Archive for the 'States' Category

Neighborhoods in Minnesota battered by repo homes will be rejuvenated by the $10 million funding given by the McKnight Foundation to buy abandoned repo homes, repair them and sell them to responsible low-income families.

The McKnight Foundation split the $10 million between the Greater Minnesota Housing Fund and the Family Housing Fund, which were chosen to administer the money and use it to turn the repo homes into homes which are energy-efficient and would provide affordable shelter to families and individuals able to maintain the homes.

The McKnight Foundation, founded in 1953 in Minnesota and funded by William and Maude McKnight, has about $1.6 billion in assets and has been increased in 2008 with another $99 million. An estimated 11 percent of the money is being spent to sustain family stability through provision of affordable housing.

Kate Wolford, head of the McKnight Foundation, said the foundation is glad to be able to help community associations carry out their programs in reducing the number of abandoned repo homes across the state and provide Minnesota families with affordable housing.

Wolford also called on other foundations to consider investing in the rehabilitation of repo homes as well as help stabilize Minnesota communities. The $10 million was given to the two housing groups in the form of home loan funds, which represent foundation investments that expect small returns of their capital within a set time.

Tom Fulton, president of Family Housing Fund, said the entire $5 million will be added to his organization’s Home Prosperity Fund set up in 2008 to rehabilitate Twin Cities neighborhoods battered by repo homes.

The home fund, initially launched with a total of $16 million coming from US Bank, Wells Fargo, TCF Bank, Minnesota Housing and Thrivent Financial, has increased its funds to about $25 million after receiving another $3 million given by lender Wells Fargo, a $1 million funding from the foundation sponsored by Pohlad family and the $5 million from McKnight.

Minnesota mayors, including Saint Paul Mayor Chris Coleman, Minneapolis Mayor R.T. Rybak and Isanti Mayor George Wimmer, commended McKnight for the loan funds, all saying the loan funds would cut down Minnesota foreclosures and mitigate the effects of repo homes on Minnesota families.

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Nonprofit housing counselors in Minnesota are discovering that more and more homeowners approaching them to save their homes from becoming foreclosed properties for sale are middle class families.

The counselors’ observation is supported by a report from the Minnesota Home Ownership Center in Saint Paul, which states that most homeowners who met with foreclosure counselors in 2008 held prime mortgages. The center, financed by government agencies, foundations and corporations, analyzed data from 11,809 mortgage borrowers who attended foreclosure counseling sessions across Minnesota in 2008.

In 2008, 60 percent of all homeowners who approached the center for help were owners of prime mortgage loans, while just 37 percent held subprime loans. The year before, 57 percent of homeowners had prime loans while 43 percent had subprime mortgages.

Of the 60 percent that had prime mortgages, 27 percent were holding adjustable rate loans, which borrowers later found out to be too risky.

Julie Gugin, executive director of the center, said it increased its staff from 20 counselors to 72 counselors in 2008 to be able to serve borrowers troubled by foreclosure properties last year. She said the center receives a yearly budget of $2.3 million, which it also shares with other nonprofits working to reduce the number of foreclosure properties in the state.

Gugin said that most of the middle class couples who sought help cited reduced income as the reason for their financial difficulties. While these middle class couples know they can afford their monthly payments during the time they took out the loans, many subprime borrowers had some doubts about the affordability of their loans.

Wells Fargo senior economist Scott Anderson said the shift in Minnesota foreclosures is also occurring nationwide. He said unemployment and other difficulties that arose from the recession are now the main reasons for the second flood of foreclosure properties.

According to the Mortgage Bankers Association, the national default rate for prime mortgage loans increased to 5.06 percent in the last quarter of 2008 from 4.34 in the previous quarter.

Gugin reported that the center was able to prevent 55 percent of over 9,000 houses from becoming foreclosure properties in 2008. She said they accomplished it by aggressively pursuing mortgage lenders. She added that of those homeowners who were helped to save their houses from becoming foreclosure properties, 86 percent were successful in getting their monthly payments reduced to affordable levels.

