City’s 311 info line has tips for homeowners falling behind on mortgage payments

With the number of foreclosures in Minneapolis running 79 percent higher than last year, the city’s main hotline is stepping in with assistance for people who fear they may fall behind on mortgage payments.

Residents can now call 311 for a referral to agencies who will give them financial counseling, explain the foreclosure process and help them negotiate with their mortgage companies.

“The key for preventing a home from going into foreclosure is early intervention,” said Marc Dronen, an analyst for Minneapolis 311. “If people think they will miss a payment or are missing one payment, it is not too early to call.”

Since mid-November, 311 has received 68 phone calls from residents regarding foreclosure. The service received one call from the CARAG neighborhood, one from Kenny, one from Kingfield and one from Lyndale.

More than 1,300 foreclosures were listed in 2006 as of mid-November, a substantial increase from last year’s total of 871. The North Side of Minneapolis reported more than 600 foreclosures through September.

“More families and children are losing homes,” said Elizabeth Ryan, director of the city’s Housing Policy and Development department.

She said the city is stepping up efforts against the trend. The city increased foreclosure prevention grants by $147,000 in the middle of 2006 and proposed $180,000 to fund prevention programs in 2007. The city’s interest in preventing foreclosure stems from concerns about neighborhood stability and the impact of vacant or boarded properties.

Cheryl Peterson, a senior foreclosure prevention counselor with Twin Cities Habitat for Humanity, said the agency emphasizes counseling but also offers financial assistance as a last resort.

“We’re seeing more extremely high mortgage payments,” Peterson said. Peterson said she has seen people run into trouble by refinancing as a way to get current with their payments, without the ability to pay future monthly bills. Meanwhile, they are eating away at the equity of their homes. She also has seen an increase in exotic loans where mortgage payments escalate substantially.

Lauren Crandall, marketing and communications director for the Homeownership Preservation Foundation, said homeowners have more options than they may realize. Depending on circumstances, lenders could allow the homeowner to refinance the loan, craft new repayment plans, restructure the loan with a different interest rate, postpone payments for a fixed period of time, or sell the property for less than the loan amount and consider the loan paid in full.

Minneapolis Spokesman Casper Hill said the cities of Chicago and Baltimore also offer 311 referral services to people who fall behind on payments.

311 lines are staffed Monday through Friday from 7 a.m-11 p.m.