Foreclosure Predictions For Minnesota Are Gloomy

July 16th, 2008 · No Comments

Foreclosure predictions for Minnesota are gloomy. Before 2008 draws to an end the number of foreclosures in Minnesota could cross the number of 66,000. This was the result of a study from the data taken from 87 counties of the state – the first survey of its kind. The tendency highlights the fact that out of every 31 houses one will be in foreclosure in the forthcoming years. It means a lot of families will be affected said Warren Hanson, of Greater Minnesota Housing Fund. The latter was on of the four agencies that initiated this study.

Hanson explained that a string of happenings has led to this slump in the housing market. First on the list of causes is the flood of fraudulent predatory lending that started to vitiate the market. The second rung of offenders were those who had used their property like ATM cards, and constantly withdrawn funds from its equity. The third cause is now beginning to tell – the increasing fuel and food prices. Household budgets are being drained to its limits for the sake of essentials, making it impossible for people to carry on with the mortgage.

In the county of Saint Louis it is expected that by the end of the year foreclosures will touch 431 units. It will mark a 20% spike over 2007 when the number recorded was 359. The county noted a total number of 897 foreclosure postings from 2005 to 2007. In the state foreclosure race St. Louis ranks tenth.

In the seven county metro areas are the highest foreclosure offenders. In 2007, 67% of all the foreclosures came from this area. Foreclosures in the Minneapolis and Saint Paul increased steadily from 3,759 (2005) to 7,039 (2006) – a jump of 87%. In 2007 it was a high jump to 12,974. The forecast for 2008 is 19,936 foreclosure listings. The estimate is on the conservative side, commented Hanson.

In the counties of Scott and Wright the foreclosure ratio is 1:100. In sheer numbers Hennepin County leads with foreclosures reaching 10,284 from 2005 to 2007. Another 8,585 are expected to be added in 2008.

The first time purchasers in the metro areas bought most of the houses that are in foreclosure. They had over reached themselves. The area was also a favourite with predatory lenders. The FBI ranks Minnesota fourth in the dubious race of high number of mortgage frauds. Perhaps it was ballooning house prices that attracted fraud.