8. HRSR 10-06-2008ITEM # 8.
river
MEMORANDUM
TO: Housing & Redevelopment Authority
FROM: Catherine Mehelich, Director of Economic Development i~~~
DATE: October 6, 2008
SUBJECT: Presentation by MN Home Ownership Center regarding
Mortgage Counseling Services
Attachments
• Fig. 7: MN County Foreclosures (2008 projections), HousingLink Report, April 2008
• League of MN Cities handout - "What Local Government can do to Address
Foreclosures"
• MN Home Ownership Center materials
Issue
Staff has invited Mr. Ed Nelson, Communications Manager for the Center, to provide an
overview of the foreclosure issue in Minnesota and the Center's outreach programs and
services available to Elk River households.
Background
The MN Home Ownership Center is a nonprofit agency that connects homeowners to
information, homebuyer education and loan counseling services. The Center provides these
services through its network of community-based organizations throughout the state. The
Center's role is to provide these organizations with training, technical and financial support.
Most recently the Center has been focusing its outreach efforts to provide foreclosure
prevention services in communities that are projected to experience the highest rates of
foreclosure in 2008 -Sherburne County being ranked as #8 among Minnesota counties.
Figure 7: Minnesota COUnty FOreCloSUreS (sorted by 2008 projected foreclosures)
# of Foreclosures 05-06 06-07
2005
2006
2007 Percent
Change Percent
Change
TC Metro Totals 3,759 7,039 12,974 87% 84%
Greater MN Totals 2,707 4,168 7,430 48%Z 48%'
Minnesota Totals 6,466 11,207 20,404 73% 71%°
1 Henne in 1,681 3,042 5,561 81% 83%
2 Ramse 626 1,407 2,352 125% 67%
3 Dakota 459 880 1,610 92% 83%
4 Anoka 520 849 1,680 63% 98%
5 Washin ton 244 414 878 70% 112%
6 Scott 148 328 606 122% 85%
7 Wri ht* 753 -- --
8 Sherburne 210 341 673 62% 97%
9 Stearns 136 219 375 61% 71%
10 St. Louis 219 319 359 46% 13%
11 Isanti 80 196 322 145% 64%
12 Carver 81 119 287 47% 141%
13 Crow Win 231 -- --
14 Olmsted 158 237 342 50% 44%
15 Mille Lacs 61 103 229 69% 122%
16 Le Sueur 39 70 174 79% 149%
17 Chisa o 108 172 307 59% 78%
18 Rice 79 147 237 86% 61%
19 Goodhue* 153 -- --
20 Freeborn 80 95 110 19% 16%
21 Pine 84 116 217 38% 87%
22 Benton 36 98 176 172% 80%
23 Steele 64 91 123 42% 35%
24 Carlton 41 46 79 12% 72%
25 Blue Earth 57 101 143 77% 42%
26 Mower 103 146 142 42% -3%
27 Kanabec 35 64 97 83% 52%
28 McLeod 56 72 142 29% 97%
29 Itasca 77 64 73 -17% 14%
30 Cass 33 78 91 136% 17%
31 Morrison 52 77 93 48% 21
32 Beltrami 18 28 78 56% 179%
33 Becker 25 29 50 16% 72%
34 Dou las 44 40 78 -9% 95%
35 Wabasha 28 38 47 36% 24%
36 Kandi ohi 68 53 72 -22% 36%
37 Dod e* 77 66 -- -14%
38 Todd 36 48 68 33% 42%
39 Winona* 39 58 -- 49%
40 Sible 25 42 54 68% 29%
41 Aitkin 18 35 47 94% 34%
42 Otter Tail 59 92 89 56% -3%
43 Cla 36 44 70 22% 59%
44 Renville* 47 -- --
Foreclosures in Minnesota: A Report Based on Sheriffs Sale Data (April 2008)
HousingLink 612.522.2500
# of Foreclosures 07-08
Q1
2008
2008'
(Projected) Percent
Change
Projected)
4,213 19,936 54%
2,175 8,346 12%
6,388 28,282 39%
1,823 8,585 54%
737 3,419 45%
552 2,637 64%
475 2,268 35%
297 1,393 59%
248 1,241 105%
268 1,190 58%
125 559 -17%
119 463 23%
113 431 20%
105 404 25%
81 393 37%
104 359 55%
88 347 1%
59 275 20%
52 272 56%
77 249 -19%
60 229 -3%
55 220 44%
47 192 74%
51 190 -12%
41 176 0%
39 142 15%
31 136 73%
34 125 -13%
40 123 -13%
33 101 4%
27 93 -35%
26 92 26%
27 90 -1
31 90 -3%
21 87 12%
19 84 69%
26 83 7%
24 78 67%
22 76 5%
24 73 10%
22 70 3%
24 70 21%
18 68 26%
14 67 43%
18 60 -33%
16 52 -26%
15 52 10%
Page 17
WHAT LQCAL GOVERNMENT CAN DO TQ ADDRESS
FORECLOSURES
Fareclasure P~eventian and Education
Early Outreach to Foreclosure Impacted Households: Partner with the Minnesota Home Ownership Center to
implement a Foreclosure Prevention Education Campaign, including hosting borrower's workshops for consumers,
inserting foreclosure prevention information in tax statements and utility bills, encouraging agencies encountering
consumers in crisis to have their agency staff attend a Foreclosure Prevention Training and to sign up for the Home
Ownership Center's listserve. For more information on workshops contact the Minnesota Home Ownership Center at 651-
659-9336 or http://www.hocmn.org/
Actively Provide Local Referrals: Refer homeowners and renters to
trusted local and regional foreclosure prevention and credit counseling
organizations.
