Posts Tagged ‘minnesota’

Lori Swanson, the Attorney General of Minnesota wants mediation in foreclosure matters compulsory. She called for the state to make it mandatory for the banks to open talks with house owners before foreclosing on them. Swanson added that her department has been successful to some extent with voluntary mediation in some cases She was applauded by many who said that their houses and homes had been saved only because of the intervention of her office.

Swanson went on to say that the difficulty is with the complexities of modern mortgages. This is making sorting out matters bothersome. Her suggestion is that the state should transfer some of that responsibility to the lenders. She said, “If you’re going to take the home away from people and use the foreclosure process, you gotta show up at the mediation and negotiate in good faith. And that you, the lender, are going to have to figure out what that means. If you truly don’t own it, you’re going to have to get authority from someone, whether it’s the secondary investors or somebody calling the shots.”
Of those who had benefited was Lisa Hemberger a hairstylist residing at Cottage Grove. She said that voluntary mediation had helped her to avoid foreclosure and continue to stay in her home. Life had become difficult for her when her husband lost his job. Without help from the office of the Attorney General she had been unable, on her own, to contact the lender and fell behind in her mortgage dues. Each time she called the lender a different person would respond who did not know anything. They would transfer the call from one to another in an endless meaningless chain. For an ordinary person it is well nigh impossible to break through this impasse.
Swanson said that Minnesota is in urgent need of initiating a negotiating process following the outlines of Farmer-Lender Mediation Act that had assisted about 14,000 farmers during a crisis that broke twenty years ago. She bemoaned that today nearly three times more that number are facing similar money problems with the situation set to worsen in the following year.
Alarmed at the foreclosure related financial crisis the Bush administration as well as local and state governments have been taking many measures since the last year but so far it has not been able to make a dent in the rush of foreclosed houses entering the market and destabilizing the economy.

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The only way to find out if a Minnesota foreclosure for sale is a first mortgage holder is by conducting a full title search. The cost of this is negligible compared to how much it would cost if an investor purchased the property and found out the title was in a very bad condition.

Properties may be located by attending suctions or by looking for foreclosure sales, auctions and Sheriffs sales in your local newspaper. They can also be found by contacting the county clerks’ office and checking in real estate magazines.

It is vital for the investor to evaluate the property in order to determine the potential profit. This is accomplished by use of comparisons between market value and a brokers’ opinion of price. Once the default amount has been subtracted from the market value, the investor may find that they have a winner if there is a significant difference.

If at all possible the property should be inspected, this is not always possible, but the investor should at least try to gain access. Of course this has to be done with the owners’ permission. Repairs have to be made to any damages before the property can be re-sold, these expenses have to be deducted from any potential profit.

To calculate potential profit, the investor must start with the price that the property can be sold once it is in good condition. Subtract repair expenses and cost while holding the property, this includes loan payments, insurance and taxes. This should also include closing costs on the sale of the property as well as commission for the broker, if the investor intends to make use of a broker.

Liens and judgments should also be taken into consideration as these will need to be paid. Fortunately liens on the mortgage of a property can be paid off at a discount. The likelihood of these liens being cleared on the auction sale of the property exists for the creditor, in this instance they will actually receive nothing if they are not the major lien holder. By paying these liens at a discount it is possible to increase profits.

The sub-total arrived at after deduction of all these costs will be what the investor is expected to net after the property has been sold, and it the gross potential profit. This figure is a hypothetical number based on the assumption that all will go well, and in accordance with plan.

The lowest the investor will be able to bid is the final judgment amount, the investor then has to decided the highest bid they can make, based upon all the other eventualities after the bid has been accepted.

As with all investment methods, investing in Minnesota foreclosures for sale bears its own risk factors. However, it has been said that fortune favors the brave, so it is certainly worth a try and there is huge potential for making good profits

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An unprecedented increase in foreclosures in southwest metro counties is posing a challenge to south metro counties. Officials and communities are in a tizzy – what to do and what not to do. A warning has come through to local government bodies that the foreclosure crisis is worsening. This translates into slim budgets to an extreme point.

In Dakota County the warning is that the increased figure of court sales this year is going to be the same as the total number of actual sales of the previous year. In Scott County the prediction is that foreclosures are going to double from the previous year. It will take a couple of years to stabilize.

Mary Monteith of Carver County Community Development Agency referred to it as a “daunting task.” There is a feeling of confusing amongst her colleagues. Jon Ulrich, Scott County Commissioner told her that the number of foreclosures rolling in is too much for their capability to respond. “We’re taking a sip out of a fire hydrant of water,” he said. What makes matters worse is that time is against both lenders and borrowers.

The officials were one in their view that the most important thing is to let the borrowers realize that help is available. The earlier they seek it is the better for them. The government can then take initiatives to assemble financial help packages to steer borrowers through the temporary foreclosure bottleneck. Montieth reiterated that it should not be taken to mean that money is being doled out at random. Public money will not be played around with until officials are convinced that the borrower has the will and the power to overcome the immediate hurdle. It must be shown on paper and ink that they can manage the mortgage.

