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Decline in underwater homeowners may not signal improvement


Regardless of the exact figures, the fact remains that many Minnesota residents in Carver, Washington and St. Paul are still in need of financial guidance that could help them keep their home.


This past February, the Federal Reserve Bank of Minneapolis released a new report that found that banking conditions in the North Star State improved during 2012 and that steady progress could be expected for 2013.

Since the health of major banks is often determined in part by the ability of borrowers to make their monthly payments on credit cards and mortgages, the report also gave observers insight into Minnesota's housing market, which like much of the country, is still struggling in the wake of the most recent recession.

Overall, the rate of underwater Minnesota homeowners – individuals who are past due on their monthly payments – fell by 2 percentage points during 2012, dropping to 16.4 percent by the year's end.

“I expect 2013 to see continued improvement in loan growth and profits, although at a slower pace than last year. Both measures will likely remain off long-run medians,” Ron Feldman, a senior vice president at the organization, said. “Problem loans should also decline, but given their already low levels, this decline will be measured.”

Still, while the report is encouraging, LoanSafe.org, a top online resource for borrowing information, suggested in a subsequent article that foreclosures themselves may have had a role in lowering the statistic.

This sentiment was summed up by Jim Hammerand of the Minneapolis / St. Paul Business Journal who said, “If a home was underwater last year and foreclosed on this year, that would mean this year's data would include one less underwater mortgage.”

Regardless of the exact figures, the fact remains that many Minnesota residents in Carver, Washington and St. Paul are still in need of financial guidance that could help them keep their home. At Atlas Law Firm, our Minneapolis and Anoka County bankruptcy attorneys can walk you through the bankruptcy process, discussing why it may be the most advantageous option in your situation.

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