Reach Out To Local Renters in Foreclosed Units: Partner with
HOME Line, Legal Aid, and Southern Minnesota Regional Legal
Services (SMRLSI on their outreach campaign to renters. Direct
renters to these organizations to receive free legal advice about their
rights and options during foreclosure. For example, HOME Line at 1-
866-866-3546 (or see http://www.homelinemn.or~ and see Minnesota
attorney Generals Office for rights and duties of landlords and
tenants at http•//www ag state.mn.us/Consumer/housing/lt/default.asp )
Provide Helpful Literature and Web Links: Distribute materials
through city departments, utilities, and local non-profits, and provide
links on your city web site to trusted foreclosure prevention counseling
resources such as Minnesota Home (Jwnerslup (;enter, [ I01IF:Line
tenant hotline at (866) 866-3546, the Attorney General's Office, and
lawhelpmn.org about the availability of services and other resources to
assist home owners and renters..
How Cities Are Communicating
About Local Foreclosures
• Post foreclosure information on city website
• Insert information in utility bills
• Host a foreclosure educational workshop
• Provide counselors at city hall once a week
• Use door to door outreach techniques
• Use local media: cable TV and newspapers
• Work with local community and faith
organizations to expand outreach in targeted
areas.
• Designate city staff and neighborhood leaders as
foreclosure information coordinators.
Promote "Don't Borrow Trouble" Consumer Education: Don't
Borrow Trouble is a public education initiative that seeks to educate families and individuals about how to avoid predatory
lending scams. The Don't Borrom Trouble help line has been established at 612-312-2020 to offer families a safe place to call
befare they sign anything that puts their home at risk (http://www.dontborrowtroublemn.org/01.htm.)
Foster Pre-Purchase Counseling for New Homebuyers: Partner with the :Minnesota Home Ownership Center. and its
member agency in your area to implement a communications strategy that encourages prospective homes owners to attend
pre-purchase training'- or seek assistance from a trusted advisor before signing any documents related to their homes.
Increase Access to Affordable Financing: Publicize lending tools that may assist home owners in distress, including
home repair funds.
City Management Qf Vacant Fropert~es
Revise Rental Licensing and Housing Codes: Re-examine rental licensing programs and housing codes and revise or
add to where needed to prevent lack of deferred maintenance and the lack of safety and security of affected housing stock.
Effective ordinances include Point of Sale Code Compliance
ordinances, Public Nuisance Abatement ordinances, Long Grass
Ordinances, etc. s If your city does not license rental properties,
consider licensing as a method of tracking changes in use from
ownership to rental and inspecting rental building conditions.
Step Up the Use Legal Remedies: Enforce administrative code and
use legal remedies. See list of helpful city ordinances to the right. Legal
remedies can include, for example, tenant remedies actions and
nuisance actions which can be brought by a local government, a local
community group, a tenant, or other concerned parties.
Track Your City's Foreclosures and Sub-Prime Loan
Concentrations: Track existing foreclosures and use external and
internal data resources (such as city early warning systems4 and the
Federal Reserve data on sub-prime loan concentrations) in a
coordinated city/county-wide manner to predict future distressed
homeowners and manage vacancies. For example, some cities tag homes
that appear vacant or have not paid their monthly water bill and leave
information requesting the homeowner contact the city within several
days - if no contact is made, the city turns off the water to the
properry~.
Implement Ordinances to
Address Foreclosure Impacts
• Point Of Sale Code Compliance Ordinance
• Vacant Building Registration
• Public Nuisance Abatement (removal of
junk cars, garbage, building materials)
• Long Grass Ordinance
• Recoup Vacant Property Monitoring and
Board Up Costs
• Recoup Costs Of Excessive Use Of
Services
Track Vacant Properties: Employ a vacant and/or boarded property registry and ask community residents to report
vacant properties immediately.
Educate Landlords: Educate landlords on obligations under city ordinances and state laws regarding property
maintenance, rental licensing.
