In 2007 Minnesota had over 13,000 filings for foreclosure. This was a 100% increase from 2006 and a whopping 500% increase from 2005. These numbers have gone down since then but the cold hard truth is that there are still nearly 10,000 filings for foreclosure with more being added each day. So why is this happening? Why are Minnesota families being forced to foreclose their home? And, is there any other option?
What Happened? Reasons for Foreclosure in Minnesota
Some of the most common reasons for foreclosure are as follows:
Job loss/ unexpected unemployment – in August 2009, the unemployment rate in Minnesota was at 8.0% which is the same as what it was in April 2009. What this means is that, although the global economic recession appears to be slowing down, jobs are actually not picking up and more and more Minnesotans are finding that their temporary unemployment status is turning permanent.
Sudden illness or medical emergency – another common reason that more people are losing their homes to foreclosure is because they are struggling to overcome an illness or medical emergency and simply cannot pay for the bills. In 2007 there were over 4 million cases of injuries at work that cause problems in the financial sector. If you or the main income earner all of a sudden cannot work, then you could easily fall behind on your payments and end up in trouble with your mortgage.
Divorce / Loss of second income – 1 in every 2 marriages end in divorce and many more people split up every day causing not only a problem in their emotional life but also in their financial life. The reason is because, with a separation also comes a split in income. Furthermore, divorce proceedings can be extremely expensive and thus many people are struggling with even more debt once they have ended their marriage.
Unexpected Home Maintenance – another problem that Minnesota families face is that their home is suddenly damaged. Although most families will have insurance that will cover accidents, there are certain problems that will need your out-of-pocket expenses. The fridge could break; the heating could crack down or the roof could leak. All of a sudden you are spending your monthly paycheck on home repairs instead of on the mortgage.
The Short Sale in Minnesota Option
One of the best options to avoid foreclosure is to opt for a Minnesota short sale. A short sale is a real estate transaction that occurs when the banks agree to take an offer on a house that is less than what you currently owe. They are willing to ignore the additional money you owe and you are able to sell your house without worrying about that dreaded ‘foreclosure’ status on your credit report. If you are having trouble making your mortgage payments, regardless of what the reasons are, you do not have to commit to the foreclosure status. A MN short sale is an option that just might work for you.
