2008 Foreclosure Counseling Program Report

A new report from a Minnesota non-profit revealed demographic and financial information about people facing foreclosure.

The report was released Wednesday by the Minnesota Home Ownership Center, which provides free counseling from mortgage advisors.

The center compiled information from the 11,809 homeowners who sought counseling in 2008.

To start with, the total number of people who sought counseling was an increase of 145 percent over 2007.

Half people who sought counseling faced either a reduction in or total loss of income since taking out their mortgage.

The majority of people did not hold the subprime mortgages which started the foreclosure crisis. Of the homeowners who reached out to the Minnesota Home Ownership Center, 60 percent had prime mortgages, while 37 percent had subprime mortgages.

The report also showed more than two-thirds of homeowners seeking help paid more than 30 percent of their monthly income to their mortgage. The Minnesota Home Ownership Center said 30 percent is a recognized standard of an unaffordable mortgage. Nine percent of home owners reported dedicating more than 75 percent of their income to their mortgage payment.

The center said its study showed counseling does work. It said its counseling prevented nearly 5,000 foreclosures in Minnesota, which it said saved home owners, lenders and local governments money.

Homeowners interested in free counseling can call the Minnesota Home Ownership Center at 1-866-462-6466 or they can submit questions online at http://www.hocmn.org