Last rites in foreclosure fight? Minnesota Senate Dems block hearing on Homeowners' Bill of Rights

This is not the way Minnesota housing rights activists thought it would turn out when Democrats regained control of the the State Legislature: Hopes for passing a Homeowners’ Bill of Rights to protect Minnesotans from needlessly losing their homes to foreclosure all but died Friday.

A Homeowners’ Bill of Rights — similar to one that was adopted by California last year — would require automatic mediation between banks and homeowners facing foreclosure and prohibit the practice of “dual-tracking,” in which banks negotiate with homeowners while simultaneously moving them towards foreclosure, often without their knowledge. Activists have been hoping that the Legislature will adopt such protections to help end the foreclosure crisis but got a cold dose of political reality: Without banking industry approval, some Democrats in the Senate appear unwilling to support a Homeowners’ Bill of Rights.

In a polite but tense, closed-door meeting between activists and staffers for the Democratic chair of the Senate Commerce Committee, Sen. James Metzen of South St. Paul, supporters of the proposal were told that it will not be given a hearing this session. This news contradicted an understanding that representatives of the group Isaiah/Faith in Democracy thought they had reached with Metzen at a meeting last month. Metzen, a banker in private life, did not attend Friday’s scheduled meeting in his office, with staffers telling Isaiah that the DFLer had chosen to attend a different meeting.

The ministers and volunteers from Isaiah, a coalition of more than 100 congregations plus clergy members and people of faith, were openly disappointed at Metzen’s absence and at the news that the housing reforms they have been pushing for will not be given a hearing. As a small circle of clergy prayed outside Metzen’s office in a Capitol corridor, the discussion between Metzen’s staff and a dozen volunteers from Isaiah turned difficult.

Metzen’s legislative assistant, Isaac Russell, told the Isaiah delegation that since there is no agreement between housing activists and the mortgage banking industry on a proposed Homeowners’ Bill of Rights, there is nothing for the Senate Commerce Committee to discuss.

“We don’t want a war in the middle of our committee,” Russell said. “We feel it would be counter-productive to fight this war in the middle of the committee.”

Russell also pointedly objected to Isaiah’s efforts to publicize Metzen’s sudden opposition to a Homeowners’ Bill of Rights with rhetoric challenging the banking industry’s influence in the Legislature.

“We’re taking a lot of political heat,” Russell said, specifically complaining about Isaiah’s Facebook page (where a petition asking the Legislature to hear the housing proposal is posted). “It’s not like AIG is flying in on a Lear jet and I’m going to kiss their ring.” Russell then asked a reporter from The UpTake to turn off a cellphone video camera, saying that Metzen’s office had not agreed to having media in the meeting. The reporter replied that the UpTake had been invited by an Isaiah press release to attend the event, and that he had identified himself as a reporter, but turned off his camera.

The temperature of the discussion, however, was not lowered.

Isaiah says that banking industry lobbyists have worked to block the homeowners bill and prevent it from getting a hearing. Housing activists expected better from the DFL majority.

“We would like to have a hearing,” Isaiah volunteer Dan Quillin insisted, asking again why Metzen won’t let the bill be heard in his committee. “Every single family and house that is lost is devastating to the family, and their neighborhood,” said another. “Enough is enough.”

Metzen’s staff replied that there were other bills that need to be heard, that time is running out for new bills to be heard (the deadline is this Friday), and that there is no reason to have a hearing on the homeowners’ bill unless an agreement has been reached before hand. Unless there is “peace in the valley” among the various sides in the debate, Metzen’s aide said, the senator does not want to hear the proposal in his committee. In practical terms, that means the banks have veto power over the proposal: If they don’t Ok the bill, it won’t get a hearing before the Commerce Committee.

That prospect left Isaiah deeply disappointed. Banks have opposed similar measures in other states but learned to live with them when they have been instituted, Isaiah argues. And when they have, the number of foreclosed homes has fallen sharply.

Metzen wants “everyone to just get along and work together,” Rev. Johnathan Zielske, pastor of Hope Lutheran Church in St. Paul said after the meeting. “Yet power concedes nothing unless forced to, and for much too long the big banks have held all the power. We need to give homeowners some basic rights to deal with the banks when they do not play fair.”

“As people of faith, we believe our policies must protect the economic well-being of our families rather the concentrated wealth of a few,” said Rev. Joseph Baring, pastor of St. James AME Church in St. Paul, who presided over the prayer circle in the hall outside Metzen’s office. A homeowners’ bill of rights, Baring said, “will keep more families in their homes and work to level the playing field between lenders and homeowners.”

About 40 Isaiah supporters kept a prayer vigil at the Capitol all day Friday. This week, however, as the deadline for hearing new legislation looms, activists may need more than prayer to get a hearing on the proposed homeowners bill of rights.

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Nick Coleman

Nick Coleman writes at The State I'm In and you can reach him at nickcolemanmn [at] gmail [dot] com.