Minnesota’s soaring home foreclosure rate, a top issue a year ago, has eased a bit in the Twin Cities, but not so much in other parts of the state.
And as the foreclosure situation swells, especially in rural Minnesota, options are scarce.
Ed Nelson of the Minnesota Home Ownership Center said that those outside the Twin Cities are more likely to find fewer options to get out of foreclosure because, ironically, they often did everything right when picking their mortgages.
The housing crisis began with sub-prime mortgages that were issued without enough collateral. Other problems with what Nelson calls exotic mortgages include payments that ballooned beyond the reach of the home buyers.
Home buyers with exotic mortgages were the first hit by the foreclosure crisis, which affected 26,265 Minnesota families last year and another 5,157 in the first three months of 2009. Many, but by no means all, of those with exotic mortgages are Twin Cities residents.
Now, however, the international recession is taking its toll on many outside the state’s largest metropolitan area, even those who had safe, traditional mortgages. Those home buyers are in trouble because more and more are losing their jobs.