Monday, December 8, 2008

City Councilman Don Samuels On The Front Lines Of The Mortgage Crisis Photo

I've written previously about the "North Minneapolis ARMs Defense Plan" and the door-knocking to locate subprime mortgage holders who may be in need of financial counseling, click here and also here.

Well, word comes from Hawthorne Housing Director Jeff Skrenes that...

City Councilman Don Samuels recently participated in the door-knocking effort. I have no further details but I have put out feelers for some anecdotes and numbers about the effort, but according to Jeff there are indeed instances of people saying, "Yes, thank you, I realize I need some help and I've been wondering where to get it." When I have more details, I'll post 'em.

In the meantime, I was gratified to see Minneapolis Public Radio used the phrase "ground war" in covering this story, click here for their article.

311 Meets The Blogosphere (Take The 311 Challenge!)

Photo By Jeanie Hoholik

Hardly a day goes by I don't make a 311 call about something--mostly graffiti--and certainly a week never goes by that I fail to call 311.

Recently, my friend Jeanie Hoholik posted something on her blog about a stop sign which had been defaced in an interesting way...

Even though Jeanie's blog post was accessible to the whole wired world including (so I hear) astronauts on the International Space Station, I knew it was necessary to make a 311 report to actually get the sign fixed.

So I pulled the photo off Jeanie's blog and emailed it to 311 as an attachment, along with an explanation of its origin. (The 311 email address is My report was acknowledged and is now in the system.

Lately, in addition to calling 311 a lot on my cell phone, I have emailed pictures as well, click here for an example. But I've never pulled a picture off somebody else's blog and made a 311 report. So it was kind of cool, an interesting variation on the common pattern... blogosphere meets the 311 system.

Moving At The Speed Of Government

I think one of the problems with 311 is citizens think nobody is listening if they don't see results in a couple of days, a week at the most. They measure 311 by the same standard they measure other systemic requests, such as being promised a refund from a business or having a teenager promise to clean his room.

Well, 311 is like Heinz ketchup. It's slow, but it's gooooooooooood worth the wait. Kevin Gulden of PPL has a phrase for it: Moving at the speed of government.

I would challenge citizens to test the 311 system, and see if it doesn't work for you, and see if it isn't VERY SATISFYING to have it work, even "moving at the speed of government."

Find some graffiti and call it in. In fact, find about half a dozen instances of graffiti and call all of it in. If you can't find enough in North Minneapolis--and that's one good thing, we don't have as much graffiti here as some places--then look for graffiti in the "wannabe gangster" neighborhoods where college students live. (Cough--Marcy-Holmes--cough)

Make a little note to yourself about what day you called in the graffiti and then FORGET ALL ABOUT IT FOR A MONTH.

But in a month, go back and look. I am confident you will see results, and you will feel a sense of civic pride and accomplishment. Lately, the response rate for vacant, unsecured buildings seems to be even FASTER.

CROSSING THE FINISH LINE! 3306 James Ave. N., A Former "T.J. Waconia House" Just Hit The Market Photo

Word comes by email from real estate agent Jeanie Hoholik that 3306 James St. N., about which I have written quite a bit, click here, and also here, just got listed on the MLS...

Jeanie really outdid herself with the listing, slapping up TEN IMAGES of the house. While I was at Jeanie's office, I watched some video "virtual real estate tours" which have appeared on YouTube. I guess this is a new marketing thing, putting virtual tours on YouTube. If I learn of any virtual tours in Hawthorne, I'll try to put a sample on my blog or, well, ya'll are free to chime in on the comments thread and even post links.

"Sell, sell, sell," I say, as well as "buy, buy, buy." Our neighborhood is turning around rapidly, and much of the change is being driven by real estate agents like Jeanie.

There was a slight delay in listing 3306 James St. N. due to getting the oak flooring just perfect, and the extra effort shows in the MLS pictures. The house is currently listed at $139,000. I think the perfect buyer would be somebody working for the Minneapolis Fire Department, due to its proximity to an MFD training facility.

Jennifer The Flipper (not to be confused with Jeanie, Jennifer's real estate agent) has reportedly signed purchase agreements on two more North Minneapolis properties. Will she revitalize North Minneapolis ALL BY HERSELF?

Stay tuned to to find out.

Friday, December 5, 2008

ReBuilding Together Announces New Program, Calls For Volunteers

Photo By John Hoff

Brett Thompson, Emergency Repair Coordinator for ReBuilding Together, was at the December Hawthorne Housing Committee Meeting, and announced a program to help low-income homeowners, as well as putting out a call for volunteers...

You will find Brett's email address at the bottom. At the meeting, I told Brett I'd simply publish her letter to put out the word. I will say, however, the new program to help citizens with much-needed repairs is really exciting. But not everybody who may need such a program is internet savvy, so please help spread the word if you know a neighbor in need who doesn't regularly "surf the web."

Here's Brett's letter:

Calling ALL Skilled Volunteers!

My name is Brett Thompson and I am the Emergency Repair Coordinator with Rebuilding Together Twin Cities (RTTC). RTTC is a non-profit housing organization that brings volunteers and communities together to improve the homes and lives of low-income homeowners. RTTC provides the tools, building materials, and volunteer labor to help low-income homeowners repair or modify their homes to make them accessible, safe and warm at no cost to the homeowner.

Since being founded in 1997, RTTC has rehabilitated 131 homes and 8 non-profit centers thanks in large part to the hard work and dedication of more than 3,500 volunteers.

RTTC is excited to announce Safe & Healthy Homes, a duel minor home modification and emergency repair program that will start in 2009 serving low-income homeowners who are faced with the prospect of losing their home or independence as the result of needing a home modification they are unable to address. The goal of minor home modification is to improve the quality of life and degree of independence for low-income elderly or disabled homeowners by increasing mobility and safety in their homes.

The emergency repair program will address home repairs that present and immediate risk to the safety or health of individuals in the home. To help meet the needs of low-income homeowners with emergency repairs, RTTC has partnered with Project for Pride in Living (PPL).

PPL started their Emergency Repair Program in 1972 and RTTC is excited to join them in this effort to help homeowners when the need is most urgent.

In light of the current economic instability our country faces, it is more critical than ever that low-income homeowners who may qualify for this program are made aware of the services that could help them through the difficult times ahead. In preparation for the launch of Safe & Healthy Homes in January 2009, I am contacting local individuals, organizations, groups and businesses to establish relationships that will help us spread the word about our new program.

Volunters are going to play a critical role in the success of Safe & Healthy Homes. Working with homeowners and RTTC staff, skilled volunteers will provide the dedication and motivation to ensure the needs of homeowners are attended to in a timely manner. There are numerous ways to get involved; including working with RTTC to network with skilled individuals, referring possible low-income homeowners, providing in-kind donations, and/or becoming Safe & Healthy Homes' volunteers.

Skilled volunteer support is also critical for the continued success of RTTC's fall and spring rebuilding days. RTTC prides itself in making quality, in-depth repairs on the homes of low-income homeowners. These repairs are indubitably made possible due to skilled volunteers who bring to RTTC their construction knowledge and those who join the Home Team Volunteer Core and become teachers as they empower and inform volunteers and homeowners in completing home modifications and repairs.

From construction supervisors who spend multiple weeks working with RTTC staff to plan and prepare projects, to house captains who lend their construction expertise to making repairs on rebuilding day, killed volunteers are key components to the success of RTTC's Rebuilding Day Program.

