Saint Paul, Minnesota – Three House DFL lawmakers unveiled legislation this week that would protect homeowners from needless foreclosures and ensure greater transparency from lending institutions.
The bill expands an individual’s rights when facing a possible foreclosure. The legislation authored by State Representative Mike Freiberg (DFL-Golden Valley) and co-authored by Rep. Karen Clark (DFL-Minneapolis) and Raymond Dehn (DFL-Minneapolis) would:
Freiberg said that his motivation in introducing the bill was the plight of one of his constituents, Rose McGee.
“She lives just a few blocks away from me,” Rep. Freiberg said. “She has a beautiful house -- lived there for decades, made her payments on time. It wasn’t until she had some problems involving her job that she ran into trouble paying her mortgage. She was working with the mortgage company – she thought in good faith – to discuss a loan modification. But this process was ongoing, and she had some trouble getting through to the right person. But as this was going on, somebody else at the mortgage company was instituting foreclosure procedures against her. And her home was foreclosed upon.
“This process is called dual-tracking where someone with the mortgage holder is ostensibly working to help you refinance your loans so you can stay in your home while someone else who is not talking to you during that whole process is basically trying to kick you out of your house. To me, this seems to be kind of immoral. I don’t see any good business justification for this process.”
While it is true that Minnesota’s economy is improving, the home foreclosure crisis continues to touch too many residents’ lives. A 2012 report showed that Minnesota had the 17th highest foreclosure rate in the nation with more than 21,000 foreclosures in Minnesota in 2011. These totals are down 17% from 2010, but are still three times higher than foreclosure rates in 2005. Today’s legislation will allow many of those affected to remain in their homes.
"Foreclosures are such a serious issue for families across Minnesota,” said Rep. Clark. “I'm very pleased to have Rep. Freiberg and our Housing Finance and Policy Committee working to address the kind of 'double dealing' that banks have been a part of during the foreclosure process. We want to provide homeowners with protective tools so that, when they're dealing with this kind of family crisis, they have the opportunity to stay in their homes. Having a home to go back to at the end of the day can have great impacts on education, public safety, and employment. And we're here to make that a priority."
Rep. Dehn, who represents much of North Minneapolis, is behind the bill because it is good for neighborhoods and taxpayers.
"Making sure families can stay in their homes is one of my top priorities. The foreclosure crisis hit North Minneapolis hard, and damage from the 2011 tornado left hundreds of homes in disrepair. Providing relief to homeowners is a common sense step we can take to stabilize our neighborhoods, foster economic development and keep families safe. DFL legislators are offering support for responsible homeowners through a range of provisions that don't cost the state any money.”