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Homes under water, mortgages due

BISMARCK - North Dakota banking officials are cautioning owners of flood-damaged homes about the consequences of giving up and walking away. Several Minot banks said Friday they aren't seeing customers who want to abandon their homes and their mo...

BISMARCK - North Dakota banking officials are cautioning owners of flood-damaged homes about the consequences of giving up and walking away.

Several Minot banks said Friday they aren't seeing customers who want to abandon their homes and their mortgages.

But most of the city's 11,000 flood evacuees haven't seen the extent of damage to their homes yet, and officials say they want to be proactive and help homeowners during an emotional time.

"(We're) just letting homeowners know that it's going to be a stressful time over the next multiple months as they're getting back into their homes, assessing the damage, seeing what's going on," said Rick Clayburgh, president and CEO of the North Dakota Bankers Association.

"Emotions can run high, and it can be a very depressing time. The important point is just not to make hasty decisions and to know that they can reach out to their local lender, ask for help, ask for assistance, find out what their options are."

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About one-fourth of Minot's population and 4,100 structures were affected by the Souris River flood this summer. Other cities in the western part of the state - including Bismarck-Mandan - have also battled floodwaters.

Abandoning a home and turning in the keys may seem like the easy option, but there are consequences, Clayburgh said.

A default/foreclosure can cause a credit score to drop 100 to 400 points, making it difficult to obtain other credit and nearly impossible to get another mortgage for up to seven years, he said. An abandonment, strategic default and foreclosure can also have serious tax consequences to the borrower, he said.

Clayburgh said banks can postpone payments and restructure loans to help customers with flooded homes.

First Western Bank & Trust in Minot hasn't had anyone turn in their keys, but bank officials have answered a lot of questions, said Juliene Mowan, a mortgage loan officer. The bank is working with customers to lower their payments or grant extensions.

It's too early for many customers to know if their homes are repairable, said United Community Bank President Terry Zeltinger. The bank has branches in Minot and Burlington, which also flooded.

"We have told all of our customers that we are going to work with them to the utmost of our ability to do so," he said.

Minot's Town & Country Credit Union is advising customers not to panic, and they're there to help, said Spencer Hoover, vice president of mortgage and consumer lending.

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"We do not want them to ruin their credit in the first six months (after the flood)," he said. "It takes a lifetime to build good credit, and 30 days to ruin it."

The credit union is contacting all members in the flood area and seeing how it can help, he said.

"The optimism of our members is very, very strong right now," Hoover said. "Most everybody has the intent to rebuild."

Teri Finneman is a multimedia reporter for Forum Communications Co.

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