Discuss this with your home inspector

During the last eight years there have been many homes that  sat vacant and then were rehabbed. When the banks obtained the homes they did not get a sellers disclosure and when they sold the homes they could not provide a sellers disclosure for the buyer. In some cases the buyers rehabbed the homes and sold them and those homes are now occupied.

Some of buyers of these rehabbed homes are running into old problems that would normally appear on sellers disclosures. There are roots growing in sewer lines and mold in the walls from water leaks that were fixed long ago, but where never disclosed because there was no disclosure.

There are some things buyers can do to protect themselves:

1.  Have a complete home inspection.

2.  Pay close attention to the City Truth in Housing inspection report and share it with the home inspector.

3.  Look up the home on the city of St. Paul property look-up and look for permits for repairs. There is a lot we can learn by looking at permits or when we find work done without permits.

I am running into properties in St. Paul that have changed hands so many times in the last decade that no one knows much about them. Some were vacant for a few years before they were purchased and rehabbed.

Also see: Things to check in a house that has been rehabbed



Back to work program


Good news?  The bank took your home but now they have decided that if you had an economic hardship you should get to buy another home.  Perhaps the zilions of foreclosures during the great recession were not due to economic hardship and the collapse of the housing market?  At any rate this is supposed to be good news.   “FHA “Back to Work” Program

On August 15, 2013, the Federal Housing Administration moved to relax its guidelines for borrowers who “experienced periods of financial difficulty due to extenuating circumstances”.

Dubbed the “Back To Work – Extenuating Circumstances Program”, the FHA removed the familiar waiting periods that typically followed a derogatory credit event.
If potential home buyers have experienced any of the following financial difficulties, they may be program-eligible:

Pre-foreclosure sales
Short sales
Chapter 7 bankruptcy
Chapter 13 bankruptcy
Loan modification
Forbearance agreements
What are the minimum eligibility requirements of the FHA “Back To Work” program?

In order to qualify for the FHA Back To Work program, you must meet several minimum eligibility standards. The first is that you must have experienced an “economic event” (pre-foreclosure sale, short sale, deed-in-lieu, foreclosure, Chapter 7 bankruptcy, Chapter 13 bankruptcy, loan modification, forbearance agreement, etc). The second is that you must demonstrate a full recovery from the event. Third, you must agree to complete housing counseling prior to closing. You must also show that your household income declined by 20% or more for a period of at least 6 months, which coincided with the above “economic event”.

The FHA realizes that sometimes credit events may be beyond the borrower’s control and that credit histories don’t always reflect a person’s true ability or willingness to pay on a mortgage.”

. . .of course in the past mortgages were approved everyday for people who could not pay them back but that is a separate issue maybe or something.  

Does anyone ever truly recover from the loss of a home due to foreclosure?

Short sales and incentives


 Currently there are “incentives” available for home owners who are struggling to pay their mortgages and who have loans through Bank of America and other major lenders to work with the bank on a short sale, deed-in-lieu or mortgage loan modification.  

I recently represented a seller on a short sale and worked with Bank of America.  They did offer my seller several incentives.  There was more than one loan against the home and the incentives were enough to get the approval for a short sale on two loans.  Sellers can walk away with no out of pocket expenses and a little cash if they cooperate with the lender on a short sale. 

Short sales are still very slow as compared to traditional sales but we are seeing more of them close and they are going a bit faster than they have in the past.

A short sale is when a bank accepts less than what is owed on a property as a payoff for on the mortgage.  Sellers should retain an agent who has experience with short sales.  They are a lot of work for agents as banks take advantage of the fact that we work for free unless the sale closes.  If you are “under water” on your mortgage contact your lender and ask about a short sale.  

Short sales continue to make up a larger share of our housing market and they will be common for at least the next few years.   

*shorts don’t have anything to do with short sales. 

There really is such a thing as prevention

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Sometimes foreclosure can be prevented.  Those in need of help should try the friendly folks at the Minnesota Home Ownership Center. 

The services are free and here are some results that have just been published in the 2011 foreclosure prevention report

Foreclosure prevention services and outcome:

In 2011, the Homeownership Advisors Network provided foreclosure counseling services to 10,178 homeowners.

Sixty percent (60%) of the homeowners receiving counseling services were able to avoid foreclosure. Among those who averted foreclosure, 89% were able to stay in their home, and 11% were unable to stay in their home.

Over the past four years, the Network has helped nearly 25,000 homeowners avoid foreclosure.

While the Center’s network continues to manage a high volume of clients, the numbers served in 2011 represents a decrease of 16% over 2010 service. This reduction mirrors a similar decrease in the actual number of households experiencing foreclosure in 2011.

The Twin Cities Metro region served the most clients (and has the largest population) but had one of the lowest decreases in clients (11%) served between 2010 and 2011. However, examining the distribution of all households served by region shows that there has been little change in the relative proportion of households served statewide.


get your independent foreclosure review

This is a public service message as we are all trying to get the word out.  . but tomorrow I will go back to our regular program once I figure out what that is. 

Read this only if you think it is possible that a mindless money grubbing corporation could make a mistake or intentionally do something wrong. 


 Do you qualify for an Independent Foreclosure Review or any remedies under the National Mortgage Settlement (Attorney Generals’ Settlement?)

What’s Available?

Options vary but may include:

– Direct payments to borrowers, estimated at $2,000 if home was lost to foreclosure;

– Refinance options for underwater mortgages;

– Loan modification assistance including principal reduction.

Your mortgage must have been serviced by one of the 14 participating mortgage lenders/servicers or their affiliates:

America’s Servicing Co.; Aurora Loan Services; BAC Home Loans Servicing; Bank of America; Beneficial; Chase; Citibank; CitiFinancial;CitiMortgage; Countrywide; EMC;EverBank/EverHome Mortgage Company; Financial Freedom; GMAC Mortgage; HFC; HSBC; IndyMacMortgage Services; MetLife Bank; National City Mortgage; PNC Mortgage; Sovereign Bank; SunTrust Mortgage; U.S. Bank; Wachovia; Washington Mutual; Wells Fargo; Wilshire Credit Corporation

Seriously  what do you have to lose?  Contact my friends at the Minnesota Home Ownership Center.  They are a legitimate organization that I highly recommend for help with housing issues including foreclosure and foreclosure prevention. 

Vacant homes in St. Paul

 The last time I wrote about vacant homes was in January of 2011.  There were 1459 registered vacant buildings on the books in January this is way down from the all time record in the fall of 2008 which was 2031.  There are vacant homes that are not on the list because the city does not require that all vacant homes be registered and there are a few cheaters out there too. . . you know who you are . . 

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two vacant houses in a row

Today we have 1421 registered vacant buildings. The list is on the city web site and I know they will move the page in a week or so and break my link so if you land on this article at some point in the future use Google and search on registered vacant buildings and city of St. Paul.*

Nation wide there are a large number of vacant homes I have read estimates that there may be as many as 19 million of them. [Forbes] 

Some of the homes that were vacant last year have been torn down, others have been rehabbed and some are still on the market.  There isn’t any way to track the homes that are vacant but not registered.  If you own an empty home it is important to let your insurance company know that it is vacant. 

If you live next to a vacant home keep an eye on it and alert the police if there is suspicious activity. 

*the city used to have one full time employee who did nothing but move pages on the city web site now they have two.  If you are not a fan of broken links on your site do not link to an item on the city of St. Paul web site.