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Electronic foreclosure help forms

Published (2/18/2010)
By Mike Cook
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An update is on the table to a 2008 law that assists people whose home is being foreclosed.

A party entitled to foreclose on a property must now provide notice to the mortgagor of the opportunity to see foreclosure prevention counseling. The notice must be provided to an authorized foreclosure prevention agency within one week after notice is sent to the mortgagor.

“This got counselors out right away to work with the people and let them know what rights they had, and how they could work out things with the lenders,” said Rep. Joe Mullery (DFL-Mpls).

More than 60 percent of individuals who work with a foreclosure prevention counselor are able to avert foreclosure, said Kristin Beckmann, government relations director at Twin Cities Habitat for Humanity.

Mullery is sponsoring HF2615 to specify the form and content of the notice requirement to the foreclosure prevention agency.

Approved Feb. 15 by the House Civil Justice Committee, it awaits action by the full House. A companion, SF2501, sponsored by Sen. Linda Scheid (DFL-Brooklyn Park), awaits action by the Senate Commerce and Consumer Protection Committee.

It would require that information be sent to the appropriate foreclosure prevention agency in a non-proprietary database or spreadsheet, when available. If possible, electronic transmittal of the database would occur by secure, encrypted e-mail.

The notice would also have to include contact information for an agent of the mortgagee who is authorized to negotiate a resolution with the mortgager, and contact information for the mortgagee’s loss mitigation manager.

“In the third quarter of 2009, 18,000 pre-foreclosure notifications were sent back and forth between lenders, servicers, attorneys and counselors,” Beckmann said. “Our hope on the counselor side, in both working particularly in Minneapolis but with the home ownership center network for the counselors across the state, is that we can get rid of the paper form and have all the information on the paper form move to the first transmittal of data, and have that first transmittal be electronic.”

She said 80 percent of correspondence is now electronic, but there is no standard form or security guarantee.

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