Over 100 attend training at ARCC to learn how to help people facing home foreclosures.
FACT: There is free help for every person facing foreclosure in Minnesota.
FACT: An individual is most likely to pull out of a potential foreclosure if they get help earlier rather than later.
This information was presented at a foreclosure prevention class held Tuesday, June 10, 2008 at the Anoka-Ramsey Community College - Cambridge Campus.
"If they call six months before they have difficulties, there are more options to prevent foreclosure," noted Ed Nelson of the Minnesota Home Ownership Center.
Once a homeowner starts slipping into a foreclosure, it becomes more difficult to get out of it as the lender adds late fees and legal fees are accrued. On top of the financial burden, a person emotionally shuts down when facing a foreclosure, burdened by the shame associated with it, as well as the fear of losing their home.
"The first reaction is to hide," observed Nelson.
Counselors urge people to open their mail in order to learn about help offered through their lender. They also gather a person's financial information and help them establish a budget.
Nelson encouraged folks to call before they receive the notice from their lender that they are in foreclosure. Call when you've missed a payment or two; call when you don't know how you'll make your next payment.
While the goal is to prevent a foreclosure, that's not always the best thing in every circumstance, noted Nelson. Sometimes a person is in too deep, and it will cost too much to pull out. Sometimes a person isn't ready to be a homeowner and doesn't make enough to pay the bills that come with a house. Other times the loan is simply structured in such a way that the person can't realistically make the payments.
The free financial counseling offered through Lutheran Social Services (to all people, not just Lutherans) takes a look at the entire situation, and the counselor offers personalized advice.
Calls are answered either right away or returned within 24 hours. Unlike what often occurs with lenders, callers won't be shuffled from department to department. Help will be given right away.
"The objective of foreclosure prevention is to work with households to reach long-term solutions that are stable and affordable," said Nelson.
Even if counselors can't help pull a person out of a foreclosure, they can help them plan what they do next. The biggest step is to find affordable housing before they are homeless. That can be difficult as more landlords pull credit reports before signing leases.
Counselors help people become aware of predators who might seek to make money off their situation.
"There are no quick and easy fixes for families in foreclosure," stressed Nelson. "The scam artists make it seem like they can come in and quickly fix serious problems."
Most people don't understand how the foreclosure process works. Counselors can lead through them through the steps and inform them on their rights.
A lender has the right to refuse partial payments. This can be especially frustrating to someone who is short only a few hundred dollars. A lender can also charge late fees. The homeowner is charged for the attorney's fees that accrue while the lender is trying to protect his/her financial interests.
During the six-month redemption period following the sheriff's sale, the homeowner may continue to live in the house (unless someone besides the lender bought the home at the sale). The homeowner has one last chance to keep the house: by paying off the entire mortgage amount along with fees.
The Isanti Model
There are many myths associated with foreclosures. Some of the most common have to do with possible help coming through the legislature. Nelson pointed out that right now the government has not put a halt to foreclosures, and people can't pin their hopes on something that may or may not occur.
He expressed his hope that the people present at the training would help dispel myths and point those who need help toward it.
The grassroot effort occurring in central Minnesota – referred to as the Isanti Model by the Minnesota Home Ownership Center – is bringing many different people together to solve the "foreclosure crisis." Present at the June 10 training were representatives from local city and county governments, churches, businesses and various non-profits.
"Let's go to the next step and continue to get the word out that there is help," urged Greg Owens of Community Pride Bank in Isanti, who is helping organize the grassroot effort.
Owens hopes to get information out via word of mouth, in statement stuffers, on web sites, and by citizens initiating their own mass mailings. Posters are being created that shop owners can post in their windows explaining the help that is out there.
Learn more by contacting Owens at 763-235-2380.
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