Creative Board Ups: In areas where board-ups are rampant consider
use innovative boarding techniques, such as artistic board-ups
Acquisition, Rehabilitation
Neighborhood Recovery
Target Public Funding and Financing Tools: Publicize financing
tools that may assist new home owners to acquire and rehabilitate
foreclosed properties. Examples include a The City Living Program in
St PauF , Northside Home Fund in Minneapolis s, City Advantage in
Minneapolis, HUD 203(k) loans10, Minnesota Housing's CASAt~ and
Fix-up Fund, 1'- and use of local HRA levy dollars in key areas.
Develop New Strategic Partnerships: Build partnerships with for-
profit and non-profit redevelopers, lenders, realtors and other
community based organizations that focus on the recovery of specific
targeted geographic areas of your community.13
Explore Bulk Purchasing Strategies with Local Developers and
Lenders: Partner with local non-profit and fox-profit developers to
negotiate bulk purchase of properties from lenders to proactively
revitalize affected neighborhoods and prevent foreclosed homes from
falling into the hands of unscrupulous speculators.
Coordinate Early Warning Data an
Foreclosures and Sub-Prime Loans
to Target Outreach. and Remediation
Efforts
• Track Utility Billing (Late Payers) And Usage
To I.D. Vacant Homes and Prevent Water
Damage
• Track City Inspection And Enforcement Reports
• Monitor Federal Reserve Data On Sub Prime
Loan Concentrations By Local Zip Code
• Monitor County Sheriff Data To Track Street
Address Level Foreclosure Locations
• Monitor State Foreclosure Reports At GMHF
And Housing Link Web Sites
• Monitor Values Through County Assessor Data
and Property Tax Records
• Monitor Police Reports to LD. Problem
Properties
WHAT LOCAL GOVERNMENT CAN DO TO ADDRESS
Foc~,os~~s
More Detail on Foreclosure Recovery Strategies and Resources
~ HELP FOR RENTERS IN FORECLOSED APARTMENTS: For a copy of a fact sheet on how to deal with a foreclosed rental property as a
tenant, please see: When Your Landlord Loses The Building: Mort>;aee. Foreclosure see: httn'/lwww lawhet~or~~documcnt5'41 ~ 1 H-
14°i~,20 W hcu`%,20Your°i°20Landlord%~OLoses`%20the°/,208 ui Idint=.pdf?stateabbrev=!M ~i
' HOME OWNER EDUCATION AND FORECLOSURE COUNSELING: For more information on foreclosure prevention related
homeowner education see httn:/www.hocmn.or~/map.eftn?pa~eID==S.
' POINT OF SALE CODE ENFORCEMENT ORDINANCES: For information on Point of Sale Code Compliance Ordinances, see this
example from the City of Richfield: "Point of Sale code Compliance" brochure:
htt~:_~_w~~~,ci.richfie]d.~Tnt.us/Police'Inspections%PointofSaleBrochure pdf
' F,ARLY WARNING SYSTEMS FOR FORECLOSURES: For more information on the use of early warning systems for cities experiencing
increasing foreclosures contact Kellie Jones at the City of Minneapolis at 612- 673-3506 or Kellie.Jones@ci.minneapolis.mn.us.
' SUB PRIME LOAN CONCENTRATIONS -WHERE FUTURE FORECLOSURES ARE MOST LIKELY: To obtain data on Sub-Prime
Loan Concentrations by Zip Code from the Federal Reserve contact Michael Grover at 612-204-5172 or michael.grover@mpls.frb.org.
e HOW ONE COUNTY IS RESPONDING TO FORECLOSURES: For examples of how counties can respond to foreclosures, see: Henne~~
('ounty foreclosure 'T'ask h'orce Reporl:
http://www. co. hennepin. mn. us/images/HClnternetlYCG/Newsroom/Files%20PA/mortgage_clo sure_web.pdf
~ HOME PURCHASE LOAN PROGRAM EXAMPLE: For more information on Saint I'aul'v CiivLivinv Home Praararn designed to assist
homebuyers with purchase and rehabilitation of homes, see http://www.stpaul.gov/index.asp?NID=2350
s STRATEGIC NEIGHBORHOOD REMEDIATION FUND EXAMPLE: For more information on the Northside Home Fund which is
designed to foster redevelopment of vacant and boarded homes, and seeks to leverage additional investment and enforcement tools needed to
improve surrounding properties. The focus is on small geographic redevelopment areas, or "clusters", intended to make a noticeably positive
impact on foreclosure impacts, improve the area's housing stock and to stabilize and strengthen the homeownership market. Contact Jill Kiener at
jilLkiener@ci.minneapolis.mn.us and review http•/%www ci minneapolis mn u~icped~docs/nhf brachure.ndf.
