Monday, October 27, 2008

Breakfast With Congressman Ellison And More (A Report From HNC Housing Director Jeff Skrenes)

Photographer Unknown, Image Contributed By Jeff Skrenes

Our Hawthorne Housing Director, Jeff Skrenes, was busy last week representing the Hawthorn Neighborhood at a meeting of the Congressional Black Caucus, and more. Jeff sent me a full report by email, and here it is...

This week, (Jeff says) I had the opportunity to speak for two panels: the U.S. House of Representatives Congressional Black Caucus was in town, and in the Hawthorne Neighborhood, holding a forum on the housing crisis. Two days later, I spoke at a policy forum at the U of M continuing education center.

First, the Congressional Black Caucus: I had breakfast with Congressman Ellison (Jeff drops, oh-so-casually) as well as our own (State Senator) Linda Higgins. Keith (Ellison) was right on top of things as usual. I explained how mortgage companies started charging a 5 percent extra payment for a downpayment in "declining markets." When I asked bankers and brokers if this constituted red-lining, they said, "No, because the whole metro area is considered declining."

Before I could even finish, Keith jumped in and said, very animatedly--even more animated than he usually is--"Are you trying to tell me that someone buying in Kenwood needs an extra 5 percent, too?"

That was my point, exactly, there are different standards for (the) Hawthorne (neighborhood) than other neighborhoods, and Keith picked right up on it. Likewise, I mentioned that credit card companies are using where someone makes a purchase, and if it is in an area with a high degree of mortgage fraud, as a means to raise rates or lower spending limits.

Again, Keith took my train of thought and ran with it. I love mixed metaphors.

"So," Keith said, "Someone buying at Savers, or spending their money to revitalize North Minneapolis could be punished for that." This is not a direct quote, but the content is there. Ellison is big on credit card issues, so I made sure he had that article.

At the caucus itself, Fox 9's Robyne Robinson was the moderator. There were three panels discussion the foreclosure crisis and its various impacts. Each panel had 4 to 5 people, so we had to move quickly. The Representatives each spoke, than panelists had 2 minutes apiece to make a statement, then the Representatives and/or people in the audience could ask questions for 20 minutes.

I was asked to be on the panel because I am co-chair of ACORN's financial justice committee in Minnesota, as well as for the work in Hawthorne. Because it was primarily my ACORN connection that got me on the panel, I wore my button and my opening comment dealt with ACORN as well:

"First off, I have to inform anyone who may not be familiar with the area and especially those who have traveled that you are in the Hawthorne community right now. This is where I live and work. I am PROUD of my neighborhood and so I am deeply honored that you have come here today to discuss this important issue.

"I am also glad to hear some of our speakers refer to the repeal of the Glass-Steagall Act as a turning point in how we got to where we are now in this crisis. Nine years ago, who knew what this obscure piece of legislation was? Well, ACORN did, and they protested against its repeal.

"ACORN was speaking out against predatory lending before predatory lending was a (phrase in the popular lexicon). ACORN marched on Wall Street to speak out against the securitization of subprime mortgages before folks fully understood how that worked and how it could impact our communities. In Minnesota, we helped pass the first protection against foreclosure rescue scams called 'equity stripping.' We passed a landmark anti-predatory lending bill in 2007, and had a subprime mortgage deferment bill that was passed but vetoed.

"In the recent bailout package, Representative Barney Frank proposed bankruptcy protections for subprime mortgage victims, but that was taken out. The language that defined who would qualify under Frank's proposal was very similar to the definitions in Minnesota's legislation. Either Frank borrowed from us, or great minds think alike. But moving forward, that's what we need: stronger protections to keep people in their homes, and fair lending in communities affected by this crisis."

At the end, one of the questions was regarding what is being done to help rebuild some of these communities. My response: "We are seeing that someone buying in Hawthorne needs an extra 5 percent down, but not in other neighborhoods. In the short term, Hawthorne is evaluating some assistance programs to counter that and get people into homes now. We just had a meeting with the Minnesota Mortgage Association and discussed this problem with them as well. If that does not lead to constructive changes, we are gathering evidence of what may be redlining. That evidence will become stones that we put in our sling, because we've taken down giants before."

(Here, Jeff is clearly alluding to the recently-settled lawsuit with CitiMortgage)

On Wednesday, I spoke at a Policy Conference at the University of Minnesota's Continuing Education Center. This time, I had 15 minutes to speak, so I won't do verbatim quotes. I did say that while some folks have called low-income communities "the canary in the coal mine" in relation to how when we suffer, it's an indicator of problems to come in the larger economy.

I responded that, no, the problem is so severe and widespread, we're more like the three-eyed fish next to the nuclear power plant. I then showed a picture of (the Polish woman's) garden in full bloom, saying that the dots indicating each individual foreclosure are too often the "face of North Minneapolis" but this is ALSO the face of North Minneapolis.

A banker was on that block and saw the vacancies and problems, and said, "I don't even know where you start." I responded, "You start with a vision of the community."

That's not Polyannish, either. In 2002, there were 16 boarded/vacant homes in Hawthorne. In 2008, there were 165. Since 2005, we've given loans or grants to 183 properties in Hawthorne, and now only 10 0f those are boarded. That shows how when a community vision is enacted well, it can have a tremendously positive and stabilizing effect on the neighborhood. I finished with some dicussion around the "five percent issue."

One of the questioners asked why we wouldn't put bankruptcy laws to use on first mortages. I responded that, traditionally, the industry line against such a move was that if we did so, credit markets would freeze up and no one would want to lend money. Widespread chuckles followed, and I said, very sarcastically, "I know, sounds scary, doesn't it? We sure wouldn't want THAT to happen."

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