Facing Foreclosure? Late on house payments?
If you are, the most important thing you can do is to get help now! There are resources available for you. Several are listed below:
Home
Ownership Center of MN
http://www.hocmn.org/ForeclosurePrevention.cfm
Minnesota
Housing Finance Agency
www.mnhousing.gov
How did this foreclosure crisis come into play?
In the late 1990s the housing industry was booming, with increased demand and low interest rates. Because of these forces, many citizens rushed into misleading and confusing mortgages that allowed them to borrow outside of their ability.
These mortgages were mainly of two forms:
Adjustable Rate Mortgage (ARM)
A mortgage consisting of a changeable interest rate throughout the
term of the loan; the interest rate annually adjusts, eventually making the
premium unmanageable for the homeowner.
"2/28" ARM
Commonly known as a "subprime mortgage" this is a different
form of an ARM, where the loan begins with a two year "teaser" rate
(which the homeowner can afford), then significantly readjusts out of the
teaser rate into the full interest rate in the third year for the duration of
the mortgage.
According to the Department of Housing and Urban Development (HUD), the majority of these loans were created between 2004-2006 and they have begun to readjust, leading to the foreclosure crisis in 2006, 2007, and projected in 2008.
What is the foreclosure process?
The process is complicated, but here is a summary of the
steps in a foreclosure process:
1st missed payment
Lender calls and sends
letter
2nd missed payment
Considered in
"default"
3rd missed payment
Begin foreclosure
process
4th missed payment
Notice of foreclosure
sent to homeowner, lender attorney involved
5th missed payment
Sheriff sale date
scheduled and published for 6 consecutive weeks
6th-7th
missed payment
Sheriff
sale occurs
Home owned by bank
Mortgage given 6 month
redemption period
After 6 month redemption period
Home vacant and full responsibility
of the bank
We need the community's help.
If you believe the home next to you has been foreclosed on and you see suspicious
activity, please notify the police by calling 911.