Scott and Dakota had been ranked among the most affluent counties. In 2001 there were less than 200 court auctions of foreclosed units in Dakota. In 2007 there were less than 1,600 sheriff’s sale – the highest numbers coming from West and South St Paul and Farmington.

It is the house owners associations that are at the receiving end of the foreclosure crisis. Dues relating to unpaid utility bills and trimming of lawns are going unpaid. The most dangerous thing is the falling real estate with prices plummeting to unprecedented levels. The market is trying to reach its point of balance. Meanwhile thousands more are rushing into the foreclosure net.

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Foreclosures are challenging Congress and as yet seem to be enjoying the last laugh. Democrat Rep. Tim Walz speaks about his own personal experience. The house next to his has been in foreclosure for more than a year and pulled down the value of his own unit by 20%. The story of Walz is being repeated all over Minnesota with the bursting of the housing bubble. Both Democrats and Republicans are harangued with complaints from community leaders about the rot spreading from foreclosed vacant houses. Leaders of both parties are huddled together sitting at the same table desperate to find solutions to tackle the common enemy.

The House and Senate have passed bills and more are in the offing. There are doubts if the Democratic led Congress will be able to come to terms with Bush administration and the President’s veto threat.

The House bill consists of three parts aimed at avoiding foreclosures with the hope of bringing back the mortgage market to its rails. It allotted greater powers to the Federal Housing Agency to be able to insure refinanced mortgages. On their part the lenders would have to reduce the amount of loan in tune with the prevailing market prices. Secondly the bill allows $11 billion as tax credits to buyers and mortgage holders who refrain form itemizing their respective tax deductions. This also includes the granting of $7,500 to new buyers. It allots to the state $10 billion for floating mortgage revenue bonds to help in the refinancing of sub-prime mortgages. Thirdly the bill made changes in the Freddie Mac and Fannie Mae mortgage companies that are federally sponsored.

Democrats together with a large Republican approval supported the bill but the numbers were not strong enough to override the veto threat. The critics said that it was a bail out for buyers by putting the market at jeopardy. Republican Rep. John Kline criticized the bill for doing ‘little to address the current foreclosure problems’. The market should be allowed to find its level. However he did not oppose other forms of assistance. Walz stressed on voluntary moves between lenders and borrowers. He did not want the blame game to sling mud at each other. His contention was that since the forest is already on fire something should be immediately done before arguing about who started it. The problem should be tackled keeping in view the interests of the borrowers, the mortgage industry as well as the market.

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More and more house owners who were and are victims of foreclosures are coming out with foreclosure scam stories. Many companies came forward with rosy promises of helping to prevent foreclosures but ultimately nothing happens except that the victims find themselves poorer.

The story of Chantae Grandsberry of Brooklyn Center is one of many. She was hunting around for someone to help her save the house that was her home. Her searches took her to an Oklahoma firm and at that time she believed that she had knocked at the right address. The firm was freely quoting from the Bible on its website and introduced themselves as foreclosure prevention specialists who believed in Christian values. Grandsberry and her husband were taken in by these holy platitudes. At that time Chantae was expecting a child and believed that those who cited the Lord could not sin. But in a short time she lost her house last October when the company – American Foreclosure Specialists, failed to keep their promises. They had taken $1,200 in advance although this was in violation of Minnesota law, commented the Attorney General of Minnesota, Lori Swanson.

In the beginning of the month Swanson filed law suits against American Foreclosure Specialists and three other firms – all being based outside the state. They had violated the law by collecting fees even before providing services they had promised to do so. Here the matter did not end. Because of their tall talk, the house owners lost time and more funds trying to salvage the foreclosure hit wreckage. Thus these scammers made a bad situation even worse. Swanson filed the suits in the District Court of Hennepin County. She is also trying to prevent these scammers from operating in Minnesota. This is part of the general programme the Attorney General has taken up to sieve out the fraudsters and cheaters.

The cases were registered against American Foreclosure Specialists, National Foreclosure Relief of Nevada, Lewis Loss Mitigation of Alabama (also operating as Stop Foreclosure and Lewis and Associates Consulting), D.R. Financial Services of California (also working as D.R. Financial and Superior Home Loans), Mortgage Default Assistance of Florida and Home Assure of Florida.

Despite official measures being taken against the scammers, it is essential that the people become aware of the rising number of cheats and tricksters. In fact their numbers are rising with the number of foreclosures. The foreclosure notice traumatizes the victim who cannot think clearly.

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The Attorney General of Hennepin stated that some consulting firms have been duping foreclosure victims with promises of help. Six firms located outside the state have been charged by Hennepin County District Court. Injunction is being sought to prevent them from continuing with their business in Minnesota while the court proceedings are in progress. In the suits it is stated that these firms violated the laws of the state by raking in handsome fees for services they promised to deliver. But in reality they did nothing of the sort. As a result of this this foreclosed suffered intensely. More money and time was lost that ultimately led to the very thing they were trying to avoid – eviction.

