More than 4,000 foreclosures were prevented in Minnesota last year as a result of the state's nonprofit foreclosure counseling network, according to a study released by the ""Minnesota Home Ownership Center"":http://www.hocmn.org/. The organization said these efforts saved homeowners, lenders, neighborhoods, and government agencies approximately $300 million, with the state's local governments alone recouping approximately $90 million because of the foreclosures prevented.
The Minnesota Home Ownership Center analyzed information collected from homeowners who sought foreclosure guidance and counseling outcomes from the statewide network of mortgage support advisors. The results: last year 11,809 homeowners in Minnesota received counseling from a mortgage advisor - a 145 percent increase over the number of homeowners counseled in 2007.
Julie Gugin, executive director of the Minnesota Home Ownership Center, commented, ""Counseling services through our statewide network of nonprofit partners are providing meaningful outcomes for Minnesota homeowners, communities, lenders, and local governments. We are pleased to report that more than 4,300 families remain in their homes today because of our counselors' work.""
The study also provided a glimpse into the demographic and financial circumstances of struggling homeowners who sought help from mortgage counselors. According to the Minnesota Home Ownership Center, of those seeking foreclosure counseling in 2008, personal, mortgage, and financial struggles all contributed to their inability to fulfill their homeownership commitment.
For example, the center said, homeowners are balancing mortgages on less income. The majority of homeowners seeking help in Minnesota faced either a reduction in income (35 percent) or a total loss of income (15 percent) since first taking out their mortgage.
In addition, the study found that mortgages have become unaffordable for many in the state. More than two-thirds of those counseled dedicate more than 30 percent of their monthly income to their mortgage - a recognized standard of an unaffordable mortgage. And nine percent of homeowners reported committing more than 75 percent of their income to their mortgage payment.
Last year, the Minnesota Home Ownership Center said, 56 percent of the homeowners who sought foreclosure counseling had children or dependents living in the home with them. And middle-aged families are being hit the hardest, the center said, with 62 percent of those looking for assistance falling between the ages of 35 to 54.
Gugin added, ""The data collected by our counselors through the course of their work is painting a new, clearer picture of the homeowners in Minnesota who are struggling. We're seeing that the economic downturn, unconventional loan products, and everyday life - from the birth of a child to divorce and unexpected illness - are converging on many homeowners and making their mortgage increasingly unaffordable.""
Minnesota experienced 26,000 foreclosures in 2008 and the rate is expected to continue into 2009. As Minnesotans struggle with their finances amid current economic conditions, the Minnesota Home Ownership Center says it will continue providing free counseling and support to homeowners seeking help in managing their mortgage. The services are available for free at 26 nonprofit partner agencies covering all of Minnesota.
Minnesota Home Ownership Center is a nonprofit organization that promotes successful and sustainable homeownership for low- and moderate-income Minnesotans through counseling and education services for first-time home buyers and those struggling with foreclosure. The center coordinates and provides programming and technical assistance to a statewide network of nonprofit agencies providing direct services.