03-07-2011 HRA MIN - Laserfiche WebLink

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Housing & Redevelopment Authority March 7, 2011 • Commissioner Toth asked if LSS is automatically notified when a homeowner is behind. Ms. Ostlie explained that when a homeowner is delinquent by one month, the lender must provide them with notice and a phone number to call if they are facing a hardship. The servicer/mortgagor must also notify housing counseling agency (LLS in this area). LSS sends numerous informational packets to them, but LSS cannot do anything until the homeowner contacts them. Commissioner Kuester asked when contacting banks, what difficulties are encountered. Ms. Ostlie stated that homeowners are often not prepared with all of the information they need. She explained that each state has a different process. She noted that lenders may not be aware of laws in specific states, and they are not the decision makers. She explained that the investors decide if it is possible to rework a mortgage. Commissioner Toth stated that he was told by someone going through the foreclosure process that they were continually told their information was "out of date" and kept asking for new information. Ms. Ostlie stated this is a common problem, since the information must be less than 30 days old. She stated that the biggest frustration of homeowners is that they get a different person and a different story every time they call. LSS's job is to make sure they have all of the information when they speak with the lender. Commissioner Kuester stated that providers are changing all the time, and can understand people getting very frustrated. Ms. Ostlie stated that LSS has specific phone lines they can go through to talk with the right person. She explained that Fannie May holds 30% of all the mortgages in Minnesota and that have now officed two of their staff to assist them. Ms. Ostlie stated that homeowners need to make sure complaints are filed with the Attorney General's office if there are problems. Chair Wilson asked what kinds of fees are being charged by scammers. Ms. Ostlie stated fees are anywhere from $200 to $3,500. She stated that she talks to at least one homeowner a day that has been approached by a scammer. She explained that foreclosures are public information, so homeowners are often bombarded with mailings, phone calls, and knocks on their doors. Commissioner Toth asked with the response has been to the foreclosure forums. Ms. Deckert stated that 15 attended the first forum; 20 attended the second; and 25 were in attendance when she spoke at the American Citizens League. She noted that many flyers with foreclosure information have been distributed. Staff will continue to keep the HRA updated on foreclosure issues. The Bluffs of Elk River Commissioner Moon stated that the intent of the Bluffs housing project was the units would be owner-occupied. Commissioner Toth suggested that it may be better to have the units occupied than empty, if they are not selling. Commissioner Motin stated that he would like to know what action could be taken if renting continues long term. Chair Wilson stated that by renting some of the units, the property owner will at least have some income to cover maintenance and taxes. Discussion followed regarding the status of some of the units. Ms. Mehelich stated that 16 of the units are finished, with 10 of those being occupied. She noted that originally some of the rental leases were structured for 3 months and some are now up to 12-month leases. • Page 3