Goal Statement

To prevent home foreclosures and mitigate the effects of foreclosures in order to stabilize neighborhoods.

Policy/Program Options

• Purchase-Rehab Programs
• Rebuilding Together
• Land Trusts
• Community Reinvestment
• Home-Ownership Incentive

Issue Briefs (local, state, national, global)

• Home Foreclosures - USA
• Home Foreclosures - Minnesota
• Home Foreclosures - Saint Paul, MN
• Home Foreclosures - Frogtown-Rondo Neighborhoods, Saint Paul, MN 

Glossary of Terms

• Forclosure: a legal process in which mortgaged property is sold to pay the loan of a defaulting borrower. Although specific policies vary by state, the foreclosure process generally occurs as follows:

• First month missed payment – the lender will contact the borrower by letter or phone. 
• Second month missed payment – the lender is likely to begin calling the borrower to discuss why he or she has not made payments. 
• Third month missed payment – after the third payment is missed, the borrower will receive a letter from the lender stating the amount that the borrower is delinquent, and that he or she has 30 days to bring his or her mortgage current. This is called a "Demand Letter" or "Notice to Accelerate". If the borrower does not pay the specified amount or make some type of arrangements by the given date, the lender may begin foreclosure proceedings. They are unlikely to accept less than the total due without arrangements being made prior to this notice.
• Fourth month missed payment – the borrower is now nearing the end of time allowed in the Demand or Notice to Accelerate Letter. When the 30 days ends, if he or she has not paid the full amount or worked out arrangements, the borrower will be referred to the lender's attorneys. The borrower will incur all attorney fees as part of his or her delinquency. 
• Sheriff's or Public Trustee's Sale – the attorney will schedule a Sale. This is the actual day of foreclosure. The borrower may be notified of the date by mail, a notice is taped to your door, and the sale may be advertised in a local paper. The time between the Demand or Notice to Accelerate Letter and the actual Sale varies by state. In some states it can be as quick as 2-3 months. This is not the move-out date, but the end is near. The borrower has until the date of sale to make arrangements with the lender, or pay the total amount owed, including attorney fees.
• Redemption Period – after the sale date, the borrower may enter a redemption period. He or she will be notified of the time frame on the same notice that his or her state uses for Sheriff's or Public Trustee's Sale^[1].

• ARM: Adjustable Rate Mortgage; a mortgage loan subject to changes in interest rates; when rates change, ARM monthly payments increase or decrease at intervals determined by the lender; the change in monthly payment amount, however, is usually subject to a cap^[2].
• Default: the inability to make timely monthly mortgage payments or otherwise comply with mortgage terms. A loan is considered in default when payment has not been paid after 60 to 90 days. Once in default the lender can exercise legal rights defined in the contract to begin foreclosure proceedings^[3].
• Delinquency: failure of a borrower to make timely mortgage payments under a loan agreement. Generally after fifteen days a late fee may be assessed^[4].
• Equity: an owner's financial interest in a property; calculated by subtracting the amount still owed on the mortgage loan(s)from the fair market value of the property^[5].
• Foreclosure: a legal process in which mortgaged property is sold to pay the loan of the defaulting borrower. Foreclosure laws are based on the statutes of each state^[6].
• Index: the measure of interest rate changes that the lender uses to decide how much the interest rate of an ARM will change over time. No one can be sure when an index rate will go up or down^[7].
• Redemption: Redemption is a period after your home has already been sold at a foreclosure sale when you can still reclaim your home. You will need to pay the outstanding mortgage balance and all costs incurred during the foreclosure process^[8].
• Sub-Prime Loan: An industry term to used to describe loans with less stringent lending and underwriting terms and conditions. Due to the higher risk, sub-prime loans charge higher interest rates and fees^[9].

Bibliography