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Coleman: Speed up help on housing
The senator came to the Twin Cities to hear from people hurt by the mortgage crisis, and there was plenty of pain to go around.
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The mortgage crisis that took its first swipe at homeowners is also swinging hard at construction workers, renters and even mortgage brokers -- whose count just dropped by two-thirds -- a panel of Minnesotans told Sen. Norm Coleman in a town-hall forum Monday in Minneapolis.
Warning that problems have not yet peaked, Coleman said he came to ask what more the federal government could do to keep people in their homes and right the collapsing housing and credit markets.
"I don't think we're moving fast enough," Coleman said.
He left with two recommendations: that the federal government allocate even more money for foreclosure prevention counseling, and that, on the other hand, it not overreact with sweeping, new real estate and financial regulations.
The scale of the problem came up in a series of different measures: A congressional study predicts the Twin Cities alone will lose $1.6 billion in property value by the end of 2009. Another study, by the Minnesota research group Housing Link, predicts foreclosures across the state -- 20,500 through September -- will quadruple this year over 2005.
Shoua Yang, a Brooklyn Center mother of three, said her home is headed for foreclosure in December. The interest on her adjustable-rate mortgage went up, raising her monthly payment from $800 to $1,300.
"I fall behind," Yang told the senator. "I'm here to seek help."
The numbers of entangled renters are going up, too, said Mike Vraa, director of Home Line Hotline. In 2006, 88 renters called saying they were stuck because their landlord was in foreclosure, Vraa said. So far this year, the number is 349.
Then there's the impact on construction workers. Randy and Audrey Buchite, of Zimmerman, have a 30-year fixed mortgage, but they've struggled with the payments since Randy, a house framer, was laid off a year ago. He has been working at a lower-wage job near Brainerd. They had to let their $650-a-month health policy lapse and a daughter postponed college to continue to contribute to the family budget, Audrey said.
Minnesota Mortgage Association President Tim Bendel said his industry has taken a hit, too. Brokerage license applications came up for regular review at the end of last month, Bendel said, and early indications are the number of licenses dropped from 4,000 to about 1,400.
One piece of legislation Coleman has already proposed, the Home Ownership Mortgage Emergency Act (or HOME Act), would let homeowners behind on their payments take up to $100,000 from their retirement accounts, penalty-free, to avoid foreclosure through 2009. It also waives taxes on the money if it's repaid within three years.
A similar provision was helpful after Hurricane Katrina, mostly to middle-class families, he said.
H.J. Cummins • 612-673-4671
H.J. Cummins • hcummins@startribune.com
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