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• Minneapolis Foreclosures for Sale
• Saint Paul Foreclosures for Sale
• Rochester Foreclosures for Sale

Troubled homeowners in Maine can thank their state legislators for their efforts to set up state government foreclosures programs that would help them.

On Tuesday, state legislators will conduct public meetings to discuss several bills aimed at implementing their own government foreclosures program. These include bills that set up mandatory mediation between lenders and troubled homeowners, that protect renters of houses in foreclosure and that reduce the backlog of private lender and government foreclosures in courts.

The mandatory mediation proposal was introduced by Representative Sharon Treat of Hallowell. The bill, supported by CEI and other nonprofits, seeks to institute a mandatory mediation for homeowners at risk of foreclosure within the Alternative Dispute Resolution Service of the courts. The proposal aims to ensure that troubled borrowers know all the options available to them and to make sure they get the chance to negotiate with their lender.

The bill would also require homeowners and lenders to maintain homes even if they are at risk of private lender or government foreclosures. The homes should not be allowed to contribute to neighborhood blight. The bill also prohibits renters from being forced out of foreclosure properties.

Representative Treat reiterated that the bill would not grant any money to any party. It just aims to help the courts ensure both lenders and borrowers get fair treatment in the foreclosure process and reduce the backlog of cases of private lender and government foreclosures.

Carla Dickstein, top executive at the nonprofit Coastal Enterprises Inc., said foreclosures sales are rising because of the rising numbers of the unemployed and the worsening economy.

Based on reports from the Center for Responsible Lending in March 2009, there were 5,455 in private lender and government foreclosures in Maine as of December 2008 and over half of those in foreclosures were subprime loans. Maine foreclosures are negligible compared to those of other states such as California, Nevada and California, but Main’s foreclosure rate is still higher than the nationwide average, based on studies from the Center for Responsible Lending.

Lloyd LaFountain, superintendent of the Maine Department of Professional and Financial Regulation, explained that foreclosures initiated by financial institutions chartered in Maine are lower than those initiated by financial companies in other states. As of December last year, the 32 mortgage lenders chartered in the state held over 87,000 home loans.

Dickstein of CEI said there are homeowners who can no longer be saved by the state’s government foreclosures program because they already have accumulated large arrears and large balances, but there are still some who can be helped through mandatory mediation.

The 26 cities with the highest number of foreclosed homes in the first three months this year are located in only four states, namely California, Arizona, Florida and Nevada, according to a report prepared by California-based foreclosure tracking firm RealtyTrac.

Housing analysts in the San Francisco Bay Area are hopeful the price declines of new homes and homes listed in foreclosure listings will stop soon. From data on home sales in the area in February, they are getting signs of the impending bottoming out of home prices and ultimately, the recovery of the housing sector. [...]

Hawaii, which has been largely outside the radar of foreclosures list in the past several months, experienced a staggering increase of 503 percent in foreclosure filings in March, according to data compiled by RealtyTrac.

Volunteer lawyers in Florida have been helping homeowners save their homes from becoming a foreclosure property since 2007 under the Florida Attorneys Saving Homes foreclosure prevention project. The state’s chief financial officer Alex Sink created this program in partnership with the Florida Bar, Florida Bar Foundation and Florida Legal Services to help distressed homeowners and to stop the rapidly rising number of bank foreclosure properties across the state.

Homeowners in Florida are hoping new efforts by the state to help them prevent their houses from becoming foreclosed homes will push through.

More and more renters who are updated on their monthly payments are being evicted unceremoniously as their landlords failed to inform them that the houses they are renting are under bank and government foreclosures.

A plan aimed at preventing bank and government foreclosures has been signed into law by California Governor Arnold Schwarzenegger. The plan, which includes a 90-day suspension on bank and government foreclosures, will take effect on May 22 of this year.