Foreclosures: Obama plan in driver's seat

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The man who wrote a 2004 bill protecting Minnesotans from unscrupulous foreclosure counselors said the state bills are good, but they take a back seat to federal legislation.

"The ground has shifted to the federal level and the Obama mortgage assistance plan," said Professor Prentiss Cox of the University of Minnesota Law School.

Still, Cox said, the Obama administration continues to work on its mortgage plan with Congress and states need to wait to see what is left for them to do once a federal measure passes.

Minnesota's new foreclosure counselor regulation came after Swanson's staff noticed for for-profit counselors "just keep popping up," Minnesota Attorney General Lori Swanson spokesman Ben Wogsland said.

Swanson's office does some work with homeowners, but much of that is reserved for non-profit groups that work with the Home Ownership Center.

"Consumers can be misled by the for-profit entities," Nelson said.

Those in business and the non-profits use the same terms, and to a home buyer sound much the same, Nelson added.

Counselors working with the center look at each home buyer's situation and "match homeowners to the help that is available," Nelson said. At times, that includes financial help from state or private organizations.

Non-profit groups never charge for counseling, Nelson said.

Three counties report a greater than 700 percent increase in requests for the center's counselors from 2007 to 2008 - Washington in the eastern Twin Cities area and Stevens and Wilkin in west-central Minnesota. Just a handful of counties statewide reported fewer counselor requests last year.

Tags: news, minnesota, foreclosure