Urban League, ACORN launch anti-foreclosure program in Minneapolis

Minnesota ACORN and the Minneapolis Urban League have joined forces to address the Twin Cities’ growing foreclosure problem.

The two organizations, both well-known for working on local housing issues, opened the Sustainable Homeownership and Anti-Foreclosure Response Center (SHARC). During a January 5 press conference held at the Urban League’s North Minneapolis office, Minneapolis Urban League Housing Stability Program Director David Oguamanam said, ‘It make sense that we team up and put our resources together to tackle this issue.’

“SHARC is a resource and response center to the foreclosure crisis in North Minneapolis,” added Minnesota ACORN Regional Director Alexa Milton.

Minneapolis’s North Side has the highest concentration of foreclosures, according to Milton: 700 houses in the Jordan and Hawthorne neighborhoods were foreclosed in 2006; there were1,500 more foreclosures in 2007, she stated.

“Each and every one of those [families that occupied the homes] represents a family displaced, children uprooted and disruption to the community,” she emphasized. “We must keep those families in those homes now.”

“Sixty percent of the homes in Hennepin County that were going into foreclosures were homesteaded [owner-occupied homes], and 40 percent were not,” Oguamanam said, adding that these numbers are reversed in Minneapolis: “40 percent were homesteaded and 60 percent were not.”

When property owners fall behind in their payments, and their properties eventually go into foreclosure, renters also are affected, said Oguamanam. “You are talking about duplexes, four-plexes and six-plexes — multiply that by the number of families and the number of individuals being affected. That puts further stress on affordable housing in our community.”

In its October 2007 housing report, ACORN examined the cost of likely foreclosures due to high-cost loans. “We are estimating that 3,442 of the high-cost loans made in 2006 in the Minneapolis-St. Paul area will end up in foreclosure[s] [that] will [amount to] as much as or more than $450 million,” said Milton.

Homeowners of all races in the Twin Cities metropolitan area have a very high incidence — one in every three — of receiving a high-cost mortgage refinance loan. However, persons of color receive such loans at a higher rate than Whites.

A September 2007 ACORN report also concluded that nationally persons of color are more likely to receive high-cost mortgages than Whites: Black homebuyers are 2.7 times more likely, and Latino homebuyers are 2.3 times more likely. Furthermore, Black homeowners were almost twice as likely to be issued a high-cost refinance loan as Whites, and Latinos were 1.4 times more likely than Whites.

The report added that the Twin Cities is 11th among U.S. metropolitan areas with the largest disparity in high-cost home purchase loans, where Black homebuyers are at least three and a half times more likely than Whites to receive high-cost loans. Minneapolis-St. Paul also is among 13 metropolitan areas where upper-income Blacks were at least four times more likely to receive a high-cost loan than upper-income Whites, and it is ranked 37th among the top 40 U.S. cities with the greatest incidence of high-cost refinance loans to Latinos.

“The goal of SHARC is to get people out of these bad loans and into 30-year fixed [rate loans] whenever possible,” said Urban League community organizer Sheryl Morgan Spencer. “Our community has been unjustly targeted. We need to fix this mess.”

Millions of properties nationwide are going into foreclosure, noted U.S. Rep. Keith Ellison, who made an unexpected appearance at the press conference. “Most [victims of foreclosure] are not first-time homebuyers. Many are people who are sucked into refinancing. Many of them are people of color who were eligible for prime loans but were shifted into sub-prime loans,” said Ellison.

Congress is working on legislation against predatory lending (H.R. 3915: Mortgage Reform and Anti-Predatory Lending Act of 2007), the congressman said. Ellison also has authored other pieces of legislation addressing the home mortgage and financial crises, including the Universal Default Prohibition Act of 2007 (H.R. 2146), Fairness for Homeowners Act of 2007 (H.R. 3081), and H.R. 4735 (Tenant Protection in Foreclosure Act of 2007).

Ellison said that in spite of the focus on this year’s presidential elections, he believes both houses of Congress will pass these bills. “We got to do something about people in trouble now,” he said.

Morgan Spencer rhetorically asked, however, about those persons who already have been affected by foreclosure. “There are no laws right now that are helping people who already lost their homes,” she said.

Ellison agreed: “Even if we do it tomorrow, we are too slow for a lot of people. It is a widespread and serious issue, and it hurts people even if they are not in foreclosure. If you live next to two abandoned foreclosed properties, your property now is going down [in value].”

The Minneapolis Urban League also is working with other community organizations in addressing the foreclosure problem, Oguamanam said. He advises present and potential homeowners to seek all the information needed while applying for a loan. “We don’t always take the time to fully understand what it is that we are signing on the dotted line,” he noted.

SHARC also offers services for borrowers to have their loans analyzed, Oguamanam pointed out. But don’t procrastinate: “It is never too early,” he said.

For more information on the SHARC program, call 612-827-9299.

Charles Hallman welcomes reader responses to challman@spokesman-recorder, or read his blog, www.wwwchallman.blogspot.com.