The foreclosure crisis seems to have been pushed to the back of the national discussion of important issues, says U.S. Representative Keith Ellison. He thinks that needs to change.
“It is a part of a larger economic problem,” said Ellison at an October 5 town hall meeting on the foreclosure crisis at the Center for Changing Lives in South Minneapolis. He told an overflow crowd that he is lobbying for a foreclosure moratorium because thousands of Americans are struggling with trying to work with banks and mortgage companies to modify their current home mortgages.
“We are all in a jam here… This is not just an urban problem,” said the Fifth District congressman. “There [also] are foreclosures in the Sixth District, which includes Bloomington. This foreclosure crisis is part of a larger assault on middle-class and working-class people.”
“To me, the [Minneapolis] North Side is most hit with [foreclosures] compared to any other city in Minnesota,” said Tyshella Cotton of the Northside Community Reinvestment Coalition, one of several persons composing a panel that discussed housing needs.
Minnesota State Representative Jeff Hayden said that the state legislature is “working as hard as they can” to help alleviate the burden that many state homeowners are facing in trying to avoid foreclosure. He added that several bills that were passed during the last legislative session in this regard were vetoed by Governor Tim Pawlenty.
Other panelists told the audience that indeed there is help available for homeowners, but only after their homes are about to be or are in foreclosure status. “Minnesota has been a leader in foreclosure prevention,” noted Twin Cities Habitat for Humanity’s Cheryl Peterson. Ed Nelson of Minnesota Home Ownership Center said a Minnesota law allows a foreclosure to be postponed for up to five months.
David Weise, a Wells Fargo community development officer, defended his employer. He claimed that Wells Fargo has completed over 600,000 loan modifications.
“We want to work with homeowners and keep them in their homes,” Weise said. “We don’t make any money taking away their homes.”
Weise stated that an estimated 95 percent of local Wells Fargo customers are current with their mortgage loans and reported that the bank has hired 4,600 more people to work with homeowners. “We want to be prepared when homeowners call,” he said.
Orion Wisness, however, said that he has tried to work with Wells Fargo after he lost his job five months ago and applied for a federal foreclosure-prevention program. Despite assurances from bank officials, he said nothing has happened as yet, adding, “I don’t like to be lied to.”
Other residents also complained about working with banks and mortgage companies, and especially about the $75 billion federal Home Affordability Modification Program, which was introduced in March. Under the program, banks are required to cut interest rates for qualified borrowers until their payments reach a threshold of 31 percent of their gross income.
Reportedly, only 12 percent of those who qualify for relief have been approved for loan modifications thus far. “People need to be patient, because [the federal program] is new,” said Josh Fuhrman of the Homeownership Preservation Foundation. “It is not a quick-fix plan.”
Rolley Watkins, a single father of three daughters who lives in North Minneapolis, shared his story with the audience. “I know what I can afford and what I am capable of doing,” he explained. “I know if I am going to sign for a mortgage, I better make sure that I can afford that mortgage.
“That’s what I did with this loan, but I didn’t anticipate my now ex-wife [would lose her job]. Then I had shoulder surgery, which took me out for seven months.”
Watkins said he first called his mortgage company back in February and was told that he wasn’t in any trouble because he was current with his payments. But a month later, he said he wasn’t able to pay.
“Things started to get worse, because I was out of work,” Watkins said. But he got in touch with Twin Cities Habitat for Humanity, who offers mortgage foreclosure prevention services, and eventually worked out an agreement in which he would pay his back payments while his mortgage modification was in process.
However, he didn’t avoid foreclosure last spring; but Habitat officials later helped Watkins avoid a sheriff’s sale, he pointed out. Then came the run-around: “They [his mortgage company] said, ‘We are going to modify [your loan]… Relax, it takes time.'”
He was promised this for several months before company officials told him that 80 percent of his mortgage loan was sold to a California company, who then told him, “We aren’t going to do anything, but we will relocate you if you give up the house.”
His case continued to change hands, said Watkins. “I called them a bunch of crooks,” he surmised of his dealing with the West Coast-based company.
The audience strongly urged Ellison to return to Washington and tell his fellow lawmakers that something must be done. “I am committed to this,” Ellison said, “and a lot of members of Congress are committed to this issue.”
“We’ve been meeting and meeting about this,” noted Cotton. “I’d rather see more action than talk.”
“I love North Minneapolis,” declared Watkins, who said he invested around $9,000 in remodeling a home that he lived in since 1997 “to make it comfortable for myself and my daughters.”
Afterward the meeting, Watkins said he was glad that he attended because he got some much-needed information that could help him in his present situation. “At first, I had given up… I feel like something is going to happen,” he surmised. “I feel that I have some hope now.”
Ellison concluded, “We need citizen activism. We need to really get in the face of [state and national] lawmakers who have voted against foreclosure reform and housing reform. We need to build a national movement on [a foreclosure] moratorium.”
Charles Hallman welcomes reader responses to email@example.com.