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

Minnesota Housing Finance Agency

Lutheran Social Services Debt Counseling Services

How did this foreclosure crisis come into play?

In the late 1990's 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.