With skilled volunteers taking on these important leadership roles, RTTC is able to focus efforts and resources on addressing the needs of a larger number of low-income homeowners.

If you, your business organization, club or family would like to work with RTTC to improve the lives of your community, please contact me (Brett Thompson) at 651-776-4273. Or email at to gather more information or schedule a meeting.

Click here for the Twin Cities Rebuilding Together website.

Wednesday, December 3, 2008

2207 4th St. N. Situation, Updated, Full Details

Photo By Stacy Shaffer

In a previous post, click here, I provided a brief overview of the situation at 2207 4th St. N., the "party in a condemned house" situation which caused alarm in the neighborhood.

Here is the update...

My Opinion, And I Do Have One

There may be differences of opinion about whether there is gang activity at this house or whether it's sort of a misunderstanding. I'm going to present neighbor Stacy Schaffer's words, and the words of Lieutenant Rugel. But first I'm going to give my opinion, briefly.

First, if there isn't a law against having a birthday bash in a condemned house, there should be. The whole point of a condemned house is they are dangerous and unsafe. So how can there TECHNICALLY be no law against having a party there, which includes eating, drinking, dancing, sitting around yakking, possibly sleeping, possibly making out, and more than likely urinating and defecating at some point?

I mean, if one person can't live in a condemned house for days on end, how can 30 some people reside there at a party for one evening?

Second, and I'm directing this to the new owner of the house, JOSE HUGO CONTRERAS VAZQUEZ of 3305 5th Ave. S., Minneapolis, MN 55408:

Hell of a way to meet the neighbors, Jose, letting your minor son or one of his buddies paint graffiti on the boards covering the windows, and then throw a party with a bunch of teenagers in a condemned house in the tough part of North Minneapolis.

You see, Jose, we have a problem with gangs having gatherings in vacant houses, a problem we're fighting and cleaning up as we turn our neighborhood around by degrees, every day. So congrats on alarming folks, upsetting neighbors, and landing on the radar of police and city officials with your new real estate acquisition. So far, public opinion says YOU ARE A BAD NEIGHBOR.

But public opinion can change. You have an opportunity to change it, Jose.

You could start with getting the graffiti off the boards before the city does it, and charges you money. The fact you were present at the property, and you have NOT does this, says plenty.

Firsthand Account Of Stacy Shaffer

Greetings and Salutations from the North side of Minneapolis. As you know I have had my fill with the democracy that Minnesota/Minneapolis/Hennepin County and who ever else might be involved with making the rules. Over the weekend, November 28, while on my porch having Mommy time, I noticed that a few more than 5 people were moving things into what was, as far as I ever knew, a condemned house...

(They were moving) things like tables and chairs, pool sticks, lights of a not-renovating-a-house nature. They moved in speakers and radios, so I watched...and watched as they moved more and more things in. I contacted Peter Teachout to see if my suspicions were correct that there were no permits pulled with this property. I knew somebody bought the place (I think end of September, mid-October).

Well, the next time I went out I looked across the street to see if there was still people there and lo' and behold there was, and there was an advertisement for a 13 x 13 party in bright, colorful red and green spray paint.

Yes, I am serious, spray paint. They made the street look ghetto, even though it is the hood. I felt like I was back in the projects of New York, even Chicago. My opinion.

Well, as 8:30 crept up on me, I realized there were a lot of people showing up for this party. By this time there were 15-20 people standing, hanging out nest to Miss Shirley's house. Loud and obnoxious. Can these people really be having a party while this house is condemned? Did they just buy this house so they had a place to party? What the (expletive)!

Excuse me, but dang, you know that when we bought our house the 4th Precinct police made our life hell. If we were there too late working, they would harass us. If we were there too early the police wanted to handcuff us and manhandle us. Some days we could not win for losing.

Well, me being the big baby I am, I called the police. Told them there there was a party going on at a condemned house.

"Yes, I am sure that the house is condemned."

"How do you know?"

"Well, for one it just sold a month and a half ago, and according to the net, there has been only one permit, the VBR permit was pulled, by a realtor, mind you, in April of '08, I live across the street and I have yet to see some sort of contractor's truck, or plumbing or anything for that matter to be done. No other permits have been pulled. But yet 'n' still there is a party going on at this house."

The police came about 30-45 minutes the time, by the way...and went to the back of the property where everyone was comign and going, there has to be like 30-45 people there. And, well, they let them go. Police messed with them for about 15 minutes and LET THEM ALL GO BACK AND ENJOY THEIR PARTY.

Police said the owner was on site, and that they had to vacate the building by 10 pm. OK, long enough to get a little twisted and go to the bar and not have to spend so much money. I know the trick, I don't have BOO BOO THE FOOL written on my forehead.

So they left. And they came back at almost 2 a.m. and, well, I called. My civic duty, right. Police show back up and then the people leave, but mind you...none of them took tables and lights or radios.

By the way, did I tell you they had strobe lights and red lights? Sexy. Ugh.

Well, that is what happened. Here is my point: I was told by my insurance company that I could not have anyone on my property that was not licensed. If we had people come help work on our property they worked on their own behalf, and that we would not be liable. Something to do with CONDEMNED properties and HAZARDS or something. (...)

OK, the next thing that gets my GRIND is that so what if the HOME OWNER OF A CONDEMNED BUILDING is throwing a party and it is only 8:30 or 9 p.m. The house is condemned. And we get harassed any time we stepped foot to renovate our home.

How could the police say "The homeowner is here and that's what he wants to do, it is before the NOISE ORDINANCE goes into effect."

Update: Yesterday, while enjoying my few moments before kids get home, on my porch, the INSPECTOR'S truck rolled up and took pictures of the "beautiful art work." (By this, Stacy apparently means the graffiti on 2207 4th St. N.)

I am not sure if it was the fact that I called and HAD A NICE GROWN UP FIRM CONVERSATION WITH THIS MAN WHOSE NAME I FORGET...or the POLITE tone I used trying to find someone who would be in charge of this matter...or Peter (Teachout)...if he called and complained, too?

(Addendum by Johnny Northside: I also emailed your picture to 311 at their handy dandy email address, which is

It is like trying to figure out how many licks to the center of a Tootsie Roll pop. You may never know, but I think it was Peter. Hope you enjoy the photo. I will by working on setting up my own blog. LOVE THE BLOG, TOO! Please forgive the typos.

(Addendum by JNS: I always try to clean up the text of contributors, unless it contributes to the expressiveness of the content)

Ugh. Politics. I bet (here, Stacy speculates about the honesty of the police) so I wonder is this going to be the party house to continue to bring our values down? (...)

New Update From Stacy

In another email, Stacy said: The police were back over there today. I'm not sure why but I saw the man with the red truck get a ticket after the K9s went through, then he and the police left.

Valuable Info From Lieutenant Rugel

A member of the Hawthorne Housing Committee, Michael Klick, asked me by email if I had any more information about 2207 4th St. N. I forwarded Stacy's email before it hit the blog, because I don't sit on top of useful information just to produce interesting blog posts. Klick forwarded it around, and it got to Lt. Rugel of the 4th Precinct. Rugel's reply got back to me, and here it is.

Rugel writes:

The house has been condemned and boarded for some time. It was purchased at an auction in November. The guy who says he bought it is: JOSE HUGO CONTRERAS VAZQUEZ, 3305 5th Ave. S. Minneapolis, MN 55408.

