Posts Tagged ‘Minnesota finance’
Minnesota has changed its regulations as regards Minnesota foreclosures of properties classified as homestead properties. The changes are intended to ameliorate the affects of abandoned properties on the property values of nearby residences. They are also intended to reduce the number of personal bankruptcies resulting from foreclosure of a primary residence. In addition to assisting homeowners, the regulations also affect lenders and give new powers over abandoned properties to municipal governments.
Under the terms of Minnesota foreclosures laws, homeowners how have the right to postponed a forced sale date for five months. Under the previous regulatory regime, only lenders had the right to postpone a forced sale. It is the hope of legislators and lenders that this will give workers who have lost their jobs an opportunity to make good on their arrears.
Postponing the sale date is only a viable solution if a homeowner has a reasonable belief that they can increase their income, i. E., find employment, and catch up on what is owed. The alternative is to allow the sale and either come up with the balance due on the post-sale mortgage amount within six months or be forced into bankruptcy. Given the recession, the later is more likely than the former.
To avail themselves of this grace period now permitted in Minnesota foreclosures, homeowners must meet certain criteria. It is only permitted on residences that are classified as a homestead. As before, property owners may only classify one property as a homestead and that property can not consist of more than four units.
To take advantage of the postponement option, homeowners must have been served with a forced sale date. Once served the homeowner must complete an Affidavit of Postponement and file it with the relevant county clerks office and the office of the sheriff who is to conduct the auction sale. A copy must also be provided to the lawyer handing the foreclosure for the lender. These steps must be completed no later than 15 days before the forced sale date.
Under Minnesota foreclosures law, a homeowner whose residence has been sold in a forced sale has a six month redemption period. If the balance owing on the mortgage after the sale has not been paid in full by the end of the redemption period the mortgage holder may force the mortgagee into personal bankruptcy. Under the new regulations, the redemption period allowed for homeowners is shortened in the extreme.
Under the terms of the new statute, homeowners who are successful in postponing a forced sale date but are unsuccessful in bringing the mortgage current within the 5 month postponement period have their redemption period reduced from five months to five weeks. This is a comfort to lenders because it means the Minnesota foreclosures process is not lengthened the time it takes for the process to be completed.
Under these new Minnesota foreclosures regulations, no homeowner may request a second postponement under any circumstances. This applies even if the mortgage was successfully brought up to date within the postponement period. This means that if the homeowner gets behind on their mortgage a second time, only the lender can authorize the postponement of a forced sale date
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The question is: when will speculators start playing in the market for Minnesota residential real estate. It is a question for which good arguments can be made on either side of the issue. There certainly are bargains available. That does not mean, however, that the market as it stands now is one in which can expect to quickly flip properties. Yes, it is true that there was a 12 percent decrease in the number of home foreclosures last year, but the market has been in decline since 2005 and it is too soon to say the bottom has been reached and it is up from here.
There was an 1800 unit reduction in 2009 of the number of homes disposed of at sheriffs auctions. This may be a sign of good times ahead, or it may be that after five years of declines, the chaff has been removed and now even formerly solid mortgages are in dire straights. There is, on the other hand, reason to think the Minnesota foreclosures numbers may resume an upward trend as 2010 plays out. Pessimism rests in the states stubbornly high unemployment rate. Officials expect the rate will remain in 9 percent range throughout 2010 with at most a . 5 percent drop. And prospects for 2011 are about the same.
Long-term high unemployment in Minnesota means that those who lost their jobs in 2009 may well not find work in 2010. When these homeowners exhaust the benefits they receive from the state unemployment insurance agency. It is low employment levels that have stymied the best efforts of both the state and federal governments to lower the rate of Minnesota foreclosures.
The mortgage restructuring efforts had the goal of lowering monthly payments for homeowners to no more than 30 percent of household income. While this was successful where there was an income, it was frequently only a temporary stop gap. Homeowners who had gotten behind in their payments due to losing their jobs and then failed to find new work before running out of unemployment benefits found themselves unable to afford even the restructured payment scheme.
As regards the changes to the Minnesota foreclosure process enacted in the summer of 2009, the ability of homeowners to get 5 month postponement of a forced sale also helped lower the 2009 foreclosure numbers. The ultimate success of this change remains in doubt, however. This is because the data is not yet in on how many homeowners have successfully used the postponement period to resolve their employment and income issues. The legislation only took effect in August and the first round of postponements are only now ending.
