| Minnesota housing market nightmares (KSTP) |
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A retired couple on a fixed income shouldn't get refinanced with a high adjustable rate mortgage, but that is what happened, and is happening with thousands of homeowners in Minnesota not educated on mortgage loans, and many say, getting taken advantage of because of it. Ed Russell is a veteran. "I was in the navy for six years," said Russell. He used the G.I. Bill to purchase his North Minneapolis home in 1962. A loan he repaid. "And I got a letter from the government saying what a great guy I was for paying it off. A lot of people were deadbeats that didn't," said Russell But now Ed may lose his home. "People say how do you eat?" said Russell. Ed and his wife only receive $2,600 per month. Almost $1,500 of it goes to paying an adjustable rate mortgage he refinanced three times, and now a man that once owned his home owes nearly $250,000. "We're seeing a record number of foreclosures," said Paul Dillon. Paul Dillon with ACORN, a national organization, has watched as thousands of Minnesotans like Russell faced foreclosures this year. "We've seen an incredible movement of predatory lenders move into this neighborhood pushing people to refinance and basically issue out a lot of loans that are unaffordable," said Dillon. Habitat for Humanity agrees that there is a record number of people facing foreclosure, many with mortgages that were never affordable. "We're basically living on social security," said Russell. Yet a mortgage company called Northwoods, with Countrywide as the lender, put Ed into an adjustable rate mortgage that could go as high as 11 percent. "My daughter's working and she gives me money, but it puts her behind in her bills," said Russell. There's no telling how long this 70-year-old heart attack survivor will afford to live in his home. Industry experts say that people on a fixed income should never sign on to an adjustable rate mortgage, and be sure to look at how high that interest rate can go. John Mason: Twin Cities Habitat for Humanity says that if you are facing foreclosure, here's some things that you can do:
Reporter: Allison Triarsi Click here to view video of the newscast.
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