Posted at 4:07 PM on November 6, 2009
by Paul Tosto
Filed under: Housing & mortgages
News Thursday that federal mortgage giant Fannie Mae had a plan to ease the pain of foreclosure by letting eligible families stay for a year or more as renters sounded like a novel way to buy some time for people who are losing their homes.
But the reality is it will probably have little impact. We reported Thursday that it didn't look like a silver bullet to the problems of people displaced by foreclosure.
Today, we checked in with banker Rick Beeson, President and CEO of Park Midway Bank in St. Paul and a source in MPR's Public Insight Network. He told us:
This seems like an effort that could have modest success, but not a major impact.
Yes, there would be owners who would want to salvage their credit scores, although most have had them damaged at that point anyway. Yes, it allows them to pay a "market-rate" rent uninterrupted for a year, although many choose the now socially acceptable route of bankruptcy stalled foreclosure, which allows them to stay in the home over a year with NO payments whatsoever.
It's clear from the detail that Fannie Mae's plan will require lots of cooperation between the lenders, the homeowner and the government to make it work. And we haven't seen a whole lot of that kind of unity when it comes to problems like short sales.
If you're in a foreclosure situation, or know someone in a foreclosure situation, in Minnesota, you may be better off reading the local options laid out by the Minnesota Home Ownership Center.
A Minnesota law that took effect this summer allows people to delay a foreclosure sale for five months.
Here are answers to some frequently asked questions about that law.
The foreclosure pace has eased in Minnesota in 2009 compared to last year. But that doesn't make the pain any easier if you're losing your home.
And given the worries about a next wave of mortgage problems, the search for solutions isn't over.
Click on the map icons to read what Minnesotans in our Public Insight Network have been telling us about the mortgage and housing situation around them. Then share a story.