Sen. John McCain has been taking heat for comments made by his economic policy adviser, former Sen. Phil Gramm, who insisted American’s perception of an economic recession was “mental” and the product of a “nation of whiners.” Minnesota small-business owners may chafe at those words as a recent survey conducted by U.S. Bank reveals their perceptions 74 percent of them believe the economy is in recession and 46 percent are reporting lower revenue than in 2007.
Minnesota foreclosures up in June, bank repossessions skyrocket
By Molly Priesmeyer, Minnesota Independent The bad news? Foreclosures nationwide increased by 53 percent last month from June 2007, according to a new report from RealtyTrac. In Minnesota, foreclosures increased by 75 percent over that same period. The good news for Minnesota? Despite 1,694 foreclosure flings last month, Minnesota foreclosures still only make up about 1 percent of all foreclosures. One in every 501 U.S. households received a foreclosure filing during the month of June; in Minnesota, that number was one in every 1,348 households.
While this might sound like Minnesota is bucking the trend–or turning that elusive corner and entering a neighborhood not decimated by the foreclosure crisis–a look back at RealtyTrac reports suggests quite the contrary.
Not every notice of default or foreclosure filing results in foreclosure, but the share of them that do end in foreclosure is growing. Bank repossessions (as opposed to a foreclosure sale or trustee sale) continue to rise in Minnesota. In February of 2007, for example, bank repossessions made up 140 of the 2,226 foreclosure filings, or about 6 percent. By February of this year, they accounted for 24 percent of filings (350 of 1,433). And by June of this year, bank repossessions accounted for 44 percent (742 of 1,694) of the total.
This means that a lower proportion of homeowners is managing to avoid final foreclosure proceedings by modifying their loan terms or selling their home outright. Instead, more and more foreclosure notices in Minnesota are resulting in lender repossessions, a sign that the foreclosure crisis is far from over and that fewer Minnesotans than ever are finding solutions to their foreclosure problems.
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When asked to describe the current economic conditions for small businesses in Minnesota, only 3 percent said conditions were “excellent” and 18 percent said “good,” while 39 percent said they were “fair” and 38 percent said “poor.”
Fuel prices were singled out by 85 percent of business owners as having a negative effect, with roughly two-thirds saying the effect has been “very negative.”
“Gasoline prices, food prices. The market is just terrible,” one Minnesota business owner responded.
Current interest rates and the availability of credit were seen as having a positive effect, which U.S. Bank vice-chairman Rick Hartnack says is “good news for Minnesota.”
“The media attention about tight credit in the housing market simply doesn’t translate to the business market,” said Hartnack.
More than 400 Minnesota businesses with less than $10 million in revenue were surveyed during the month of June. This is the first in what U.S. Bank hopes will be an annual survey.
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