He allowed his kid to have a birthday party in the house last weekend. Officcers were out on two calls but said there was no alcohol present and both calls were before 10 PM when the city noise ordinance kicks in, so they advised the owner (who was on site) that he had to break things up by 10. It looks to me like he did so. The condemnation means the house cannot be occupied, but the owner has a right to go in and out and let other people in, so long as no one tries to live there.

I am not sure about throwing parties there, but it was clearly not a "wild gang party."

I was out on the call yesterday and spoke to the new owner. He was in the house to install new doors and new locks so he could keep it secured. He told me he plans to start working on fixing up the place. I advised him on the need for permits and he said he knows about getting permits.

I told him that he could be in the house to do work (assuming he gets his permits for any work needing them) but he could not live there and he said he understood this. I am not sure what his goal is, here. He owns his house in South Minneapolis but no other properties in the city and has no rental licenses.

I also sent a memo to the new inspector for the area, Joy Parizek. The graffiti on the front door is a problem and I am sure Inspections will order him to have it removed or painted over. Otherwise, I don't think this guy is doing anything wrong.

(Johnny Northside responds: I believe there should be a city ordinance against having a party in a vacant house. The same rationale which precludes individuals from LIVING in a condemned house should, logically and sensibly, preclude individuals from having a PARTY in a condemned house. Clearly, the police must enforce the laws as they exist, however, not as we wish or hope the laws to be. This is a matter for city officials who represent North Minneapolis)

(This is yet another instance where having owner information updated QUICKLY on city websites would be helpful)

On another note: Housing Committee Member Michael Klick speculates the number "2207" is clearly "a cursed number" in the Hawthorne neighborhood)

Monday, December 1, 2008

North Minneapolis "Arms Defense Plan" In Action: Photos From The Front Lines

Photos By John Hoff

Here are some images and stories from tonight's meeting at the Urban League, see previous post, to send volunteers into the neighborhoods and find holders of long ARM, subprime mortgages to (hopefully) get them financial counseling if they need it to avoid foreclosure.

From top to bottom:

1.) We didn't have too many volunteers, or too few. We had just the right amount.

2.) Organizing the lists of homes. At one point, I saw a list actually being cut up with scissors.

3.) Three small portraits of neighborhood leadership. Many neighborhood leaders were there. Truthfully, there were more leaders than foot soldiers.

4.) Minnesota Public Radio and 5.) a reporter from the Star Tribune. Both scooped by this blog, of course. You read about it first on Johnny Northside Dot Com.

6.) Jerry Moore, Executive Director of the Jordan Neighborhood, gesturing as he talks with another volunteer.

7.) Proper headgear is essential for winter door-knocking. I asked an ACORN leader, tactfully, about this guy's rather distinctive dress. I found out Mad Hatter Dude is a very successful ACORN fundraiser. I guess he needs the rather large hat to collect all that money, baby.

8.) One of the squads of volunteers moments before walking out in the cold to go door knocking.

9.) Jeff Skrenes wearing his "chook," knitted by his grandmother in Upper Michigan. Jeff says he's had the cap since he was 4 years old. Jeff apparently had to grow into his brain.

Do not click "Read More"

North Minneapolis "Arms Defense Plan" In Action: Squads Of Volunteers Fan Out

Photo By John Hoff

Tonight, about 15 volunteers gathered at the Urban League to receive information packets and "rap sheets" before door-knocking at North Minneapolis addresses known to have subprime loans originated in 2007.

Media were on hand, including a reporter from the Star Tribune, Minnesota Public Radio, Twin Cities Daily Planet, a film crew from 612 Authentic and (of course) this blog.

The "rap sheets" contained talking points about mortgage counseling, gearing to avoid inducing alarm while making sure those in need of help were given contact information to avoid foreclosure.

Before organizing into teams, volunteers watched "role playing" by two teams, one of which included yours truly starring as a slightly-cranky homeowner with hard-to-admit mortgage problems. Volunteers were organized to make sure individuals familiar with the neighborhood were paired with those who didn't know the terrain so well. There was no shortage of vehicles.

The influence of ACORN on the volunteer effort was in evidence everywhere. One team of volunteers who assembled for a photo was asked, "What neighborhood are you going into?"

"ACORN'S NEIGHBORHOOD!" one answered, and the others laughed in agreement.

The door-to-door effort was expected to take approximately 3 nights, including tonight. The subprime mortgages in question are from a very specific period of time, and so the numbers are more limited than one might suspect, making the effort quite manageable. For example, there are only 8 such mortgages in the Hawthorne Neighborhood. The lists in usage are known to be quite up-to-date. 

As volunteers put on hats and gloves, and went out into the cold and dark winter night, I was oddly reminded of a volunteer search party seeking out the body of a crime victim. It seemed to me that success might be measured in saving only one family from the loss of a home, but if that happened, it would be worth approximately three evenings of effort by a dozen volunteers. 

I watched from a vehicle as Jeff Skrenes and his team member visited the three houses on their list of eight. The first house on Third Ave. N. had a Hmong family who spoke no English and appeared to be renters. Language appropriate resources will be sent to the house in the future. 

The second house had a man who was a renter, but had no interest in talking. At the third house, no lights were on except what appeared to be the dim light of a television in one back room. Nobody answered, but Jeff Skrenes was able to determine the name on the mailbox was different than the mortgage holder so, once again, probably a renter. Information was left at the house...not in the mailbox, of course, but on the doorknob. One goal of the program is, of course, to help renters avoid sudden, unexpected evictions in the wake of foreclosure.

More details about the "Hawthorne Arms Defense Program" will appear on this blog as they become available.

(Do not click "Read More")

A Photographic Celebration Of ReBuilding Together Volunteers!

Photos By Pam Patrek

Pam Petrek took a bunch of photos of ReBuilding Together volunteers and here are some of the images.

From the top to the bottom,...

1.) Pam tells me these women built the "south side wall" all by themselves. Here, they pose with their handiwork.

2.) Once again, a mysterious lavender aura appears in a photo taken near Pam's house, like I blogged about before, click here. But previously it was a DIGITAL image, while this picture was taken with OLD-FASHIONED FILM. Pam accounts for it this way: Uncle Jack was a tool guy. Power tools interest him.

3.) I think it was the Puritans who said, "Many hands make work light." Of course, they had a much more interesting saying about idle hands, and that's the one people tend to remember.

4.) 5.) Posing for group portraits after a job well done.

Sunday, November 30, 2008

On The Front Lines On Election Day, A Report From South Minneapolis

Photo By John Hoff

Jeff Skrenes had some interesting stories about Election Day, and I finally convinced him to write all that stuff down in an email, for the historical record...or, for that matter, any investigation which might happen into voting irregularities in Minnesota in light of the Coleman/Franken recount...

Here is Jeff's firsthand account, from an email dated November 24.

I went to the Walker Methodist Church in South Minneapolis on Election Day. I had done a fair amount of doorknocking already in my own North Minneapolis neighborhoods, but since I speak fluent Spanish, I felt that was potentially more needed in South Minneapolis on Election Day.

My role was to go around to various polling places and see if there were long lines and/or problems, then call back to the DFL station at teh church and report what was going on. From there, I would try to make sure folks in line had what they needed in order to register and vote, as well as keeping their spirits up so they wouldn't leave without voting.

