Real Estate. Economics. Business
This is a bit of a surpise…imagine being the real estate team working on this project for 4 and a half years and then being told it’s on hold.
Woodbury has been one of the leading cities in Minnesota for growth in housing and retail. It’s also fairly affluent. One would think Target would want a nice new Super Target in that area, but based upon this article from the Minneapolis St. Paul Business Journal, the numbers are no longer adding up.
Effective June 15, 2009, Minnesota had a major change in it’s foreclosure law. Homeowners who are behind on payments can now petition to have the Sheriff’s sale delayed by 5 more months. That effectively eats in to nearly the entire redemption period.
DISCLAIMER: this is not to be considered legal advice. Please seek legal counsel if you have questions regarding your foreclosure or how you might go about pushing out the Sheriff’s sale.
The way I see this, homeowners can now delay the Sheriff’s sale and actually keep that off their credit report provided they can figure out a way how to get out from under their property. This new law, disguised to help homeowners perhaps avoid foreclosure, looks like it will benefit many local attorneys as they may be called upon to file the petition and stop the foreclosure. It’s likely to cost a homeowner $400-$750 to seek the advice of an attorney and to file the paperwork necessary to extend the foreclosure date.
However, this new law will also allow homeowners more time to sell their home in a short sale. I am hearing more and more information that banks are trying…trying is the qualifying word, to move toward a short sale model rather than take back a few million REO properties. I’ll have more on this as I hear it.
For more information about the new Minnesota foreclosure postponement law, the Minnesota Home Ownership Center has some excellent information. Here is their excellent Q&A. The Minnesota Home Ownership Center has provided a Sample Affidavit for the Postponement of Foreclosure. The center also has a list of Minnesota foreclosure counselors…click here for a statewide list by county.
Homeowners in Minnesota who are behind on their payments, may face a Sheriff’s sale 6 months after they miss their first payment. Usually a Notice of Default (NOD) is published at the county and is then advertised in a local legal newspaper. That occurs 5-6 weeks before the Sheriff’s sale. In order to take advantage of this new law, homeowners will need to file the affidavit for postponement of foreclosure with the county recorder at least 2 weeks prior to the Sheriff’s sale date.
The Star Tribune covered this new law in a story a few weeks ago.
In speaking with the Hennepin County Recording Deputies as well as Erin, who handles the foreclosures in the Sheriff’s department, they are recommending that when you file the Affidavit with the Country Recorder, make sure you get two certified copies and immediately bring one down to the Sheriff’s department and quickly get the other one to the foreclosing attorney who is working for the bank.  When you record the Affidavit, you’ll want to have the Notice of Default (NOD) with you. It costs $46 to record a document in Hennepin County. Certified copies cost $10 each. So this will cost you a little time and money, but for the opportunity to postpone the Sheriff’s sale for 5 months so that you can try to sell your home through a short sale and possibly keep a foreclosure off your record, that’s not a bad trade off.
It would seem this new law might slow down the Sheriff sales for a while.
 
This story was published 10 days ago, but I wanted to post it on the blog. The median sales price in the Twin Cities has continued to climb consistently each month since January this year. January’s median sales price was just $155,000 and now in June it’s up to $173,500.  That’s up 7.5% from the median sales price in May 2009 which was $165,000.
This is consistent with what I’m seeing in the metro. Sales transaction activity in the past year have been so dominated by properties under $150,000 that as that inventory goes away, median prices will continue to see nice bumps like the chart below. Remember, this is the median sales price. Given the shift away from upper bracket home sales, these numbers are much lower than normal.
Click here for the press release from the Minneapolis Area Association of Realtors.
The Minneapolis Area Association of Realtors published this week’s report and it continues to show what we’ve been seeing for the past several months. There are fewer sellers out there and many more homes are going pending this year compared to last year at this time. While that information is helpful on the macro level for the Twin Cities, if you’re selling in the western suburbs that scenario above is not totally accurate.
