Minnesota residents might not hear much about the housing crisis anymore, but it is still on many minds as the largest rise in bank repossessions recently took place in the third quarter of 2015. According to analytics company RealtyTrac, more than 123,000 homes were repossessed by banks in a three-month period. This 66 percent increase means some states still face large problems even though new foreclosures are close to a normal rate.
As Minnesota residents may know, the recession saw many homeowners lose their properties to foreclosure. As time passes, the foreclosure is removed from an individual's credit report, allowing them to seek out a new home. Getting a mortgage following foreclosure may not be easy, but some loan programs focus on helping borrowers do that.
With an inventory of foreclosure homes of only 0.4 percent among homes with mortgages, Minnesota places among the states with the lowest foreclosure rates as of July 2015. This matches a nationwide real estate recovery that has seen a 27.9 percent decrease in foreclosure inventory over the previous year, as reported by CoreLogic, a group that monitors the housing market.
Investors and homeowners in Minnesota may be interested in learning more about which states have been affected the most by foreclosure activity. On average, foreclosures in the second quarter of 2015 took over 625 days to complete, from defaulting on the loan to the property being repossessed. This length of time to complete the foreclosure process was the longest recorded average since 2007. The process can be tedious, and an increasing number of homes are now being foreclosed.
During the month of July, nearly 135,000 foreclosure filings occurred across the nation. Minnesota residents may know that the foreclosure activity represents bank repossessions, scheduled auctions and default notices. The number reflects a 7 percent increase from June and a 14 percent increase from July 2014, according to a recent report.
The concept of a zombie foreclosure might sound like part of a science fiction movie, but such homes could wreak havoc on Minnesota neighborhoods. A zombie foreclosure is a home with which the foreclosure process has begun but is bogged down. As the homeowners leave their properties, the failure of creditors to move forward efficiently with the foreclosure process can leave these locations vacant. Properties may become rundown due to a lack of activity or maintenance. They could also attract squatters, drug dealers, gang members or other undesirable individuals, creating an unsafe environment for the rest of the neighborhood.
Minnesota homeowners may have heard that foreclosure rates reached a 19-month high in May 2015. The number of properties in foreclosure was 1 percent higher than it had been in April and 16 percent higher than a year ago. Recent figures released by RealityTrac reveal that foreclosure filings in May affected one out of every 1,041 homes in the United States. Foreclosure filings include bank repossessions, notices of default and scheduled auctions.
Cash-strapped homeowners in Minnesota may have deep concerns about the possibility of foreclosure. This is particularly true in situations where unemployment is a factor and making mortgage payments becomes increasingly difficult. In such instances, they may wonder about whether any options exist for saving their home in the face of financial challenges.
A new report suggests that homeowners in Minnesota and elsewhere are less likely to lose their homes to foreclosure than at any time since September 2010. Completed foreclosure rates have dropped over 65 percent from September 2010 to March 2015 and nearly 16 percent from March 2014 to March 2015. Additionally, the delinquency rate on mortgaged homes has reached its lowest level since May 2008. However, completed foreclosures increased 7 percent from February to March 2015.
Minnesota homeowners who are dealing with financial challenges severe enough to lead to a possibility of foreclosure may wonder about the legal implications. In some states, however, timing has proven to be helpful in keeping homes in spite of foreclosure proceedings. Delays have become a serious problem due to a large number of foreclosures in some areas. Additionally, changes to federal law have had an effect.