesota. The Department of Commerce has already been meeting with lenders regarding this agreement. The Minnesota Foreclosure Prevention Compact asks that lenders participate in the Foreclosure Counseling Workshops, work with mortgage foreclosure prevention counselors, engage in a substantial loan modification effort for subprime mortgages and adjustable rate mortgages, report their progress to the Minnesota Department of Commerce, and more.
The Minnesota Department of Commerce has also established a hotline for loan counselors if they experience trouble either contacting or negotiating with lenders. The department will then be able to contact the lender or servicers to ensure they are complying with this initiative.
Minnesota homeowners facing foreclosure have their own hotline to call, the Minnesota Foreclosure Hotline. Representatives offer information on counseling and other resources. The toll-free number is 1-866-462-6466.
Sometimes counseling cannot resolve issues surrounding a possible foreclosure. In response, the governor has directed Minnesota Housing and the Department of Commerce to work with the Minnesota Homeownership Center and lenders to provide access to mediators when it would be effective at keeping people in their homes. Mediators will be paid for by the state through grants from Minnesota Housing.
The Minnesota Department of Commerce would also like to remind borrowers to watch out for predatory lending practices. Homeowners trying to refinance their mortgage should do business with a Minnesota licensed mortgage originator. You can check their licensing status yourself at the department’s website here. If you suspect mortgage fraud, call the Minnesota Department of Commerce at (651) 296-2488 or 1-800-657-3602 to report it
If you are involved in foreclosure proceedings, it is important for you to be aware of programs like this. There is help available for you to try to keep your home. You never know if one will help until you try. There are websites and numbers throughout this article that offer help and/or information regarding foreclosures in Minnesota.