Foreclosures drop to lowest level since 2007 | BrainerdDispatch.com | Brainerd, Minnesota

Foreclosures drop to lowest level since 2007

Posted: September 7, 2011 - 8:13pm

Foreclosures in Crow Wing County dropped in August to the lowest level since the recession began. 

Kathy Ludenia, Crow Wing County recorder, said the foreclosures, called sheriff’s certificates, for August totaled 16, the lowest number since December of 2007. 

“This certainly does look positive,” Ludenia said. 

Whenever the numbers drop the question becomes whether that is a fluke or a real trend. Past drops, such as 19 foreclosures in October of 2008, were followed with higher numbers. In all of 2010, foreclosures in Crow Wing County ranged from a low of 24 per month to a high of 57. In August of 2010, there were 26 foreclosures. In August 2009, the foreclosures numbered 33. In August 2008, the foreclosures were 38. 

The U.S. Department of Housing and Urban Development extended its Emergency Homeowners’ Loan Help application time through Sept. 15. The deadline was originally July 27,  but was extended after HUD estimated there were enough resources left to reach more struggling homeowners. But in order to be considered, people have to apply within the next week. 

The HUD emergency loan program will assist homeowners who are “at risk of foreclosure due to involuntary unemployment or underemployment, due to economic conditions or a medical condition. Eligible homeowners can qualify for an interest-free loan, which pays a portion of their monthly mortgage for up to two years, or up to $50,000, whichever comes first.”

Qualified homeowners are being accepted on a first-come, first-serve basis. Homeowners must have experienced a drop in income of at least 15 percent directly from the involuntary unemployment or underemployment because of the economy or a medical condition, HUD reported. HUD noted the mortgage assistance covers past due mortgage payments along with a portion of the homeowner’s current mortgage payment for the two years or up to $50,000. 

Ludenia said a bright spot is indicated with the notices of pendency in Crow Wing County, which indicate a foreclosure is imminent. This August there were 34 notices. Compare that to 60 notices in August 2010 and 44 in 2009.  

A mid-year report on foreclosures in Minnesota is providing a glimpse at how widespread the damage continues to be following the housing market meltdown and recession. 

With those following the industry reporting any slowing of foreclosure numbers may have more to do with a backlog of paperwork more than a change in the pendulum, it remains to be seen if the worst is over. 

In Minnesota, there were 11,257 foreclosures compared to 13,121 for the same time in 2010, according to the Homeownership Center’s mid-year report, released in August. The mid-year report covers the first six months of the year. 

“While residences are still being lost through foreclosure at rates far exceeding those of historic levels, the overall number of statewide foreclosures declined by 14 percent from the same period last year,” the report stated. “A larger decline was seen in Greater Minnesota (down 19 percent) as compared to the Twin Cities seven-county metro (down 11 percent).”

The report, compiled from polling sheriff’s offices across the state, was produced in partnership with the Greater Minnesota Housing Fund, Minnesota Housing and the Family Housing Fund, with research by HousingLink of Minneapolis.  

“While we’re encouraged by the year over year change, the trend over the last three quarters is discouraging: foreclosure sales have increased for the last three quarters,” said Julie Gugin, executive director of the Minnesota Homeownership Center in a news release. Gugin said until a sustained economic recovery is underway, Minnesota will continue to struggle with foreclosures. “We know from our data that the primary reason that Minnesota homeowners fall into foreclosure is due to the overall economy: Involuntary job loss and underemployment. We will continue to see elevated numbers of foreclosures until we see sustained improvement in the state’s economic condition.”

In Hennepin County, the foreclosures for 2010 numbered in the thousands. 

For area counties, the Homeownership Center’s mid-year report listed foreclosures for 2010 as:

• Aitkin County, 96. 

• Crow Wing County, 388.

• Cass County, 158.

• Mille Lacs County, 226.

• Morrison County, 112. 

• Todd County, 96. 

• Wadena County, 34. 

At the HUD website, homeowners are able to download an application and see a list of required documents for applicants who want to file for the Emergency Homeowners’ Loan Program. Go online to www.FINDEHLP.org or call (855-FIND-EHLP), which is (855)-346-3345, or email ehlp@mn.org, for more information.  

RENEE RICHARDSON may be reached at renee.richardson@brainerddispatch.com or 855-5852.