The Foreclosure Report

"Too Much Credit" In Minnesota

The Winona Daily News reports from Minnesota. "Last year, Winona County had 42 home foreclosures. The county is on track to have that many by spring this year. There have been 10 already this year with another 20 pending, putting the county on pace for a record increase, said County Recorder Bob Bambenek."

"The county is poised to see 'drastic changes,' Bambenek told the county Board of Commissioners in a real estate market update Tuesday night."

"The trend, largely a result of too much credit, isn’t unique to the area, or even the state, which saw a 46 percent increase in foreclosures between 2005 and 2006 and recorded 738 new ones in January, according to RealtyTrac."

"In Fillmore County, foreclosures jumped 33 percent over that same period. In Houston County, they doubled. 'It’s really scary,' said Houston County Recorder Beverly Bauer. 'A lot of people in the last few years have extended themselves very deeply.'"

"Bambenek said that of the foreclosures his office has handled this year, both completed and pending, several are associated with Internet lending companies. Some of those companies, which often deal in giving subprime loans to people with poor credit, have high interest rates and use overly complicated formulas to mask fees and other charges."

"Bauer also said she’s seen an increase in recent years of mortgages from outside lenders, which she said she’s 'leery about.' 'People have done online mortgages and all of a sudden had problems,' she said. 'They try to contact those people, huge corporations, and don’t get to talk to a real person. They come here and say, 'What can we do?' There isn’t much we can do besides giving them a copy of their foreclosure.'"

"Minnesota Attorney General Lori Swanson has suggested a series of bills to reform lending practices, some of which will be introduced in the Legislature in the coming weeks. Her agenda includes criminal penalties for those who consciously provide 'grossly unsuitable' loans, banning prepayment penalties, and requiring lenders to verify that borrowers can repay a loan."

posted by Ben Jones @ 10:41 AM