While many cities are seeing listing activity decrease, the sales activity is slowing faster than the reduction in inventory. As a result, the supply gap is not improving.
Click here for this week’s full report.
The New York times published a story yesterday about the proliferation of loan modification firms. Often times these firms with hide behind a law firm name but then do the work as a loan modification company. I’ve heard that they’ll generally collent between $1,500 and $3,500 to do the work. Some will collect it all in advance and some will collect 50% up front and 50% once the loan is modifiied.
As a consumer, you should know that you can do this work yourself directly with your mortgage company. Also, many of these firms do not get your loan modified for a variety of reasons. It could be that your income no longer qualifies or that your employment history isn’t what it used to be. It could be that the home is so far upside down that even desperate bankers, investors, and government officials won’t allow the loan to be modified.
Beware of anyone who asks for this kind of money upfront on a loan modification.
The Commerce Department reported yesterday that there was a 3.6% rise in construction of new homes and apartments in June. Single family home construction jumped 14%. While this is an encouraging sign it’s not enough to call the bottom and we have to be careful that any month can see a big jump in the percentage increase because we’re now working off of such a small base given the collapse in the new construction market for single family homes.
For more on this story see, the Associated Press story on Yahoo!, CNNMoney, and Calculated Risk.
RealtyTrac just released it’s latest report for the number of foreclosures in the U.S. The number of properties in foreclosure in the first half of 2009 vs. the first half of 2008 have increased by 15% nationwide. In Minnesota, the number have increased by 52%. Click here for the state by state breakdown on the foreclosure data including Minnesota’s stunning increase.
Loan modifications are slow in coming and the government and mortgage service providers have not been able to stay ahead of the market. The Associated Press, via Yahoo! News published this story this morning on the latest foreclosure data and loan modifications information.
  
The StarTribune published a story today about the Robbinsdale School District losing 4% of its students last year. The district has seen continuing losses in the number of students it serves.  According to the story, the district peaked in 1972 with more than 20,000 students. In 2009, they expect to have 11,800 students.
The 4% decline was 477 students which translates in to nearly $2.5 million in state aid for education. Many other first ring districts have had to deal with this over the years. It’s the ebb and flow of families and their children. District leaders will continue to have challenges making things work with less money.
The Minnesota Department of Transportation will begin drainage improvements along Highway 55 this weekend. The overall project will run from Fernbrook Lane in Plymouth out to County Road 116 in Medina.
This coming weekend, Highway 55 will be closed from County Road 101 in Plymouth out to County Road 116 in Medina. Traffic will be rerouted to County Road 10.  I will likely just try to use Hackamore (County Road 47).
Feel free to contact Bee Thao at 651-366-4319 with questions about construction. Mary McFarland Brooks is the contact with regard to road closures during the project. She can be reached at 651-234-7506. Both work for the Minnesota Department of Transportation (MnDOT).
According to this Reuters story, the Obama Administration is considering allowing defaulting homeowners to surrender their homes to the government and then just rent back from the tax payers. (BTW, I am a real estate investor, and it’s my understanding that this is ILLEGAL for me to do this. In other words, I would be an equity stripper, flipper, investor whatever you want to call me for trying to do this even though there is no equity in these homes). With people struggling to pay their mortgages, the concept of “Rent-to-Own” has increased dramatically. However, this new program from the government puts a new twist on it…”Own-to-Rent.”  We’re all renters now.
This plan is nothing more than trying to save the banks from imploding. If you don’t believe, me, read what Denninger noted this weekend with regard to the coming Option Arm problem. Read more on this issue from the Wall Street Journal.
It appears we are heading down a path where we will all work for the government, live in government housing, travel to work in government made autos, get cared for by beaureacrats in a government run hospital. I don’t think they have disclosed plans yet to overtake the operations and management of our food sources yet, but I know restrictions are coming with regard to what you can and cannot eat.
