Top 10 Foreclosure States

In the US, new foreclosure filings fell from February to March, but only by 1%. According to the latest RealityTrac data, one out of every 856 housing units nationwide received a foreclosure notice last month. But as you might expect, some states did much worse than others. Can you guess which?

Here they are, listed by the highest foreclosure rate:

  • Nevada - 1 in every 306 housing units

  • Florida - 1 in 317

  • Illinois - 1 in 441

  • Ohio - 1 in 447

  • Maryland - 1 in 630

  • Georgia - 1 in 649

  • Arizona - 1 in 662

  • South Carolina - 1 in 673

  • Washington - 1 in 687

  • Indiana - 1 in 733

Times are still tough for real estate investors in Nevada and Florida, and they aren't much better in Illinois or Ohio. Comparing data this way can obviously be deceptive, as some States have areas with widely divergent foreclosure rates (here's looking at you, California). But the data can highlight general trends to be aware of.

What about us? In Minnesota the rate stands at 1 in every 1,228 housing units for the month of March, 2013. Experts see signs of an improving market here -- marked primarily by stabilizing home prices -- despite the frosty Spring we're having. In terms of foreclosure filings, we're seeing up and down months but the overall trend in Minnesota is positive.

The reality though is that many of us, or our friends and neighbors, are grappling with late payments, underwater assets, and the threat of foreclosure. There is relief out there, whether through a foreclosure avoidance program or a Chapter 13 restructuring of mortgage debt, including a possible lien strip of junior mortgage debts. It's a good time to speak with a professional about options. The trending downticks in foreclosures and uptick in prices means now is a great time to sort out those real estate issues.

About the author: Dan Cooke

Image credit: Jeffrey Turner

What Does the Mortgage Aid Settlement Mean?

People who were foreclosed upon by one of five mortgage banks -- Bank of America (which includes any Countrywide mortgages), Wells Fargo, Chase, Citigroup and Ally Financial --  between 2008 and 2011 could be entitled to a share of the recent $25 billion settlement.

Sounds great, right? But there are issues. The settlement will not apply to any mortgages guaranteed by Fannie Mae or Freddie Mac. It also appears that it is going to take time to sort out exactly who is entitled to relief and how much will be paid to each homeowner. Initial analysts project that it will take six months to a year before any funds are distributed and it is likely that individual payments will not exceed $2,000.

Another component to the settlement allows some current homeowners who are underwater (i.e., owe more on their mortgages than their homes are worth) to refinance their mortgages and obtain a lower interest rate.

If you think you might be entitled to relief you should stay on top of this. The StarTribune has provided a list of resources to get more information.

About the author: Dan Cooke


Mortgage Stripping in Minnesota

Most U.S. bankruptcy courts already recognize mortgage lien stripping as an option for distressed homeowners. Minnesota has only recently allowed this as a remedy. If you have a second or third mortgage on your home that is "underwater" - meaning that your home is currently worth less than what you owe on your first mortgage - bankruptcy relief may allow you to strip any underwater mortgages away entirely, helping many struggling homeowners stay in their homes and avoid foreclosure.

A recent article in "Minnesota Lawyer" explains the current legal developments. The key Minnesota case on the issue is on appeal. We can expect a decision by the appellate court early this year and if the court follows the national trend, more Minnesota homeowners will be able to consider mortgage stripping as an option.

About the author: Dan Cooke