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5 Myths, Mistakes and Misinformation about Homebuying

5Myths_CoverImageThe Minnesota Homeownership Center has created an informative infographic that highlights 5 Myths, Mistakes and Misinformation about homebuying that circulates online or that you might have heard from friends and family when you tell them that you are interested in purchasing your first home.

 

Have you heard any of the following?

–  Hurry and buy now!

–  BIGGER is better

–  Unlike rent, your mortgage payment will never change

–  I need perfect credit to get a mortgage loan

–  New mortgage rules mean I need to put 20% down

 

Learn the reality about these 5 Myths, Mistakes and Misinformation about homebuying using this new infographic.

Use the ‘SHARE’ tab on the side of this page to share this important information with your friends and family!

 

5Myths-Mistakes-Misinformation

Click To Enlarge

Posted on: Thursday, April 17th, 2014

No News is Good News For Pre-Foreclosure Notices

ScreenCap_InfoGraphicSimply put, there’s nothing newsworthy about the number of pre-foreclosure notices issued in the first quarter of 2014 to Minnesota homeowners… and that’s a very good thing!  The number of pre-foreclosure notices came in well within expectations and continued in line with the downward trend we have seen since Q3, 2010.

In the first quarter of 2014, Minnesota homeowners received only 5,528 notices, a healthy 41% drop from the number of notices issued in the same quarter of 2013: 5,528 vs. 9,291.  The Twin Cities Metro received 56% of the notices issued (3,070) and Greater Minnesota received 44% (2,458).

As always, we use the word ‘only’ cautiously when discussing foreclosures, as it still means that more than 5,500 households are not only struggling with their mortgage, but have fallen far enough behind for their lender or lien holder to begin the foreclosure process.

The Center has put together another infographic to help visualize the data surrounding pre-foreclosure notices:

PreforeclosureNotice_Graphic_Q1_2014

(Click to Enlarge)

If you, or someone you know, is struggling with to keep up with their mortgage payments, or is worried about a FUTURE payment… don’t delay, contact a Homeownership Advisor that specializes in foreclosure today!  To learn more, or to contact your local organization, click here.

Posted on: Tuesday, April 15th, 2014

Foreclosure Prevention Counseling Works in Minnesota!

The Minnesota Home Ownership Center has released its “2010 Foreclosure Counseling Program Report” that shows that over 12,000 homeowners sought the foreclosure avoidance services of the Homeownership Advisors Network in 2010 and more than half of all homeowners were able to avoid the foreclosure of their home.

At a time when several national news reports are criticizing the effectiveness of foreclosure intervention and loan modification programs, Minnesota once again breaks the trend! No other foreclosure avoidance program in the country can rival Minnesota’s success.

“Counseling services through our statewide network of nonprofit partners are providing meaningful outcomes for communities, lenders, local governments, and most importantly, Minnesota families,” said Julie Gugin, the Center’s Executive Director “We are pleased to report that more than 5,500 families remain in their homes today because of our counselors’ work.”

The report also provides a glimpse into the demographic and financial circumstances of struggling homeowners who sought help from mortgage counselors:
 

Click To Enlarge: The Face of Foreclosure in Minnesota

A PDF of the Infographic is available here.

According to the experiences of those seeking counseling in 2010, personal, mortgage and financial struggles are converging on many homeowners in Minnesota. The experiences reported by owners offer insights, such as:

  • Homeowners are balancing mortgages on less income. The majority of homeowners seeking help faced either a reduction in income (35%) or a total loss of income (25%) since first taking out their mortgage.
  • Mortgages have become unaffordable for many. Almost two-thirds of homeowners seeking counseling dedicated more than 30% of their monthly income to their mortgage – a recognized standard of an unaffordable mortgage. 24% of homeowners reported dedicating more than half of their income to their mortgage payment.

Minnesota experienced over 25,000 foreclosures in 2010 and this rate of foreclosure is expected to continue into 2011. As Minnesotans struggle with their finances amid current economic conditions, the Minnesota Home Ownership Center will continue providing free counseling and support to homeowners seeking help in managing their mortgage. The services are available for free through members of the Homeownership Advisors Network.

If you, or someone you know is struggling with their mortgage, you can connect with your local housing counseling agency here.

Posted on: Thursday, February 24th, 2011

Subprime 2.0?

Edward Pinto, the Chief Credit Officer of Fannie Mae back in the 1980’s, has written an Op-Ed for Bloomberg titled “Subprime 2.0 Is Coming Soon to a Suburb Near You” that talks about no-money down and lowered credit score requirements for government-backed loans.  [Fair warning: this op-ed is takes an EXTREMELY negative view of the loosened underwriting standards that became prevelant in the mid-2000’s.]

One of the more interesting quotes in the article is where he cites the number of no-money down mortgages (or extremely low-money down) as a percentage of all loans:

In 1990, one in 200 home-purchase loans (all government insured) had a down payment of less than or equal to 3 percent. By 2003, one in seven home buyers had such a low down payment, and by 2006 about one in three put no money down.



Visually… this is what I’ve come up with:
 


Click to Enlarge

Now… Pinto believes we will to return to an environment of subprime lending that he refers to as “Subprime 2.0,” as the FHA continues to accept borrowers with low Fico scores and minimal down payments.

For example, the FHA’s average down payment is just 4 percent,” he wrote. “Even this meager amount disappears after adjusting for seller concessions and financed insurance premiums.


Pinto is calling for a return to hefty down payments – – a minimum of 20 percent down, with few exceptions, and believes documentation should be “iron-clad.”

NOW, couple of questions for our readers (feel free to voice your opinion in the comments): 

  • What would this mean for those of us working on affordable housing issues? 
  • Would this cause more problems than it solves?
  • Are there other solutions to affordable housing… that don’t involve simply lowering lending standards? 

One of the conferences that takes up the issue of affordable housing… and discusses related policy issues is the “Homes For All” Conference.  You can learn more about the conference here

Posted on: Thursday, September 9th, 2010

MN Foreclosure Infographic

As many of you know, Minnesota state law determines the steps that lenders and servicers must take in order to foreclose on a residential property in Minnesota.  Back in 2008, the Center created a visual timeline of this process and it quickly became one of the most frequently downloaded documents from the Center’s website.

We’re pleased to announce the Center has created a new and improved Minnesota foreclosure timeline graphic!

This consumer-friendly chart is an Infographic with pictorial representations of the different stages of foreclosure, in addition to text that helps explain each step.

Here’s an sample of the new graphic:

A high-quality PDF version is available on the Center’s website (along with over a dozen other helpful fact sheets), here.

If you, or someone you know is facing foreclosure or struggling with mortgage payments – THERE IS HELP.  The Center’s network of Foreclosure Prevention Specialists are available to help… and all services are FREE. Click here for more information.

Posted on: Wednesday, June 16th, 2010