Also, we were to watch what the Republican and Democratic challengers were doing and call back to notify people if there were illegitimate challenges happening.

I arrived at a polling place on 22nd and 1st in South Minneapolis and the line was literally snaking around the block. I found some other DFL volunteers who did not really know how to respond to this. Here's why the place had such problems: The area had a large number of college students and immigrants, leading to many people who were not registered at the polling place. Since it was a prime area for first-time voters as well, a fair amount of people were standing in line with inadequate documentation.

To compound matters, the polling place did not have enough voter registration cards. We all read in the papers about reports that some Minneapolis polling places ran out of cards. I'm sure this was one such place those allegations referenced. They never 100 percent "ran out," but because they were so low, they did not allow volunteers to take cards outside and register people in line.

So for quite a while, there wasn't much we could do other than walk up and down the line talking to people and trying to make sure they had what they needed. While doing this, I went up to a person whom I found out later was a Republican challenger. I asked what rules I needed to follow in terms of who I talked to, where, and what I said.

He asked what organization I represented and I said I was there on behalf of the DFL. He then told me I could not come closer than 100 feet away from the property line of the polling place.

Not true. I can be 100 feet away from the ENTRANCE.

He told me I could not talk to people in line.

Again, not true. As long as I am not harassing people, I can talk to anyone in line, and as long as I am past the 100 feet rule, I can talk about pros and cons of candidates or ballot issues.

This is just one example of how it seemed to me that Republicans wanted to suppress voting instead of upholding the rules. I did comply with what he said about the 100 feet rule, only because the lines were so long, anyway, that I could talk to folks well before they got that close.

Finally, enough voter registration cards arrived that they could allow volunteers to get people registered while waiting in line. So I went inside the polling place and picked up a stack of cards. With a few volunteers going through the line and getting folks registered, the pace really picked up. Also, once I had those cards in my hand and it was clear to the Republican challengers that I was there primarily to help the voting process, they warmed up to me a little.

One technicality: A lot of people brought their leases as proof of residence. A lease without supporting documentation such as a current ID or utility bills matching the address is not sufficient to register. So when I came across such people in line, I said to them, "The lease isn't enough to register, but your neighbors in line can VOUCH for you. So if the lease is enough to convince them that you live in the precinct, have them vouch for you and you're all set."

Minnesota has great laws that allow voters to make their voice heard.

There was also a guy who was either drunk, high, or had some mental issues, who was going up and down the line yelling derogatory thigns about McCain and Palin. While I agreed with some of the comments, it was clear he was violating some rules and making many voters uncomfortable. So I went to the Republican challengers and asked if they would escort the man off the premises, which they did.

The fact that a DFLer asked Republicans to uphold rules even perhaps to our own detriment won me MAJOR points with the GOP challenger crew.

(Johnny Northside aside: Oh, Jeff, how nice. Maybe they won't shoot tear gas at you)

I stayed and registered people until almost 8 PM before joining up with (Johnny Northside) to celebrate the Democratic victory. That's my election day story.

A Party In 2207 4th St. N., A Condemned House

Photo By A Citizen Volunteer

This blog post is a preview. I do not yet have full details, though I was provided a cell phone picture by a citizen volunteer...

Full details will come soon and will be posted here. This is what I know from a phone call:

Last night, graffiti appeared on the boards over 2207 4th St. N, a condemned house. The graffiti apparently alludes to a particular gang. It is my blog's policy not to mention gangs by name, but the graffiti speaks for itself. This house should not be confused with 2207 SIXTH Street North, which I have blogged about several times in the past.

Police were called to 2207 4th St. N. because of the noise of the party and because one ASSUMES (perhaps wrongly) there is some kind of law against having a party in a condemned house. If people were supposed to be there, it wouldn't be condemned. It was observed that lamps were carried into the house.

Police arrived and made the party quiet down shortly after 10 PM, but did not make gang members leave the condemned house. At about 1 or 2 in the morning, the party got noisy again. Overnight, a boarded-up house which presented no problems to surrounding homes has turned into a scary gang party house.

I was asked to blog about the matter, and I said I would. I'm awaiting further details by email and hopefully more pictures. In the meantime, the graffiti on the house is a straight up violation and 311 has been notified.

It is believed the ownership of the house may have changed hands recently, but we have no confirmation of that right now. There is an open permit for a Code Compliance Certificate from April of this year, and the current owner is listed as "Ying Vang."

Criminally Inclined "Winterization Crew?" (A Story From Jeff Skrenes)

Photo By John Hoff, for illustration only

I felt a lot better about calling 911 on the rough-looking "winterization crew" (previous story, click here) after Jeff told me this epic tale, which I am including pretty much as he sent it, liquor-longing asides and everything...

In an email dated November 25, 2008, Jeff says:

Here's my story:

I received a series of phone calls from my ex towards the end of the day at work. My standard operating procedure is to ignore these calls as much as possible, although curiosity often gets the best of me. I want to see how badly she's screwed up her life, and I'm rarely disappointed in that regard. I think the German word is Schadenfruede.

Well, the phone calls just did not stop, which is a surefire sign something rather spectacularly bad is happening. I checked the voice mail, and I hear:

"There's an emergency at the house."

John, I have a headache just writing about this crap. Just so you know.

(John replies: Jeff, your personal sacrifice is not in vain. This story about an unsavory "winterization crew" is valuable to the community. Suck it up and soldier on)

Reluctantly, (knowing at least I'll get a surreal story to regale others over a beer) I called her back. It turns out there were two men from Safeguard Properties (219-739-2900 if anyone wants to call and inquire about what happened at 644 Como Avenue in St. Paul) who were there to secure and winterize the property.

A bit of history, here: we separated at the height of the market, right before the crash. By my estimate, if we had sold the house right then, we would have walked away splitting $70,000. Instead, she insisted on staying there and keeping the house, with me getting a portion of the equity as per the divorce decree. With prices where they are, now, I doubt I'd have seen any money even under ideal circumstances. But she was set to remarry and a month before the new wedding, her fiance walked away, leaving her with one income to support a 2-income house. So she walked away and let it go into foreclosure.

So I am actually OK with the mortgage company sending people to secure the place and winterize it. Goodness knows we could use that kind of preventative action more often in North Minneapolis. There are, however, two things wrong with this picture:

1.) first, there has been no sheriff sale, so nobody should be changing locks without making sure I, as an owner, have a key. I would gladly give that key back once ownership is fully out of my name.

2.) And second, the two men had moved some boxes from the attic down into the livingroom. These were boxes that contained my ex-stepdaughter's porcelain dolls, which could probably fetch a nice sum.

My ex showed up to get the last of her things while they were rummaging through the place. After they identified themselves, without any further prompting, they said, "We didn't take anything" and "You can look through the boxes and see it's all there" and "The wedding dress in the attic looks like it's worth a lot of money."

My ex said they couldn't even look her in the eye.

This is how much of a mortgage nut I am. I couldn't help but dig deeper, regardless of how much the scenario made me want to grab a mixed drink of Jack and Pepto. I was compelled to call Safeguard and get to the bottom of this.

They informed me they had been given work orders by the mortgage company (Aurora Loan Services) to put new locks on the place and winterize it. They were nice enough to put in a request to the mortgage company for authorization to send me the new keys.

