Patti Mazzara-Minnesota mortgage provider and mortgage broker-Venture Development-shares some idea and resources for those facing foreclosure in Minnesota

We frequently get calls from people in foreclosure asking us what help we can provide to someone in foreclosure.  Unfortunately, we can offer a lot of help.  Unless you have substantial equity in the home-defined as over 35%, and a good reason why the foreclosure occurred in the first place, plus the abililty to show repayment is possible, you will be out of luck.  Even if we can help, it may be a form of HARD MONEY-which we discussed in a previous post. 

FHA has a product called FHA Secure, which in theory is supposed to help.  In fact, it can help IF you can meet the criteria.  Here is the criteria:

Offered by the Federal Housing Administration (FHA) in Mortgagee Letter 2007-11, this program allows clients to help eligible borrowers refinance specific types of ARM loans into a new FHA 30-year fixed-rate loan.

Eligible for refinance with FHASecure: All conventional non-FHA ARM loans including ARM loans with an Interest-Only payment feature are eligible.

Not eligible for refinance with FHASecure: Fixed-rate products (including fixed-rate loans with an Interest-Only payment feature), Option ARMs, VA loans and other FHA loans are not eligible.

Eligible borrowers must:

• Be delinquent on a non-FHA conventional ARM after an interest rate reset.
• Have a six-month history of on-time mortgage payments before their non-FHA ARM loan reset and they became delinquent on their mortgage payments because of the reset.
• Provide a letter of explanation regarding the late payments.
• Provide evidence that the loan being repaid is a non-FHA ARM with a reset (copy of Note, Mortgage Rider, etc.)
• Qualify for the terms of a new FHA 30-year fixed-rate loan.
• Qualify for the standard 203(B) guidelines including, but not limited to, upfront and monthly mortgage insurance premiums.

Maximum loan amount, LTV and CLTV

• FHA Rate and Term Refinance guidelines apply for calculating the maximum mortgage amount; however, the new loan may also include missed mortgage payments and late charges from the previous loan.
• Standard maximum LTV ratios apply, based on property state and appraised value.
• There are no CLTV limits.
• Standard FHA statutory limits apply for LTV.

If you live in MN-Minnesota, we have procedure that needs to be followed. Click on : Foreclosure Process in MN  and check out Foreclosure Prevention in MN -Resources