Foreclosure Prevention Counseling Saved MN Over $260 Million in 2011

May 29, 2012 - PRLog -- St. Paul, Minn. (May 24, 2012) – More than 3,700 foreclosures were prevented in Minnesota last year, saving homeowners, lenders, neighborhoods and local governments more than $260 million, according to a study released today by the Minnesota Homeownership Center.  The report, titled “2011 Foreclosure Counseling Program Report,” analyzed information collected from homeowners seeking foreclosure counseling and outcomes from the Homeownership Advisors Network, Minnesota’s statewide network of housing counselors.

Visit http://www.hocmn.org/en/reports-fp.cfm for the complete report.

Last year more than 10,000 Minnesota families received free foreclosure prevention services from a Homeownership Advisor.  Of the closed cases where outcomes are known, 60% of these households were able to avoid foreclosure.

“The best advice we can give a homeowner that is struggling with mortgage payments is to speak with a Homeownership Advisor as quickly as possible.  These professionals are providing meaningful outcomes for Minnesota homeowners, their communities, lenders and local governments,” said Julie Gugin, Executive Director of the Minnesota Homeownership Center.  “We know that foreclosure counseling works, and are proud to announce that more than 3,700 Minnesota families remain in their homes today because of our counselors’ work.”  

Information from the National Foreclosure Mitigation Counseling Program has shown that consumers receiving a loan modification from their lender while working with a homeownership advisor paid on average $176 a month less than non-counseled clients.  In Minnesota, this translates to over $175,000 in additional direct savings to struggling Minnesota families.

Data from the Minnesota Homeownership Center is showing that the state is slowly recovering from the foreclosure crisis.  In 2011, the number of households receiving a preforeclosure notice declined by almost 24% from 2010, the number of completed foreclosures (Sheriffs Sales) declined by 17% and the number of households requesting foreclosure counseling also declined, although by a smaller margin of 16%.

The study also provided a glimpse into the demographic and financial circumstances of struggling homeowners who sought help from mortgage counselors.  According to the experiences of those seeking counseling in 2011, personal, mortgage and financial struggles are converging on many homeowners in Minnesota. The experiences reported by home owners offer new insights, such as:  
•   Home owners are balancing mortgages on less income. The majority of home owners seeking help faced either a reduction in income (36%) or a total loss of income (24%) since first taking out their mortgage. These figures are consistent with the income challenges reported by home owners in previous years.
•   Mortgages have become unaffordable for many.  57% of home owners seeking counseling dedicate more than 30% of their monthly income to their mortgage – a recognized standard of an unaffordable mortgage.   Twenty-Two percent of home owners reported dedicating more than half of their income to their mortgage payment.

Minnesota experienced 21,298 foreclosures in 2011 and while the number of foreclosures is slowly declining, tens of thousands of families continue to struggle with their finances during this sluggish economic recovery.   The Minnesota Homeownership Center will continue providing free counseling and support to homeowners seeking help in managing their mortgage. The services are available for free through 26 nonprofit partner agencies covering all of Minnesota.  

“As the economy and mortgages continue to falter, the Center will continue reaching out to homeowners across the state to let them know about this free resource that they can trust,” added Gugin, who also cautioned struggling homeowners to be careful about who they work with to help avoid foreclosure, “No one who is struggling with mortgage payments should have to pay to get help, and never sign anything you don’t fully understand.  Homeownership Advisors are available throughout the state to help.”


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The Minnesota Homeownership Center promotes and advances successful home ownership in Minnesota. Since 1993, The Center has worked to achieve its mission by empowering a network of more than 50 organizations to provide education and counseling services to potential home buyer and home owners working to sustain their mortgages.  For more information, visit www.hocmn.org.