It is to be noted that foreclosure amendments also increased the lenders responsibility to protect abandoned properties from trespass, vandalism and the elements. The clause that permits lenders to add their expenses to the outstanding amount owing on the mortgage is widely ridiculed. Given that lenders are typically required to force those who abandon their homes into personal bankruptcy, adding their additional costs to a debt that will likely pay out pennies on the dollar is not much comfort.
In fact, these additional financial liabilities may be enough to keep much needed investment money out of the Minnesota real estate market entirely.
Supporters of the newly revised process defend the amendments, pointing to the 12 percent reduction 2009 foreclosures. But they, like all of us, have no choice but to wait for the date to come in on how much difference the five month grace period will make. As these result come in over the course of this year we will be better able to determine whether an extra 150 days actually changes the 5 year trend in Minnesota foreclosures. If the additional time does not assist homeowners in finding good paying employment, the question will become, what do we do now.
Analysts are agreed that recovery for residential real estate in Minnesota real estate will not take place until there is a substantial improvement in the unemployment picture. When and if that occurs is anyone’s guess. There are certainly deals to be had at Minnesota foreclosures auctions. But it is clear that the house flipping days of the past have yet to appear on the horizon.
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They promise everything and deliver nothing but heartache. Some people involved with Minnesota foreclosures have been targets of white collar criminals that are experts at taking your money and leaving you even more distressed.
These felons want to take advantage of desperate homeowners when they are experiencing one of the toughest problems of their lifetime. Most of us have no idea who to visit with about our home loan or who is available to assist us when we face the potential loss of our house.
Rule number one is to know that there is no legitimate entity that needs to collect cash from you before they take action. You should report any individual, company, or online company that is demanding advance fees to the Attorney General or other proper authority.
Many creative crooks will dazzle you with a song and dance routine. The song is a buyback option and the dance is called lease-to-own. It is still just a show because neither is a genuine solution that result in you saving your home.
There are some scam artist that do not even pretend to modify your loan. They want certain information and at the top of the list is your social security number. Never provide your social security number without performing a suitable investigation or consulting your attorney.
Some of these people will dress up a pitch about service fees or even charging cash for counseling. That is the signal to run in the opposite direction. You loan is most likely under the umbrella of VA, FHA, Freddy Mac, or Fanny Mae and they all have free counselors.
An ice cream cone or a slice of pie is a quick fix. There is no easy and fast way to resolve foreclosure so when you hear those words it is time to run in the other direction. Someone is definitely lying to you at this point.
Make sure you do not sign a Power of Attorney agreement under any circumstances unless you have the advice of your attorney. Do not autograph any legal contracts without the review and assistance of your attorney or a skilled and reputable foreclosure lawyer.
The best nonprofit foreclosure counselors in Minnesota are well known. You can check with HUD (Housing and Urban Development) to find out who the trusted state counselors are and how to contact them for support. These experts do not charge a fee to the homeowner for their effort.
There are companies that know for a fact that they cannot modify your loan or provide any significant help at all. Those groups have collected millions while helping virtually no one. They are proficient at getting your advance fee and performing emotional homicide on homeowners.
These experts will tell you that these fly by night businesses will not lower your monthly loan payment or get your mortgage modified. Educate yourself on the laws that apply to your situation and all of your rights protected by statute.
You can save yourself and others from the toll the scam artists are taking on innocent homeowners. You must be willing to report these people even if they have already fooled you so that steps can be taken to bring them to justice.
Some people involved with Mn foreclosures have been targets of white collar criminals that are pro’s at taking your money and leaving you even more distressed. We have got the ultimate inside scoop on mn foreclosure properties.
On June 15, 2009, the rules on Minnesota foreclosures were changed. Today, homeowners looking down the barrel of a sale forced by the lender after the homeowner has fallen into arrears on their mortgage payments have the option of postponing the date of sale by five months. Before the changes it was only the lender who had the ability to set the forced sale to a later date.
The length of time the foreclosure process takes has not been changed by the amended statute, despite the postponement. The redemption period remains at a half a year for homeowners who do not postpone the date of the sale. For those who do opt to postpone, only five weeks are permitted for redemption period. This means that should a homeowner be granted a postponement and then be unsuccessful in their attempt to get their house payments up to date, they will only have 35 days after the forced sale of their property has been finalized to come up with the balance due on the mortgage after subtracting the proceeds of the sale. As before, mortgage holders may force the defaulting mortgagee into personal bankruptcy at the expiration of the time set as the redemption period.