When I told them about what the two people had clearly done with the personal items, they said that no orders or authorization had been given to go through or remove personal items and "They know this." The only exception, they said, was if personal items in the house were creating a hazard and needed to be moved to make the place safer, i.e. paint or gasoline or what-have-you stored next to a furnace.

The operator at Safeguard said she was going to look into whether these two guys were direct employees or sub-contractors. If they were sub-contractors, they wouldn't be called back for another job.

(John chimes in: well, better investigate to make sure they didn't steal anything at the other jobs, too)

If they were direct employees, they would be subject to disciplinary action, "up to and including suspension or termination."

(John says: Well, I sense one of those "he said, she said" situations coming on)

There you have it. I know I owe you for getting those other policy-heavy stories up there on short notice (click here) (and here) but this still feels to me like you owe me a beer.

(John replies: You had a bunch of free booze at Jeannie Hoholik's house when I got us all invited there for Thanksgiving so...we're even)

Saturday, November 29, 2008

Incident At 2214 Lyndale Ave. N. (Follow Up Report)

Photos By John Hoff

Several days ago I blogged about the rough-looking characters I saw cleaning out the house at 2214 Lyndale Ave. N., and how I called the police because it didn't look right, and how one of the guys didn't cooperate as quickly as he should have, and found himself taken down to the ground. Click here to read that old blog post.

Well, here is (as Paul Harvey would say) THE REST OF THE STORY...

Some days ago I was driving around on 4th St. N. near Farview Park when I saw a couple guys on the porch of a long-vacant house, once again fooling around with the front door. I recognized the guys...the same two characters from the incident at 2214 Lyndale Ave. N.

Well, since they were running around loose and doing the same exact stuff, I figured maybe they really were doing some halfway legitimate work, even if they looked like a couple of no-account house thieves there to literally steal the kitchen sink.

So I figured this time, before calling the police, I'd manage to get the license plate of their vehicle...unlike before...and I'd stick my nose into matters even FURTHER because I'm like that.

So I cruised around the block, slowly, got the plate number, and then parked right behind their vehicle. I acted like I had just finished talking into my phone, maybe calling the police.

I could tell the one guy ("Fat Boy") had seen me. He was on his precious phone, again. Calling the person known as "honey," I figured.

I opened my van door and stood nearby, the vehicle still running, ready to get back inside if necessary. My vehicle is my best weapon. I've discussed this before.

"So are you putting a deadbolt in THIS ONE, too?" I asked.

The older guy took one look at me and went ambling down the sidewalk, leaving. The other guy (Fat Boy) walked over, carefully, cell phone in hand.

"We're winterizing," he explained. "Who are you?"

I told him who I was. I told him this was my neighborhood, and we watch the houses around here "like hawks," and so when we see somebody going up to a house, cleaning it out, we want to know what's up.

We had an intense discussion, at times both of us speaking over the other. He handed me the cell phone and told me to talk to the guy on the other end, who identified himself as a local real estate agent named "Johnson." (Yes, he gave me a first name, too)

Johnson complimented me on my determination to protect the neighborhood--after all, this very house had the pipes stolen, he said, making the "winterizing" task of the crew he sent rather besides the point, but all the same. Johnson said the mortgage company in possession of the house was "breaking (his) balls" to get the "damn place winterized." So that's why he'd sent the crew over on short notice, to get it done.

I told Johnson his "winterizing crew" didn't look like much; they had no company vehicle, no jackets or hats identifying them as...anything. What were we in the neighborhood supposed to do or think when we saw such rough-looking individuals pull up to a vacant house and pry on the front door with--for god's sake--a Phillips screw driver? Should we take the word of a guy on a cell phone?

I said, "Tell you what. I'll make a deal with you." I said I'd take a picture of his crew. That way, if there were any questions, well, I'd have some documentation about who was at the house. Paul agreed. Fair enough. I snapped the picture. The other guy had, as I said, toddled off the minute he saw me coming.

After that, me and "Fat Boy" got into a discussion, again. He was rather incensed about what he'd endured from the police. I told him if he'd stopped talking on the phone when the officer gave him directions, things would have happened a lot differently. "Fat Boy" then told me the officer had called him a "white peckerwood." He said he'd "get paid" for what had happened.

"I was standing right there," I said. "I don't remember anything like that being said."

"I thought you said you were a block away when you called!" he snapped.

"When I called 911, yes," I clarified. "But when the cop took you down, I was standing right there. Heck, I saw your belly pop out of your t-shirt. No such thing was said. I'll be that officer's witness."

I told "Fat Boy" he should get something identifying himself as a workman doing legitimate work. Some kind of jacket, perhaps. I pointed to my own jacket which says "CRI Remodels, Inc." I didn't bother to mention I'd literally found it on the street a year ago, but that would only drive home my point: if I can get a jacket which (accidentally) makes me look "workmanlike" by scrounging one off the street, "Fat Boy" could easily make himself look more legitimate.

I also learned there really had been a couple guys with a truck, cleaning the place out. "Fat Boy" said they didn't do a good job, and he made them come back later.

Decent enough work if you can get it: getting paid to clean out the house, then making more profit by selling the items you "clean out" of the house. Twice I've worked for "affordable housing" rental property companies, and I always enjoyed "cleaning out" apartments, particularly the freezers where steaks and shrimp were, often enough, simply abandoned. I abhor waste, and I value conservation of the earth's resources over black-and-white lines about who owns what. Sometimes, I assert, ownership is gray.

But, all the same, some of these "winterization" crews clearly are a rough bunch, and legal lines get crossed. Jeff Skrenes sent me a story about THAT, which I'll share in the next blog post.

In any case, despite their rough appearance, and something of an attitude problem dealing with police trying to protect our homes, these guys apparently are some kind of freelance, seat-of-the -pants, won't-break-your-budget "winterization crew." Calling 911 on them was what you might call "friendly fire."

I admit it. It was the wrong call. People tell me I made the right call and what was I supposed to do? There were, all told, FOUR OF THEM AT LEAST cleaning out that house at 2214 Lyndale Ave. N. Was I supposed to saunter up and ask "What the heck?"

I hate it when that happens. But what can I do? I have to shake it off. I'm not going to let North Minneapolis houses get robbed of copper if I'm standing right there with a cell phone. And the story Jeff told me a few days ago (next blog post) confirms some of these "winterization crews" aren't completely honest.

What?! No Water At "Water World?"

Photos By John Hoff

I was driving around with Jeannie Hoholik of Keller Williams Realty, when I noticed something odd at 406 30th Ave. N....

Oh, my word, could it be...a utility shut-off notice? Common enough in North Minneapolis, yes, but here's the rich irony: this is the house I dubbed "Water World" because of a rather dramatic story I heard from a real estate agent about copper pipes ripped out...the entire basement being flooded, then FROZEN SOLID.

But this summer "406" was completely renovated, albeit with some corners cut. Check out the paint job, above. I'd call this a "Stupid North Minneapolis Home Repair" but the standard for that is high and hard, and it's difficult for something as minor and mundane as a bad paint job to qualify.

In any water at Water World. Huh.

What next, blood and toads from the sky?!!!!!

3306 James Ave. N. (Cute Starter Home With A Colorful History, PART TWO)

Photos By John Hoff

Here are a few more pictures I snapped at 3306 James Ave. N., at the end stage of its dramatic renovation...

From top to bottom, 1.) a more casual portrait of Tom, the contractor. He didn't see this one coming, so he looks more natural.

