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Here's why fewer Minnesotans are losing their homes to foreclosure

Good news for homeowners, not for potential buyers looking for a cut-price deal.
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The number of Minnesotans who have fallen into foreclosure on their homes reached a 10-year low in 2016.

The Minnesota Homeownership Center (MHC) started taking records of foreclosures across the state based on sheriff sale data (a public auction on repossessed properties) from every county in the state.

And the good news is that there were only 5,306 foreclosures in Minnesota last year, a 26 percent decrease on the year before.

It's a far cry from the doldrums seen in 2008 and 2010, during the height of the housing crisis, when more than 26,000 foreclosures were reported in Minnesota each year.

The MHC puts the fact that fewer Minnesotans are defaulting on their mortgages down to two reasons.

Firstly, it says banks and lenders have been improving the way they manage struggling homeowners, and this coupled with foreclosure prevention programs run by organizations such as the MHC have helped more people stay afloat.

And secondly, the past few years have seen a significant rise in house prices, which doesn't necessarily make it easier for people to pay their mortgage, but it helps them to sell a house they can't afford without owing any extra money, rather than foreclosing.

But at the same time, there are still thousands of Minnesotans at risk of foreclosure going forward, with the MHC noting 17,456 households received a pre-foreclosure notice in 2016.

As SFGate notes, pre-foreclosure is the period after someone has defaulted on their mortgage, when the lender is going through the process of contacting the homeowner to get their payments back on track.

You can view a copy of the full report here, which breaks down the foreclosure rates by county.

Where are the most foreclosures?

If you're talking volume, then it's no surprise that the Twin Cities metro counties of Hennepin, Ramsey and Anoka had the highest number of foreclosures last year. Hennepin County had the most with 1,054.

But the foreclosure rate is lower in these counties compared to more rural counties because more people live in the cities.

The highest foreclosure rates can be found in east-central Minnesota, with the highest rates in Isanti (0.60 percent of homes foreclosed), Pine (0.55 percent) and Mille Lacs (0.53 percent) counties.

But, all three of these counties saw their foreclosure rates fall in 2016 compared to 2015.

It's worth noting that sheriff's sales do not provide the full picture of foreclosure in Minnesota as not every foreclosed home goes through this process.

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