Lynn Frantzen Minneapolis Real Estate

This week I had a client make a Highest and Best offer on a bank owned home. We were told their offer was accepted and even started to schedule the inspections. Then WAM the next day I receive an email saying the bank decided to reject their offer! I know I am venting but banks are just crazy sometimes to deal with. This is a really good lessen to remember that nothing is a done deal until both sides have signed and executed the deal. The good news is that there are plenty of homes to keep looking at and my clients are great people.

I was brushing up on some real estate law this week and found a very interesting subject. Redemption laws in Minnesota in regards to foreclosures are hard to follow sometimes. The shortest redemption period is for a home that is found vacant the lender can foreclose and than take possession of the home in as quick as 5 weeks. Most homes with a homeowner still living in the home have a 6 month redemption period. However then we come up with another set of laws giving farms a 1 year redemption. Also anyone who has paid 30% of their mortgage down will also have a 1 year redemption period. Sounds confussing even when you understand it.

The redemption period starts the day the Sherrif's Sale occurs. At this sale the first mortgage typically purchases the home for the mortgage amount or maybe at a discount. The redemption period is time for the homeowner to try and redeem the home by purchasing it back from the Sherrif or selling the home and redeeming what they can of their credit. Once in a while a home will be in the redemption period and the homeowner will have equity - they need to sell to receive this equity or the lender will benefit not the homeowner.

First provide a solid explanation of as to how, you have landed yourself in hardship. For example, how your financial condition is right now compared to when you first obtained the mortgage. Mention as to what you have been trying to do, to make ends meet and are still not in a position to make your monthly payments.

Next tell them about the condition(s) that has caused your financial hardship. Lenders tend to accept the following aspects as justifiable reasons for hardship, although there are many more, which they also accept: Being unemployed, Death of a family member/spouse, Job relocation, as well as unexpected medical bills.

Lastly you need to ask for what you are trying to accomplish. Do you feel you would like to try to stay in your home and just need a modification. Or is the situation too far gone to work it out and you would like to ask that they approve a short sale.

Check out my new tab Credit Advice to see the easiest ways to maintain and improve your credit score. This is always a good idea when starting to think about any large purchase. Mortgage rates and the Mortgage Insurance Premiums are based on your credit score and will affect your house payment and the amount you can quailfy for when purchasing.

 

A Sherrif's Sale is the procedure that starts the foreclosure process. Typically a first position mortgage holder will be the only bid at the Sherrif's Sale as this is how they secure their interest in the property. Sometimes they foresee a loss with a home whether they foreclose or not. One option is for the mortgage company to discount the payoff by underbidding their claim. This sets the stage for a perfect short sale situation. We avoid having to negotiate with the first mortgage company and use the redemption value as the payoff. If a second mortgage is on the property we do still have to negotiate with them to obtain a short sale approval. However it is also possible for the homeower to see equity left allowing them to recapture some of their loss.

I am sitting here at an Open House at my listing on 40 of the most beautiful acres you could ever find. I can actually hear the leaves, wind and an chicken or two. Not the sound of traffic or neighbors. This farm sits right on the Sherburne/Benton County line, about 7 miles north of Hwy 10. My husband was here this week and he was impressed with the setting and easy location to main roads. Property is all set up for a large hobby farm with barn, pasture and chicken coop. Way fun!

 

2352 Montana Ave E, Maplewood  -  We invite everyone to visit our open house at 2352 Montana Ave E on October 10 from 12:00 PM to 2:00 PM.

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