New council to address foreclosures, help people keep their homes
By: Staff 03/01/2007
The Foreclosure Prevention Funders Council is a collaborative, nonpartisan effort to address the surge in residential foreclosures throughout the Twin Cities. The board of the Family Housing Fund, a nonprofit organization whose mission is to provide safe, affordable, sustainable homes to families and children in the Twin Cities metropolitan area through ongoing partnerships with the public and private sector, established the council in January.
The council will review a sample of cases to reveal root causes of foreclosure (financial management, family status changes, use of a predatory lending product), meet with lenders to begin flagging properties that are heading toward foreclosure so prevention assistance can be offered, and seek solutions to the problems of boarded and vacant buildings while properties are in repossession. The council will also look at the results of the sampling and develop new finance products (gap financing, refinancing, rehabilitation products) designed to address causes of foreclosures and, therefore, consequences to communities. Members of the council include agency, non-profit, and government leaders that address affordable housing, policy, and community development.
While many families are already losing their homes, a new surge of foreclosures is projected to begin in March when the rates of many adjustable mortgages are scheduled to increase. Families facing foreclosure include not only those who may have overextended themselves, but also families whose foreclosures can be attributed, in part, to predatory real estate and lending practices and personal financial setbacks due to loss of jobs, unforeseen need for major repairs, and health problems. The large number of foreclosures has also led to concentrations of vacant, boarded homes—a phenomenon that seriously destabilizes entire neighborhoods and creates problems for cities in which these neighborhoods are located. Even if a foreclosure does not lead to a vacant, boarded home, it can have an impact on local municipal and county governments by increasing demand for emergency housing services. In Minneapolis, homeowners at risk of foreclosure can call 3-1-1 to connect to counseling agencies for help and advice.