2.) Detail of the "keystone" feature over the front door. This was a golden opportunity for me to pontificate about the importance of the keystone to human history, because being able to support weight on stone arches allowed bigger buildings to be constructed, buildings which became important centers of religious and political administration. Though other construction methods have (mostly) surpassed the use of vaulted arches, one still sees decorative allusions and homages to the importance of the "keystone" in human history, as here at 3306 James Ave. N.

Given its central role as the first "special supervision" T.J. Waconia house to be renovated, 3306 James Ave. N. is indeed playing a kind of "keystone" role. This house shows it is possible to purchase and renovate these houses, and the bureaucratic hoops are not so difficult for QUALIFIED RENOVATORS with no history of being SLUMLORDS.

3.) Jeanie showing how open and airy the basement is, now that all the old partitions have been ripped out. I notice Jeannie's footwear is rather similar to what Connie Nompelis wears. Is this a real estate agent thing?

Note the copper pot hanging on the wall. I think it might be covering an old furnace hole, but the use of COPPER as a North Minneapolis basement decorative motif is an interesting trend.

4.) New plastic pipe. Sigh. See, this is why people will have to decorate their basements with objects made of copper.

5.) The old birdhouse in the back yard of 3306 James Ave. N., still awaiting renovation.

3306 James Ave. N. (Cute Starter Home With A Colorful History, PART ONE)

Photos By John Hoff

Knowing my obsession with the T.J. Waconia mortgage fraudsters--who will apparently be sentenced to prison next month--Keller Williams real estate agent Jeanie Hoholik gave me a private tour of 3306 James Ave. N., which is nearly renovated and will be listed any minute, now...

I blogged about this home before, because it's the first of the houses sold under special court- mandated supervision, and now it's probably the first one to be re-sold or, well, "flipped."

And some people say the era of "flipping" is over. Not in North Minneapolis, baby! I hear lovely Jennifer The Flipper just made offers on two more houses, one in the Jordan neighborhood and one in Folwell. You go, girl!

Though flipping has a bad name, (only lately) I'll defend what Jennifer is doing: she's turning vacant houses into owner-occupied properties. In this case, the house at 3306 James Ave. N. used to be a rental...and kind of a sad one, though luckily set amidst nicer homes and right across from a training facility for the Minneapolis Fire Department. But now "3306" is cute as a button on a baby's belly.

The Real Estate Equivalent Of A Politician's Dark Blue Necktie

A contractor named "Tom" has been working on the place, and he's not partial to having his picture taken. Above, you can see Tom pulling out his hammer to express how he feels about portrait photography. Tom prefers to have his work speak for him. I had seen the "before" pictures, which I hesitate to even link to because THE CHANGE IS SO DRAMATIC. Everything is light, new, airy, polished, painted.

Jeanie taught me a few things about flipping as we toured the house. For starters, flipping a house is kind of like dressing a politician: you don't go with a quirky tie. You need something everybody can agree looks good. So there's a certain popular shade of floor tile, and counter top. Young buyers are apparently partial to polished steel fridges. Who knew? From walls, to carpet, to trim, everything caters to a moderate aesthetic.

Two bathrooms. That's the rule. That's what buyers want. So give it to them.

I noticed Jennifer's contractors were using plastic water pipe, blue for cold and red for hot. Gone are the days of copper pipes, sigh. It's sad, really. But the new pipe looked good.

Out in the yard, I noticed the shingles on the garage looked new. I turned around and realized...same shingles on the house. Also new. Black, of course. Nothing quirky with the shingles, like green "Timberline" brand. Nothing that looks like a patchwork quilt, to be creative and use old, multi-colored shingles; like a certain relative of mine has been known to inflict on farm buildings.

Clues To The "Past Life" Of 3306 James Ave. N.

If you know where to look, clues can be found about what the house was before...a rental, possibly with other rentals within it, people piled in thickly, shoved into corners.

The basement had been full of partitions, which had to be ripped out. Jeannie had seen what was there before and was thankful it was gone now, except for a few old marks on the floor which I suspected would get painted over. A big, run-down doghouse in the back yard was gone, too, except for a place where sod was missing.

I could blame T.J. Waconia, but I suspect they acquired the house like that, and had little opportunity to renovate and rent before the pyramid scheme came crashing down. But Jeanie thought it was just fine to blame T.J. Waconia, and good clean fun, too. When I pointed out the birdhouse in the back yard was wrecked, Jeanie said to blame T.J. Waconia.

"Seriously," I said. "That birdhouse is missing walls. It needs to be fixed."

"Let the birds fix it," Jeanie said. "Let them patch it with mud."

Well, I decided, maybe it was kind of cool to leave the old birdhouse as it was. After such a dramatic renovation of the house, few clues would be left of the past for the next owners to enjoy and contemplate. But the run-down birdhouse was an exception. Yes, I realized, let it be. Leave it for the next owner to lovingly renovate, as a kind of quirky personal project, or tear it down to assert domination and ownership of the back yard while the wife (of course) has control over all interior aspects.

Johnny Birdhouse

If it were up to me, I'd put birdhouses everywhere in North Minneapolis. I'd spend all day sneaking into the back yards of vacant, boarded-up homes, sneaking bird houses into the trees. I'd be "Johnny Birdhouse." Where would I get the birdhouses? Salvation Army. Or I'd build them myself, from old antique basement doors chewed on the bottom by vicious, neglected pit bulls, from odds and ends of wood, or from gallon-sized cans with kicky painted-on product motifs like Folgers Coffee.

Too bad I have other things to do, like blog. Oh, well. I can make sure any property which falls under my control has adequate birdhouses. I can advocate for the renovation of birdhouses, and appreciation for barn swallows, the official bird of North Minneapolis. (According to my blog)

Something Like 139 T.J. Waconia Houses Left To Go!

So that's one T.J. Waconia house down and...well, there are more. There are more houses to be bought, flipped, turned into lovely starter homes. GET 'EM WHILE THE GETTIN' IS GOOD, I SAY!

North Minneapolis is TURNING AROUND. I hear (secondhand, through Jeannie Hoholik) it's actually becoming difficult for Jenny The Flipper to find flipping bargains, because the properties are being snapped up.

This is both good news and bad news. Clearly, the current era won't last forever, and not for anybody: flippers, home buyers, home sellers, barn swallows that currently have endless expanses of vacant buildings in which to breed. History marches forward faster than I can write about its footsteps.

Tuesday, November 25, 2008

Two Mortgage Experts Debate The "North Minneapolis ARMs Defense Plan"

Photo By John Hoff

When Jeff Skrenes asked me to publicize an  innovative new program to get out ahead of ARM mortgages, click here, I had no idea the plan might be the least little bit controversial. Honestly, when Jeff starts talking about the nitty gritties of mortgages (as he so often does) I pull the same act I once used on my ex-wife when she began going on about her arcane forensic accounting triumphs...I smile faintly, maintain eye contact, nod from time to time, throw out a few phrases like, "Oh, really?"

But it turns out some folks are actually, really, totally INTO this issue, including Alex Stenback of Behind The Mortgage Dot Com...

As a few truly obsessed Johnny Northside readers may know, Johnny Northside was "born" on a particularly hot chat thread of Behind The Mortgage Dot Com, where I first used that name. There it was on BTM that I gained my special superhero blogging powers to fight evil and revitalize my neighborhood, when the chat thread began to radiate a strange, other-worldly energy from the psychic force of the conflict surrounding T.J. Waconia.

