2008-05-20_Agenda - Laserfiche WebLink

Home

GOVERNOR PAWLENTY ANN4UNCES ADDITIONAL ACTIQNS TO ASSIST HO... Page 2 of 3 Lenders and servicers asked to sign Minnesofa Foreclosure Prevention Compaci Governor Pawtenty is asking lenders and servicers to sign a compact and agree to efforts to reduce foreclasures in Minnesota. The Department of Commerce has been meeting with lenders and servicers regarding the compact. Principles of the Minnesofa Foreclosure Prevention Compact include: • Work with mortgage foreclosure prevention counselors, and when necessary, parlicipate in voluntary mediatian. • Participate in all Foreclosure Counseling Workshops in Minnesota. • Engage in a substaniia! and large-scale loan modificaiion effort ior subprime mvrtgages and adjustable raie mortgage resets. • Identify, evaluate and make good. faiih attempts to contact at-risk or defaulting borrowers as soon as possibEe. • Modi4y loa�s to ihe extem permissible within existing fiduciary, contrsctual or other legal o6ligations and in accordance with prudent mortgage fending and servicing practices. • Report progress ro the Minnesola Department of Commerce. Mediation fundinq to assist homeowners when counselinq is unsuccessful Because there are times when counseling cannot resotve issues surrounding a possible foreclosure, Governor PawlenYy has directed Minnesoia Hausing and Ihe Department of Commerce to work with the Minnesata �tomeownership Center and lenders to pra�ide access to mediators when housing counsefors and lenders believe it wauEd be effecti�e in keeping families in their hames. Lenders and counselars have i:ndicated that an occasion their efforts could beneiit fram the perspective of a neutral third party with mediation skills. Nfediators will be paid for by the state ihraugh grants from Minnesota Housing. Earlier ihis manth, Governor Pawlenty announced a$4.3 million federal grant, the second-largest such grant made to any stale, to expand ioreclosure pre�eniion counseling in the siate. With thks fundtng, 37 additional counselors are being added to ihe statewide counseling network, for a toSaf of 76 counselors. Deoartmenf of Gommeree estahtishes Minnesota Foreclasure Hotiine for eounselors At Govemor Pawlenty's directian, the MVnnesota Department of Commerce has established a hotline far Ioan caunselars if they experience problems contacting or negotiating wilh lenders. The department will then be able to contact the lender or ser�icers to ensure ihey are responding and acting in good faith. The counselor hotline number is (651) 29fi-25fi9. This number shauld only be used by counselors and mediators, nol individual homeowners. Homeowners facing foreclosure are encouraged to call the Minnesota Fvreclosure Hotline toll-free at 9-8fi8-b62- 6466 for information an counseling and other resources. "The last Ehing your lender wants is for you ta fall into foreclosure," said Minnesota Cvmmerce Commissioner Glenn Wilson. "If you are behind on your mortgage and fear foreclosure, call your lender immediately for help or call the Minnesota Foreclosure Hatline." Foreclosures typically occur due lo unemploymer�t or olher loss of in.come. However, the increase in foreclosures beginning in 2006 is rela4ed to an increase in subprime loans and other non.-traditional loans. Addifional causes include {lattening housing values, home equity cash-outs, and buyers assuming tao much risk. According io the nonprofit Housing Link, there were an esiimated 20,673 toreclosures in Minnesoia in 2007 — an 84% increase from 2006. Housing Link is projecting between 29,000 and 37,000 foreclosures in 2008. The figures are based on sherifFs' sales of foreclosed properties. Pawlenty Administration's ongoina efforfs to curb foreclosures http:/Iwww.governor.state.mn.us/mediacenier/pressreleases/I'ROT)008821.htm1 4/15/2008