PROPERTY RECORDS EDUCATION PARTNERS

FEBRUARY 9, 2012

Foreclosure Mitigation

Foreclosure Sales

Housing Link, 2011 data projections only

Foreclosure Trends

During 2008, a large portion of the sales were related to inflated housing values, subprime lending, and exotic mortgages

Circumstances in 2012 are related to long-term unemployment and underwater mortgages

Washington County, percent involved in foreclosure: In 2010, 1.55% of residential properties In 2006, 0.5% of residential properties In 2005, 0.33% of residential properties

Cities with Highest GainsCities with Highest Gains

Cities with Greatest DropsCities with Greatest Drops

Moorhead $197,847+24.7%Excelsior $508,437+21.7%Princeton $159,826+11.4%Prior Lake $282,139+10.7%Cambridge $126,335+10.0%

Virginia $68,033 -25.4%Mound $300,091-22.3%Forest Lake $144,983

-18.3%Wayzata $423,967-17.2%Becker $146,018-14.2%

Homes Sales Prices

RealtyTrac, December 2011

Average MN residential sale price = $200,181Average MN residential foreclosure sale price = $144,265Price reduction of 27.94%

Housing Counseling Services

Regional Partnership Approach The objective of foreclosure prevention

counseling is to work with households to reach long-term solutions that are stable and affordable.

Outreach, Training and Education Borrower workshops, door knocking, libraries, local

media, utility bills, tax statements, direct mail & more. Outreach to information & referral organizations.

Housing Counseling Services

Information about the foreclosure processCustomized plan to address household crisisFinancial counselingMortgage counselingIdentify options for preventing foreclosureAvoiding predatory practices“Smooth Transition” counseling, as needed

Housing Counseling Services

In 2010, Homeownership Advisors Network counseled 12,158 households

66% of counselees able to avoid foreclosure 89% stay in home 11% unable to stay in home

Point when seeking counseling 12% are current on mortgage but anxious 38% are less than 90 days delinquent 41% are over 120 days delinquent

H.A.R.P.

HARP – Home Affordable Refinance ProgramEligibility

Loan through Fannie Mae or Freddie Mac Current on mortgage payments LTV ratio of 125% or less Stable income

Refinance mortgage with a lower interest, fixed rate with 15 or 30 year term

Program ends December 31, 2013Participation by loan servicer is voluntary

H.A.M.P.

HAMP – Home Affordable Modification ProgramEligibility

Loan through Fannie Mae, Freddie Mac, or participating servicer

Unpaid mortgage balance less than $729,750 Mortgage payment greater than 31% of gross monthly

income Unaffordability caused by income or expense change

Modify mortgage with a lower interest rate so monthly payments are 31% of monthly income, term may extend up to 40 years.

H.A.M.P.

Three month trial modificationIf less costly than foreclosure, servicer will

make a permanent modification Interest rate fixed, as low as 2% If below market, adjust up 1% per year after 5th year Capitalize any late fees Defer a portion of the unpaid principal Incentive to pay on time of up to $5,000

Incentives to servicers to participate

Other Initiatives

FHA Short Refinance & FHA2LPHOPE Now loan modification programBank/Service Specific ProgramsNeighborhood Stabilization Program

Progress

962,000 HARP refinances completed1.7 million HAMP trial modifications began910,000 received permanent HAMP modifications$9.9 billion savings in monthly mortgage

payments1.1 million FHA Loss Mitigation interventions2.6 million HOPE Now modificationsNSP: 7,455 new or rehabbed units, 18,245 units

cleared, and 8,494 direct homeownership assistance

December 2011 National Scorecard, Departments of Treasury and HUD

E.H.L.P.

EHLP - Emergency Homeowners’ Loan ProgramEligibility

Substantial (>15%) loss of income Due to unemployment or underemployment Caused by adverse economic conditions or medical

condition

Zero interest forgivable bridge loan Pay arrearages to bring current Maximum 24 months or $50,000 Secured by junior lien Forgiven over 5-year period

E.H.L.P.

Applications were taken in 2011 through lottery

Minnesota awarded 1,786 loans 442 Greater Minnesota 1,344 Metro

Minnesota Housing received 1,231 applications for 840 loans

Loans in process

Proposed Enhancements

Blueprint for an America Built to LastBroad Based Refinancing

Expand HARP to non-GSE borrowers Streamline refinancing

Expand Eligibility of HAMPHomeowner Bill of RightsPilot Sale of Foreclosed Property to

Transition into Rental Housing12 Month Forbearances to unemployed

borrowers

www.wchra.comwww.hocmn.org

www.hud.govwww.housinglink.org

Melissa TaphornDeputy Executive DirectorWashington County HRA

mtaphorn@wchra.com(651) 458-0936

Resource Links