Attorney General Lori Swanson commented that these firms ‘made a bad situation even worse.’ The companies were blatant enough to host websites advertising their claims. They also used direct mail services to make contacts with the house owners and sweet talked their way into the traumatized hearts of their prey. In each particular case these firms asked for consultation fees ranging from $1,000 to $,2,400. However they slowly made more demands matching further promises from clients who were already neck deep in debts facing and foreclosures.

These scammers approach at the point when the victim is first hit with the news of foreclosure when fear and despair traumatize sanity. Lonnie Sievert lost her house in Brooklyn Park to foreclosure. Her situation was made worse with these cheats. The trio against whom law suits were filed were National Foreclosure Relief of Nevada operating in California, Lewis Loss Mitigation of Alabama (using many names like American Foreclosure Specialists amongst others), also in California and Home Assure of Florida.

Each individual has a story to tell, Terry Lake is one. She has filed for bankruptcy in an effort to save her house. She gave something around $2,400 to one of the trio for this advice of filing bankruptcy. Another person, Lake, had more or less the same story to tell. Intuition had warned him that the promises were false and yet he got taken in by smart sales talk. To add sacrilege to injury the website of the American Foreclosure Specialists underlined the fact that the firm was run by Christians quoting lines from the Bible. One of the victims who chose this particular firm for its religious tone was Chantae Grandsberry of Brooklyn Centre.

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A federal grant has been made of $4.3 billion to help 7,000 foreclosure victims in Minnesota. It is the second largest sanctioned in the country related to the present crisis. It will help the state to hire more housing counselors to steer the borrowers through the maze of lender bureaucracy. Governor Tim Pawlenty commented that the state wants to go all out to prevent foreclosures. However he warned that it does not involve the foreclosure deferment bill that is raising much controversy while navigating through the House and Senate. This bill will make Minnesota the first state to announce a hold on some of the foreclosures while permitting borrowers to make reduced payments for a year. Pawlenty added that he would veto the bill when it would come to him. The step would have grave consequences that had not been anticipated. It will push up credit costs for the residents of Minnesota.

Apart from the federal grant the Marquetter Financial Companies will give the state more aid worth $5000,000 to help those who will benefit from a bridge loan and avoid foreclosure.
Minnesota has been particularly hard it. It is expected that there will be 37,000 foreclosures in 2008. Legislators at state and federal level are scrambling for solution as the entire socio-economic structure of the country is adversely affected. On Tuesday the Minnesota House passed a number of foreclosure related bills that would step up financial assistance and give protection to tenants and mobile house owners.

Packages aimed at foreclosure assistance are moving through the Congress as well as the Senate. This will sanction funds to local governments to enable them to buy foreclosed units, increase the scope of mortgage assistance and permit bankruptcy judges to modify the terms of the house loans. But it is not all smooth sailing. Senator Ellen Anderson (Democrat) said that the deferment bill is required to buy time allowing the Congress to find out more comprehensive measures to solving the foreclosure crisis, looming large over US. She commented that while the 37 extra counselors are most welcome nevertheless it is vital that the house owners are given more time to breathe form the foreclosure embrace that is choking them. The number of counselors will be doubled but the problem will remain with out of the state lenders. With the mortgages being bundled into packets it is now difficult to locate the lenders stationed around the globe.

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During the last two years the situation has been sinking from bad to worse and foreclosures have enveloped Minneapolis. More and more people are losing the houses that have been their homes. The increase has been by 60% during the first two months of 2008 as compared to the same period in the previous year.

To stem the tide the Minnesota Home Ownership Center is hosting the workshops free of charge so that the people can learn about the ins and outs of foreclosures and how to battle it. Over one hundred families participated in the first workshop held in the basement of St. Paul’s church on Tuesday night.

Each one had a story to tells. Anthony Sofie had lost his construction job and consequently could not meet his mortgage commitments. What is worse – the rates are set to go up again. He wants to know what can be done to keep fires of his hearth burning in his home. Ed Nelson representing Minnesota Home Ownership Center said that Sofie had approached them at the right time – the slightest delay would have been fatal. The sooner they come the better the options. So far more than half of those who sought help have benefited. Nelson opines that the foreclosure situation is not without hope.

At the workshop it is explained in detail what missing a payment amounts to. After the first lapse the lender sends a notice. By the fourth month the lawyers come into the picture. The court or Sheriff’s auction takes place by the seventh month. Sofie came to know that the rate of interest would remain unchanged. This might enable him to continue to stay in the house that is his home. He is optimistic that within 5 years he will improve his position. But had he not sought help he would have lost his house and home.

The foreclosure is a legal process that lenders nowadays want to avoid because it takes up time, money and energy. With the phenomenal rise in foreclosures the lenders have eaten more than they can swallow. They want to get rid of these white elephants. As such they are eager for modifications, loan forgiveness or giving permission for short sale. Nobody benefits from foreclosures – lenders, borrowers, administration or communities. As such the climate is just right for viable solutions.

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