Minnesota House of Representatives


State Representative Karen Clark

273 State Office BuildingState Office Building
100 Rev. Dr. Martin Luther King Jr. Blvd.

For more information contact: Joan Nichols 651-29X-XXXX

Posted: 2009-03-12 00:00:00
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New Housing Rescue Plan – A Promising Housing Fix for Lenders and Homeowners

In early March 2009, President Obama unveiled the Making Home Affordable Program to offer immediate assistance to homeowners who are at risk of losing their homes to foreclosure. This new housing rescue plan will commit U.S. Treasury and Federal Reserve funds to policy initiatives intended to put an end to the wealth-destructive stalemate between lenders and homeowners grappling with loans that are more than the value of their home.

Currently one in eight American homeowners is finding themselves in some stage of foreclosure. According to a recent HousingLink report, there were 26,265 foreclosures in Minnesota in 2008, surpassing 2007 foreclosures by nearly 6,000. In Minnesota, 6 percent of all mortgages were recorded past due at the end of 2008, which unfortunately is very much in-line with the prediction for many more foreclosures occurring over the next two years.

We need to break the foreclosure momentum in Minnesota before it destroys more communities and families. I believe President Obama’s housing rescue plan, a.k.a. Making Home Affordable Program, offers a solid starting point because it includes components vital to help homeowners and lenders to return to a stable housing market.

The Making Home Affordable Program will provide loan modifications or refinancing that could help as many as nine million U.S. families stay in their homes and avoid foreclosure over the next several years. The plan is to bring together lenders, investors, servicers, borrowers, and the government, so that all stakeholders share in the cost of ensuring that responsible homeowners can afford their monthly mortgage payments. The overall goal is to reduce the amount that homeowners pay per month to more sustainable levels (monthly payments will be lowered to no more than 31 percent of a household’s gross monthly income). This will help to stabilize communities that have many foreclosures.

Affordable housing is critical to a strong economy and a healthy region. It clearly must be a priority in our economic recovery efforts if we are to return our communities to a more prosperous state. The $75 billion Making Home Affordable Program is the right investment at the right time. This is a program that could lead to millions of loan modifications that could reach at-risk Minnesota borrowers in all segments of the mortgage market, reduce foreclosures, and help avoid deteriorating home values.

The U.S. Department of Treasury has released details on the program in a Treasury Fact Sheet: http://www.treas.gov/press/releases/reports/housing_fact_sheet.pdf. Additional information of qualifications can be found at http://www.financialstability.gov or the Minnesota Home Ownership Center: http://www.hocmn.org/Making-Home-Affordable.cfm. Any and all Minnesotans who are worried about possible foreclosure should get in touch with the program.

Please feel free to call or write with any ideas or issues. I can be reached by phone at 651-296-0294, by mail at 471 State Office Building, 100 Martin Luther King Blvd., St. Paul, MN 55155 or by e-mail at rep.karen.clark@house.mn.

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