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~ Includes Foreclosure Counseling Workshops, funding for mediation, lender compact ~ Saint Paul – To provide Minnesota homeowners with additional tools to prevent foreclosure, Governor Tim Pawlenty today announced expanded foreclosure counseling workshops to be held around the state, creation of a compact with lenders to reduce foreclosures, and state funding for voluntary third-party mediation when counseling is unsuccessful. “With additional help, the American dream of home ownership can be kept alive for more families facing foreclosure,” Governor Pawlenty said. “Foreclosures continue to hit families and our state’s economy hard. We are hopeful that connecting more homeowners with counselors and providing a neutral third-party in some cases will help keep more homeowners in their homes, without negatively impacting the availability of credit in Minnesota.” Actions announced by Governor Pawlenty today include:
Expanded Foreclosure Counseling Workshops to be held around the state Governor Pawlenty announced a series of expanded mortgage Foreclosure Counseling Workshops around the state that bring lenders and borrowers together in one location. These workshops, sponsored by the Minnesota Home Ownership Center, will be greatly enhanced with additional lender participation. Lenders are being contacted directly by Department of Commerce to participate in these events. Mortgage lenders and servicers will meet directly with homeowners to review their individual situation, and when possible, modify the terms of the loans in an effort to prevent foreclosure. The first four expanded workshops will be held:
Tuesday, April 22, 4:30-8:30 p.m.
Tuesday, May 13, 4:30-8:30 p.m.
Tuesday, May 20, 4:30-8:30 p.m.
Thursday, June 5, 4:30-8:30 p.m.
Additional workshops in St. Cloud, Rochester and Duluth are being planned. More information is available at www.hocmn.org. At Foreclosure Counseling Workshops, homeowners can ask questions and receive free and confidential advice from non-profit foreclosure counselors and mortgage lenders. The events are free and open to the public. There is no registration required and homeowners may stop by any time during the “open-house” style events.
Lenders and servicers asked to sign Minnesota Foreclosure Prevention Compact Governor Pawlenty is asking lenders and servicers to sign a compact and agree to efforts to reduce foreclosures in Minnesota. The Department of Commerce has been meeting with lenders and servicers regarding the compact. Principles of the Minnesota Foreclosure Prevention Compact include:
Mediation funding to assist homeowners when counseling is unsuccessful Because there are times when counseling cannot resolve issues surrounding a possible foreclosure, Governor Pawlenty has directed Minnesota Housing and the Department of Commerce to work with the Minnesota Homeownership Center and lenders to provide access to mediators when housing counselors and lenders believe it would be effective in keeping families in their homes. Lenders and counselors have indicated that on occasion their efforts could benefit from the perspective of a neutral third party with mediation skills. Mediators will be paid for by the state through grants from Minnesota Housing. Earlier this month, Governor Pawlenty announced a $4.3 million federal grant, the second-largest such grant made to any state, to expand foreclosure prevention counseling in the state. With this funding, 37 additional counselors are being added to the statewide counseling network, for a total of 76 counselors.
Department of Commerce establishes Minnesota Foreclosure Hotline for counselors At Governor Pawlenty’s direction, the Minnesota Department of Commerce has established a hotline for loan counselors if they experience problems contacting or negotiating with lenders. The department will then be able to contact the lender or servicers to ensure they are responding and acting in good faith. The counselor hotline number is (651) 296-2569. This number should only be used by counselors and mediators, not individual homeowners. Homeowners facing foreclosure are encouraged to call the Minnesota Foreclosure Hotline toll-free at 1-866-462-6466 for information on counseling and other resources. “The last thing your lender wants is for you to fall into foreclosure,” said Minnesota Commerce Commissioner Glenn Wilson. “If you are behind on your mortgage and fear foreclosure, call your lender immediately for help or call the Minnesota Foreclosure Hotline.” Foreclosures typically occur due to unemployment or other loss of income. However, the increase in foreclosures beginning in 2006 is related to an increase in subprime loans and other non-traditional loans. Additional causes include flattening housing values, home equity cash-outs, and buyers assuming too much risk. According to the nonprofit Housing Link, there were an estimated 20,573 foreclosures in Minnesota in 2007 – an 84% increase from 2006. Housing Link is projecting between 29,000 and 37,000 foreclosures in 2008. The figures are based on sheriffs’ sales of foreclosed properties.
Pawlenty Administration’s ongoing efforts to curb foreclosures Today’s announcement continues efforts by the Pawlenty Administration to address foreclosures and predatory lending practices in the state:
The Minnesota Department of Commerce also reminds borrowers to beware of predatory lending practices. Homeowners who choose to refinance their mortgage should deal with a Minnesota licensed mortgage originator; check the department’s website at www.commerce.state.mn.us to check the licensing status. Also, call the Minnesota Department of Commerce at (651) 296-2488 or 1-800-657-3602 to report suspected mortgage fraud. To contact a foreclosure prevention counselor, call the Home Ownership Center at (651) 659-9336 or (866) 462-6466. They will identify a counselor in a specific area of the state. The web site is www.hocmn.org. |