Preventing Foreclosure – How the Minnesota Homeownership Center Can Help

As COVID mortgage forbearance begins to wind down, the Minnesota Homeownership Center is continuing to spread the word that foreclosure can be prevented. Round-two of a major paid social, radio and streaming outreach campaign launched this past August, and is planned to continue into the new year. Minnesota homeowners facing financial difficulty that threatens their housing are being encouraged to connect with a foreclosure prevention advisor. These services are free and confidential. We sat down with Center president Julie Gugin to learn more.

Q:   Julie, tell us what homeowners at risk of losing their housing should be doing right now.
A:    Homeowners worried about being able to keep their housing due to financial difficulty should reach out to a nonprofit foreclosure prevention advisor as soon as possible. The earlier the situation is addressed, the more options that are available to the homeowner. The worst thing a homeowner can do is to avoid the situation, because this sets certain legal processes in motion and the options available to the homeowner begin to dwindle. [Find a foreclosure advisor here.]

Q:   What can a foreclosure prevention advisor do for a struggling homeowner?
A:    First of all, the services of one of our foreclosure prevention advisors are always free. In addition to knowing the complicated foreclosure legal process and being able to guide homeowners to the best possible outcome based on their situation, foreclosure prevention advisors are up to date on all existing and planned forbearance and financial relief programs available. While forbearance is ending for those who used it at the beginning of the COVID crisis, up to twelve months is still available to most borrowers at this time if they need it and haven’t yet taken advantage of it. Foreclosure prevention advisors also can help navigate available financial relief, such as that offered by the Hennepin Homeownership Preservation Program or HHPP.

Q:   So there’s potential financial relief available to struggling homeowners then?
A:    Well, this is one of the areas that’s hard to navigate on your own. The statewide RentHelpMN program is currently assisting renters in danger of losing their housing, and a similar program assisting homeowners, HomeHelpMN, is expected to launch late this year or early next. But some local homeowner assistance is already available, particularly to residents of Minneapolis and additional portions of Hennepin County. That’s the HHPP initiative. The Center is actually administering this program. To be eligible, you must be a homeowner living in Hennepin County, excluding the cities of Bloomington, Plymouth and Eden Prairie. In addition, you must demonstrate that your financial situation was impacted by COVID, and you must have been earning less than 50 percent of the area median income based on your household size at the time the hardship started. If you meet these requirements, you may qualify for financial assistance for past-due mortgage and interest, property taxes, homeowners insurance, homeowner association dues and more. For information, visit HennepinHPP.com. If you pre-qualify, you’ll be referred to one of our foreclosure prevention advisors to complete the process.

Q:   What about homeowners living outside of Hennepin County?
A:    While there’s no financial relief currently available outside of Hennepin County, or for residents of Bloomington, Plymouth and Eden Prairie for that matter, the HomeHelpMN program is coming soon, and a small number of additional cities and jurisdictions may launch their own assistance programs even sooner. Regardless, foreclosure prevention advisors can help struggling homeowners now to stay in their home and avoid foreclosure. And by participating in the process now, you’ll be well positioned to benefit from MNHomeHelp relief when it does come. Since 2008, our advisors have helped more than 38,500 households to successfully avoid foreclosure. This equates to more than four of every five households that come to us. That’s a really good track record, and struggling homeowners should take solace in that number.

Q:   That’s great information. Lastly, what should consumers be watching out for when it comes to scams and predatory practices in this area?
A:    That’s a great question, and one we unfortunately have to deal with whenever consumers are facing difficult situations. First off, you should never have to pay for foreclosure prevention help. Foreclosure prevention advisors, including those in our statewide network, are HUD-certified and financially supported by state and federal governments. Second, homeowners facing difficulty may be approached by firms offering to work with the homeowners’ lender to modify or refinance the mortgage for a fee. Again, foreclosure prevention advisors do this for free every day, and they have the additional advantage of having your best interest at heart as opposed to being driven by a transactional profit. Lastly, while not a scam, many firms are offering to sell your home ‘as is’ in order to get you out of a mortgage that is no longer affordable. I would urge individuals to engage with a foreclosure prevention advisor first, as this may not be necessary and the hard work expended to attain homeownership in the first place may not need to be ceded. While selling the home is certainly always an option, you want to make sure it’s the best option before doing so, and you want to make sure you’re doing it on your terms. The sell your home ‘as is’ model is not always the most advantageous model for the seller, even though the sales pitch may sound enticing.

For more information on free services available to Minnesota homeowners, click here. For information on common scams and predatory practices in the mortgage arena, see this page on the Minnesota Attorney General’s website. To connect with a foreclosure prevention advisor right away, call 651-659-9336.