So it's always kind of cool to touch base with the blogmeister of BTM, Alex Stenback. Since the subject was mortgage nitty-gritties, I casually sent a link to Alex.

Alex replied with a 7 point discussion.

Holy cow, I thought, Jeff might find this interesting. So I forwarded it, because, well, SOMEBODY should find mortgages interesting, and that person is usually Jeff but, obviously, it's also Alex.

In a short while, Jeff replied with a 7 point reply/rebuttal; sent to me but cc'd to Alex.

How quickly an "ARMs plan" turns into "ARMed conflict."

Some people--and I'm not going to name names, here, but it's not just Alex and Jeff--are incredibly interested in this issue, and tuned in to this debate. So I'm going to print Alex Stenback's 7 points, and Jeff's 7 counter-points. If these two mortgage-obsessed geeks want to continue the discussion, they can use the comment threads.

Get your popcorn. Here's the ARMs PLAN BOXING MATCH between Jeff Skrenes and Alex Stenback.

ALEX STENBACK SAYS: In order for these people "trapped" in ARMs to get any relief, they'll need to have equity in their homes. No equity mostly means no refinance/modification. Only way to determine this will be via appraisal, at a cost. You might find an appraiser who can give you a bulk discount to speed the process of sorting through "help-able" people.

JEFF SKRENES REPLIES: I can't say for sure how foreclosure prevention counselors at agencies such as ACORN Housing and Twin Cities Habitat for Humanity get around the equity issue. However, I am 100 percent positive that they do not obtain appraisals in the vast majority of the loan modifications they get from lenders. Determining equity is helpful, and appraisers may come in handy if we need to start talking about principal reduction to market levels. But mass appraisals are not a necessary component for mass modifications.

ALEX STENBACK SAYS: An assumption that the fact that they have an ARM automatically means that they are A.) in distress, B.) will be facing an upward payment adjustment, is far from a no-brainer. Many AARMs of the vintage you discuss are adjusting down (short term/index rates are very, very low right now) or to something resembling (within 100 to 150 basis points) the going rate for 30 year fixed rate paper. Refinancing costs money--equity, usually--so it often is not the best economic decision for them unless they have equity to burn and are facing a huge payment increase.

JEFF SKRENES REPLIES: We will be pushing for loan modifications in the majority of cases because a refinance includes closing costs and a modification usually has little to no cost. However, the "normal" way to get out of a predatory loan is to use the market (refinance).

If we can find even a few people who use that route it will help bring things back on track. Where I must significantly depart from what you write is regarding rates adjusting downward. All ARM loans have riders that set limits on how high and low the rate can go. In most subprime loans, the minimum rate is equal to the starter, or "teaser" rate.

And I don't call it a "teaser" rate for nothing. Subprime loans are usually indexed to the London Inter Bank Offered Rate (LIBOR) in such a way that no matter what the LIBOR does, the rate will almost always go up. For prime and alt-a loans, this may not be the case, but we will be putting folks in touch with certified non-profit counselors who are trained to examine what is in the best interest of their client.

ALEX STENBACK SAYS: For what it's worth, ARM's adjusting are something like the 8th item on any credible study (one by the Boston Fed comes to mind) of the causes of foreclosure. You might creditably claim that a phalanx of marriage counselors would keep more people in homes.

JEFF SKRENES: (Made no reply)

ALEX STENBACK SAYS: Many of the ARM borrowers you are targeting will not have the credit quality for a refinance or modification (even acceptable credit risk modified loans re-default at a 50 percent clip, by the way)

JEFF SKRENES REPLIES: That number depends on what gets considered as a modification. I've seen "modifications" where someone in a loan with a rate that adjusts every six months gets a one-year freeze on the rate. WELL OF COURSE that is going to result in a re-default.

I don't have re-default rates at my fingertips for our primary counseling services, but it's something I'll look into. As far as where ARM resets rank, I agree that there are other factors that can be more pressing, such as medical issues, job loss, and divorce. But North Minneapolis has historically been redlined and has not received the same kind of credit other communities get.

In the mortgage boom, we were "green lined" and given grossly inappropriate loan products. In 2006, 64 percent of purchase loans and 58 percent of purchase loans to African-Americans were subprime. Almost all subprime loans were ARMs.

Sixty percent of those recipients qualified for a better product at the time of closing. Even with those stats, I was surprised to see how many more North Minneapolis folks cited job loss as the reason for their default.

However, the data clearly shows that our communities deserved better than what they got. We can't track house-by-house whose marriage is at risk, or who is losing their job, but we can do this for ARM resets. And speaking from my own personal experience as a divorcee--

JOHNNY NORTHSIDE INTERJECTS: Oh, good lord, I knew THIS was coming when Jeff just brooded in silence while Alex said something about "a phalanx of marriage counselors."

JEFF SKRENES: --and a recipient of a subprime loan, the bad mortgage can place stress on a marriage, so it's a case of chickens and eggs in my book.

ALEX STENBACK SAYS: A door-knocking campaign like this could very well terrify homeowners--

JOHNNY NORTHSIDE INTERJECTS, LIKE A SMART ALEK: No, it's the people who DON'T knock on your door but come inside your house ANYWAY who terrify us in North Minneapolis.

ALEX STENBACK CONTINUES: My advice would be to focus on informing people what the terms of the ARM are, what the payemtns will adjust to, how, and when. Maybe I mistake the tone, but this whole things looks a little like anybody with an ARM is going to be treated like a gunshot victim in need of an emergency transfusion. I think that would be counterproductive.

JEFF SKRENES REPLIES: I have spent years doing this kind of work and know how to approach at-risk homeowners in such a way that it won't "terrify" them, and I am quite capable of training others to do the same. Our partner agencies have folks doing this who are better than I am at such tactics. To the few who would be "terrified" regardless, if we're bringing the ARM situation to the forefront, it's not counter-productive.

Many ARM recipients were told by their broker that they have a fixed rate, so I am sure we'll come across a fair number of people who honestly had no idea what their mortgage terms were.

ALEX STENBACK SAYS: You should not throw these people back into the ARMs (no pun intended) of lenders that got them into or bought their toxic loans--

JOHNNY NORTHSIDE POINTS OUT: You capitalized "ARMs," Alex. Clearly, the pun WAS intended. Let's try to have a good clean fight, here, and keep those ARMs above the belt.

ALEX STENBACK CONTINUES: Assemble a cadre of good, honest loan officers who are willing to work with the subject borrowers on a one-to-one basis. As satisfying as it may be to try shaming the current lenders publically into "dealing with these loans" the only course of action they will take is whatever is likely to result in the least loss for them, IF there is any loss at all.

JEFF SKRENES REPLIES: The first contacts for the borrowers will be non-profit foreclosure prevention counselors. I spent six years in the mortgage industry, so I know who the good guys and bad guys are, and public shaming is certainly not my first route--


JEFF SKRENES CONTINUES: --However, we're beyond the point where we can afford to play nice with those who are responsible for this crisis and I am proud of my track record of successfully using public shaming as a way to bring about benefits for individuals and communities.


ALEX STENBACK: I will reiterate that adjusting ARMs are far down the list of foreclosure causes.

JEFF SKRENES: And I will refer you back to my response.

JOHNNY NORTHSIDE: (Doing a bad Howard Cossell imitation) Both of these fighters are exhausted, and just trying to run down the clock while keeping their ARMs in front of their faces, both hoping for a points victory from the judges.

