City offers help during home foreclosure crisis

BY DENNIS GEISINGER

“This crisis is not going to dissipate any time soon,” said Julie Gugin, executive director of the Minnesota Home Ownership Center at an 8th Ward Foreclosure Crisis info meeting held on the border of Field and Northrup neighborhoods on Feb. 22. “We’re looking at least [at] another two years before things really start to turn around,” Gugin said.

“The good news is Minneapolis remains a very strong housing market with a steadily growing population and more jobs with better wages than a lot of the country,” said Tom Streitz, who only the day before had taken over the office as the City’s new Housing Policy and Development director. “Unfortunately, much of the current foreclosure crisis has been caused by rushing to get people who weren’t ready into homes,” Streitz said.

According to the City, “A review of recent foreclosures shows that neighborhoods in North and South Minneapolis are especially hard hit.” And with nearly 150 foreclosed homes on record in Elizabeth Glidden’s 8th Ward, it’s no wonder Glidden made information about help available from the City to aid in the current mortgage crisis the focus of her most recent monthly neighborhood meeting.
Some of the City’s new programs include investigating suspicious real estate practices and working with state, county and federal officials to enforce both state and federal laws; providing new, easy access to the Minnesota Home Ownership Center and Twin Cities Habitat for Humanity foreclosure counseling and assistance programs using Minneapolis 3-1-1; providing new $10,000 zero-percent interest loans forgivable over five years to anyone buying a home that they will occupy in key neighborhoods (currently available in North Minneapolis neighborhoods, but could be used on the Southside if enough interest is generated); and grants for working to secure and maintain vacant properties—when a foreclosure cannot be prevented—until they are sold.
Another program aimed at the safety challenges presented by vacant homes encourages neighbors and block clubs to work together by “adopting” a vacant property on their block. Neighbors can reduce the property’s threat to the stability of their area by reporting trespassing and health or safety issues, checking on a vacant property occasionally to ensure doors and windows are closed, and maintaining the public space—sidewalks and alleys—around vacant properties.

The Minnesota Housing Finance Agency has also loaned the Family Housing Fund $10 million for the Greater Metropolitan Housing Corp. to purchase and rehabilitate vacant homes and resell them.

On Jan. 18, the City Council passed a resolution calling on the 25 largest subprime mortgage lenders and servicers in the country to voluntarily agree to a three-month suspension on foreclosures of owner-occupied properties in the city of Minneapolis. Lenders and servicers were asked to make every effort during the suspension period to help their customers avoid foreclosure and remain in their homes, including modifying loans by reducing the interest rate and/or the principal to achieve an affordable monthly payment.

Lenders holding rental properties were encouraged to keep properties occupied with tenants for as long as possible. The City also encouraged companies to continue to work with it and community-based organizations during the suspension period to reach homeowners who are not communicating with the servicer.