In response to Governor Tim Pawlenty’s threats to veto the Minnesota Subprime Foreclosure Deferment Act, families facing foreclosure brought the crisis to the governor’s mansion on Summit Ave in Saint Paul.
On Saturday, members of the housing-focused community organization ACORN and other groups constructed “Subprime City – the fastest-growing city in the nation” – made of tents, cardboard boxes, and sleeping bags. Families facing foreclosure held signs saying, “Governor Pawlenty, I’m losing my home. Can I stay here?’
At a press conference on Monday, Pawlenty unveiled new foreclosure prevention initiatives that called only for voluntary participation from lenders and servicers. ACORN member Al Ynigues compared the plan to President Bush’s notorious “Hope Now” plan – which received great national attention and delivered little substantive results for most homeowners.
Ynigues, whose adjustable rate mortgage has caused him to fall behind on his payments on his Apple Valley home, wondered what the governor’s new plan would do for him. “Governor Pawlenty’s new plans may sound like the arrival of new help, but at the end of the day, will they help me keep my home? We need our governor to stop making ‘housing policy by press conference’ and start doing the real work of forming real solutions with legislators, like the Deferment Act.”
Ynigues, co-chair of ACORN’s Financial Justice Committee, has been urging for the passage of the Foreclosure Deferment Act, which would give him a year to make reasonable monthly payments while arranging a workout with his lender.
The legislation is awaiting a vote on the floor of both the Minnesota House and Senate.
The Minnesota Subprime Foreclosure Deferment Act aims to give breathing room to a targeted group of families who are trapped in predatory loans originated before last year’s predatory lending law. To qualify, families would need to make reasonable monthly payments during their one-year foreclosure deferment while arranging a long-term workout with their lender. The bill would stop an estimated 12,000 avoidable foreclosures in the state.
Other states and cities have been responding with policies similar to the Deferment Act as the foreclosure crisis continues to destabilize neighborhoods and increase local government spending. On March 27, the City of Philadelphia issued a six-month moratorium on sheriff sales. A New York state bill for a one-year foreclosure moratorium is gaining traction this session, and similar legislation has been introduced in Florida, Connecticut, New Jersey, and Colorado.
For help, ACORN urged homeowners facing foreclosure to contact its office, (651) 642-9639.