Minneapolis Foreclosure Homes Get Help from HOPE, HAMP, NSP

by Simon Lindsay on Foreclosure Help

Minneapolis foreclosure homes have been the focus of various federal programs such as Hope Now, Home Affordable Modification Program and the Neighborhood Stabilization Program over the past years.

Over a two year period, Hope Now has modified about 21,000 distressed mortgage loans in Minnesota from the middle months of 2007. The HAMP, meanwhile, is being implemented by the Minnesota Home Ownership Center, which supervises a statewide network of over 200 nonprofits that provide foreclosure prevention counseling to troubled borrowers.

According to Ed Nelson, spokesperson for the center, there were about 23,000 Minnesota foreclosures in 2009, down from the 26,000 foreclosures filed in 2008, but still quadruple the number of foreclosures in 2005.

Another research firm also reported that foreclosure activity in Minnesota declined in January by 16 percent from the previous month, but still surged by more than 49 percent when compared to foreclosures in January 2009. Lenders sent delinquency and foreclosure notices to 2,813 households, and out of these households, sent 1,512 homes to foreclosures.

To help prevent Minneapolis foreclosure homes from negatively impacting neighborhoods, the city was given another package of funding from the NSP to add to the $14 million given in 2009. With $15.4 million from the second round, the city has already received a total of $29.4 million to address its neighborhood blight problem.

The city was allocated a total of $19.45 million in the second round, but it had to share part of the fund with its partners in submitting a consortium application. The neighboring city of Brooklyn Park was given $2.3 million and Hennepin County, where Minneapolis is located, was given $1.687 million.

Just like most cities that received NSP money, the city of Minneapolis will also use the funds to buy, rehabilitate and resell foreclosed homes. According to Mayor R.T. Rybak, the money will be spent to finance 70 homes, rehabilitate 54 units, demolish 56 blighted houses and redevelop 80 units.

The first funding needs to be used up by September this year while the second funding needs to be spent by 2013. City officials said they have already used about half of the first funding.

In Minnesota, a law was passed last year to help homeowners rescue their homes from foreclosure sales. According to the state home ownership center, foreclosure sales are delayed by 5 months to enable owners to find money to restore their loan accounts to current status and prevent their houses from entering listings of Minneapolis foreclosure homes.