It is a relief to lenders that sale date postponement is an option that is only available to homeowners once. Should the homeowner manage to get their house payments current within the allotted postponement time frame, they can not go back into default on the property at any point in future and again request the grace period.
Fortunately, this new wrinkle in the Minnesota foreclosures process does not necessitate additional paperwork for the lender. The usual steps that are required of the party that is foreclosing are still valid. The date of sale that must be published does not have to be published again with the new sale date nor does the notice of sale have to be filed or served a second time.
Lenders do have additional duties under newly revised Minnesota foreclosure laws in the case of abandoned properties. It use to be that when a property was abandoned it was optional for lenders to take steps to inspect the property, protect it from the elements and secure it from trespass. These option activities have been made mandatory and can be ordered by city officials. Additional maintenance minimums have also been established.
Once a sheriffs certificate has been issued and evidence sufficient for a court to find that a property is abandoned has been established, lenders must enter the premises, change or install locks on all exterior doors and all windows, and commit to undertake periodic inspections. Mortgage holders also have the option of boarding up windows and doors and installing alarm or security systems.
Lenders who undertake these responsibilities must present the keys to the new locks to the homeowner if the house has not yet been disposed of in a forced sale. The lenders costs in the completion of these undertakings may be added to the principal owing on the mortgage if the undertakings are determined to protect the property from water, trespass, public safety or other minimum standards of the community.
The revised Minnesota foreclosures regulations give cities considerable power in regards to abandoned residences. In the extreme. Cities may apply to have a redemption period reduces so as to allow municipal employees and work crews to gain access to effect needed work.
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Minnesota foreclosures dropped to about 23,020 cases in 2009, a decline of 12 percent from 2008s 23,300 foreclosures. But the decline gives little reason to celebrate. The 23,020 Minnesota foreclosures last year constitutes 1.3 percent of the total number of residential units in the state. This is triple the historical average for foreclosures as a percentage of total residences.
Perhaps more ominously, the number of mortgagees who got behind on their mortgage payments in 2009 as the result of under or un-employment did not decline from 2008s total.
The increase in the Minnesota foreclosures rate actually predates the housing crisis, say housing advocates; and the figures bear them out. Foreclosures began to climb as far back 2005, three full years before the 2008 collapse of the housing bubble.
Much of the credit for the decline in foreclosures in 2009 must go to the Minnesota legislature. In June of last year the foreclosure statutes were modified to allow homeowners to postpone a forced sale date for the first time in Minnesota history. The postponement is only allowed once. But if a homeowner can find employment and get their mortgage out of arrears, it is possible to avoid foreclosure all together.
Another factor in lowering the Minnesota foreclosures rate was the mortgage modification program instituted by banks at the insistence of the Obama administration. The goal of the mortgage modification program is to lower payments to no more than 30 percent of household income. While this program has saved many homestead class units from foreclosure, it has not had as large an affect as hoped. This is because homeowners who have lost their jobs are frequently unable to pay for food and utilities, much less a mortgage.
Changes to Minnesota foreclosures rules that were implemented in the summer of 2009 were likely more successful in staving off foreclosures than were mortgage restructurings. Social activists and non-profit housing groups quickly spread the word of the changes to the homeowners they were already counseling and many used the new regulations to buy themselves the time they needed to find work and get their income back to where they were able to bring their mortgages current.
The most disturbing aspect of the Minnesota foreclosures crisis to the employment forecast looking forward. Analyst do not expect the employment rate in the state to decline by any more than half a percentage point over the course of 2010. That the rate is not expected to climb is great, but as can be seen by the foreclosure rate at current unemployment levels, flat or minimal growth in unemployment will not be enough to stop the bleeding.
On the upside, there has never been a better time to buy investment properties. In a practice that is still rare but on the upswing, speculators are approaching homeowners who have been granted a postponement of a forced sale in Minnesota foreclosures proceedings. The investors offer to buy the home for the amount owing on the mortgage and then rent the property back to the current owner at a rate they can afford. This may well be one of the few cases where predatory speculation actually works to improve a situation rather than make it worse.
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