e FORGIVEALBLE DOWNPAYMENT LOANS: For more information on Minneapolis Advantage Home Loan Pro gram (for targeted
neighborhoods), which offers a $10,000 zero-percent interest rate loan that is forgivable over five years to anyone buying a home in which they
will live in these eliaibte neighborhoods (PDF). Loan Program Guidelines are available at:
http:~; ww~~~ ci minnea~lis mu uslcped~docs'l~inal ~inls Advantage Guidelines pdf
Also see: htto~'~www ci mimteapolis mn us/c~ed/minneapohsadvantage borne aSp
10 HUD HOME LOANS.For more information on HUD loans, see http:;/www.bud.goy;ofticeslhs~~~~sthi2031c1203kabou.efin
~ FIRST TIME HOMEBUYER LOAN PROGRAMS: For more information on Affordable Mortgages for First-Time Homebuyers through
Minnesota Housing's Community Activity Set Aside (CASA) Loan Pro rG am for first time homebuyers that helps lo~~~ to moderate income
1~~linnesotans buy a home. The affordable, low, fixed interest rates for up to 40 years are available to eligible homebuyers through lenders
participating in initiatives in several communities around the state. l~iomebuyer cducatiort is required for all borrowers receiving a CASA loan.
sce http_/_!www.mnhousin~.$ov%consumers/home-buyers/loans/MHFA 000469.asnx Also see Minnesota Housing's downpaymeut and closing
cost loans through the Homeownership Assistance Fund (HAF) which provides the opportunity for eligible tar<reted borrowers who qualify for an
interest-free, deferred loan to help with downpayment and closing costs. See: httl~x//www.nmhousing.goviconsumers/home-
buycrs/loansiMHFA__ 003407.aspx
12 MINNESOTA HOUSING'S FIX UP FUND PROGRAM: For more information on Minnesota Housing's Fix-up Fund, see
hip? '/ww~~~ ntnheusi~n~oviconsumers~ttome-owners'Homelm~rovetnentLoanslindtx.ashx
~' NORTHSTDE HOME FUND -STRATEGIC CLUSTER REDEVELOPMENT PROGRAM:
httn:%!www.ei.minneanolis.mu.us/eped/flocs/uhf brochure.~pdf
This document was prepared by: Minnesota Foreclosure Prevention Council, Greater Minnesota Housing Fund, httt?:%ltivww.gmhfcom
t ;
Minnesota t ~
Home_Ownership
Center
Your home is probably your most valued investment. But with today's economic and mortgage
concerns, it's no wonder many Minnesotans are beginning to ask questions about how the
changing economy could impact their ability to keep their home.
The Minnesota Home Ownership Center is a nonprofit information resource for homeowners,
and developed the following questions to help you think about whether you would benefit from
the Center's support resources.
Check if YES
Are you worried about being stuck in your mortgage?
- Do you have anon-traditional loan or potentially changing payments?
- Are you concerned that you won't be able to make the payment when
your rate adjusts?
- Are changes in the real estate market forcing you fo reconsider how
long you will keep your home?
At the end of the month, do you find yourself struggling to get ahead,
or even to keep up?
- Has a job change, illness, unexpected bill or alife-changing event
(e.g., a divorce or a new child) changed your economic situation?
- Are your mortgage payments becoming hard to balance with rising
costs for gas, food and other needs?
- Have you ever asked, "Which bill should I pay first?"
Are you questioning the future because you worry about how you will
make ends meet today?
- Have you ever taken a loan on your 401 k to make a mortgage payment?
- Are you using a child's college savings to keep up?
If you answered "yes" to any of these questions, you aren't alone.
For 15 years, the Minnesota Home Ownership Center and its network of mortgage support
counselors across the state have helped home owners like you. Call today at (866) 462-6466 for
free help understanding your loan and protecting your home.
The Center's only stake is in your future, so you know its counselors will provide unbiased and
solid information you can count on.
www.hocmn.org
As you think about your home and your mortgage, consider:
. Are you feeling stuck in your mortgage?
. At the end of the month, do you find yourself struggling
to keep up?
If you answered "yes" to these questions, join the telephone seminar
sponsored by the Minnesota Home Ownership Center.
Wednesday,
October 15
7:00 to 8:00 PM
Call: (888) 886-6603
Minnesotat ~t1. t
Home Ownership
Center
Call the seminar anytime, from 7:00 to 8:00 pm on October 15 to listen to the
radio-format conversation. And you can visit with experts from the comfort and
confidentiality of your own home.
. Ask about options for "work out" with a lender
• Hear about home owners who benefited from speaking with a mortgage
support advisor
• Learn whether personal help from a mortgage support advisor is right for
you.
Don't wait until you've missed apayment -
Join the conversation today to look out for your home,
your family and your future.
For more information, visit www.hocmn.org