And there's the final bell!

Good job, gentlemen. You really should take your little show on the road.

ADDENDUM: Alex Stenback says, by email, Jeff and him have a lot of common ground. He also points out "your instigator is showing."

Monday, November 24, 2008

IMPORTANT BLOG EXCLUSIVE: Minnesota Housing Finance Agency's Draft NSP Plan Will Hurt Neighborhoods, And Fails To Comply With Federal Law

Photo By John Hoff

Once again calling upon the Johnny Northside blog to quickly spread information about a critical situation in our neighborhoods, Hawthorne Housing Director Jeff Skrenes has asked me to make the following public as soon as possible...

The headline on this blog post is my summary of the situation. The rest of the information comes verbatim from Jeff Skrenes, via email, and also from a letter forwarded by Jeff. The letter was written by Jerry Moore, Executive Director of the Jordan Area Community Council, Hawthorne's sister neighborhood on the other side of Emerson Ave. N.

First, the letter from Moore, as follows:

November 21, 2008
To: Dan Bartholomay, Tonja Orr
Minnesota Housing Finance Agency
400 Sibley Street, Suite 300
St. Paul, MN 55101

Re: Failure of MHFA draft NSP plan to comply with federal law; An alternative allocation which complies with federal law provides the central cities with an additional $9 million

Ladies and Gentlemen:

It is no secret Jordan Neighborhood along with many other urban communities have been the hardest hit by the foreclosure crisis. In the past, opportunities have surpassed us for various reasons. Currently, we are faced yet again with a federal resource that could provide substantial relief from our homeowner's crisis; however it is my understanding we are being overlooked for adequate funding.

The Neighorhood Stabilization Program (NSP) Draft Substantial Amendment made available by MHFA on November 7 misdirects at least $9 million of this important resource away from areas of greatest need in the central cities and fails to meet the statutory and regulatory requirements of the program in a number of important ways, thus jeopardizing NSP funding for the state.

It is clear to me that we cannot afford to sit idle on this issue in hopes appropriate allocations will be made. This is a prime opportunity for community and governmental partners to join forces to assure an equitable amount of resource is allocated to the 55411 zip code. In order to achieve this goal we must first be fully aware of what we are up against. The following information highlights in detail areas of concern.

1.) Failure to distribute funds to areas of greatest need

The federal statute requires that a state in distributing NSP funds "shall...give priority emphasis and consideration to those...areas with the greatest need." The statute provides that "areas with the greatest need" include those with the highest concentrations of home foreclosures and subprime loans. Similarly, the HUD regulations for the NSP program require that the state application identify the geographic areas of greatest need and demonstrate how its proposed distribution of funds will meet the statutory requirement that the funds be distributed to areas of greatest need.

It is clear that MHFA, in developing its proposal for distribution of its NSP funds, has failed to base its decisions on the factors required by the statute and regulations and has instead relied on factors which tend to obviate the federal "greatest need" requirement.

In effect, the MHFA has adopted a "slightly above average need" allocation formula rather than directing funds to areas of "greatest need" as required by federal law.

a.) Intentional diversion of funds from areas of greatest need

The first step in the MHFA's distribution plan is to rank zip codes by a weighted average of the statutory factors set out in the the statute (rate of foreclosures, subprime loans, defaults) compared to the weighted average for the state as a whole. The MHFA then includes in the priority area calculation 120 zip codes which have weighted average rates of problems which need be only slightly higher than then state average. (125% of state average)

Thus the MHFA's analysis starts by considering appropriate factors, but discarding the notion of "greatest need." The distribution calculation effectively allocates state NSP funds to each of these areas, many of which cannot reasonably be characterized as having the "greatest need."

The MHFA is quite open about this. The application states that the 120 zip codes were chosen in part on two factors that are not simply irrelevant to, but actually contradict the "greatest need" requirement: 1.) assuring that at least 50% of the state's subprime foreclosures are included. This consideration virtually assures dispersion of scarce federal resources away from areas of greatest need, 2.) "Balancing the distribution of funds between the Twin Cities metro area and Greater Minnesota." This consideration is obviously irrelevant to distribution of funds to areas of greatest need.

By replacing the "greatest need" requirement with what amounts to an "above average need," the state has diverted millions from low income minority areas devastated by irresponsible lending practices. There are no neighborhoods similarly affected by the foreclosure crisis outside of the central cities and two adjacent suburbs.

b.) An alternative which does comply with federal law allocates $9 million more to central cities

Attached as Exhibit 1 (not here included on this blog) are two spreadsheets illustrating the result of an allocation procedure which follows the proposed MHFA methodology exactly, except that it limits allocation of state NSP funds to zip codes with at least twice the state average concentration of problem loans (200% of the state average rather than 125%).

The first recreates the MHFA distribution spreadsheet, with the 200% cut-off; the second compares the results of this alternative allocation to that proposed by the MHFA. The result is that funds are allocated to 40 zip codes instead of 120 and an additional $9 million is allocated to the central cities.

Entitlement funds to Greater Minnesota zip codes are also increased substantially, but the competitive funds set aside in the MHFA proposal for Greater Minnesota are reduced so that Greater Minnesota has a net loss of $1.4 million. In addiction, the other competitive pools are reduced by $4.3 million and entitlement funds to metro area suburbs are reduced to $3.2 million.

2.) Failure to affirmatively further fair housing

A relatively few low income, disproportionately minority, neighborhoods have far higher rates of defaulted sub prime mortgages than any other areas of the state. See Exhibit 2 (not included on this blog) maps generated by the Institute on Race and Poverty at the University of Minnesota demonstrating the concentrations of loans held by persons of color, sub prime loans, and foreclosures in these areas.

These neighborhoods, located in the central cities and two suburbs adjacent to North Minneapolis, have been decimated by the widespread displacement of homeowners and by very high concentrations of vacant and untended homes--resulting in blight which quickly spreads to surrounding homes, destruction of the foreclosed property and by vandalism as well as lack of care by overwhelmed servicing agents, and increased opportunities for crime.

There are no other areas of the state which are so dramatically affected by irresponsible subprime lending and the foreclosure crisis and no other areas of the state where the adverse effects fall so disproportionately on minorities. Yet the MHFA has chosen to deliberately divert millinos of NSP funds, intended by Congress to address precisely these problems, to far less needy areas.

This not only runs counter to congressional intent, it violates the state's obligation under both the NSP and the CDBG legislation to act in ways which affirmatively furthers fair housing.

3. A critical clarification is needed.

Conversations with city staff working on this issue suggest that it is critical that MHFA clarify that local government proposals for MHFA funds need to propose to direct the funds to areas of greatest need, but that these areas need not be defined in precisely the way that the MHFA's allocation plan does. The MHFA has chosen to allocate funds based on the concentration of problem loans in zip codes. Needless to say, zip codes are rather blunt instruments which do not precisely track areas of greatest need.

For instance, the MHFA analysis indicates that zip code 55411 in North Minneapolis has the highest concentration of of problem loans in the state. Immediately south of 55411 is 55405, which includes a number of blocks in North Minneapolis with problems identical to those in 55411, but also includes the much more affluent Kentwood area.

It would be absurd to deny Minneapolis the ability to use NSP funds from the state in the North Minneapolis portion of 55405; just as it would be absurd to insist that Minneapolis must spend exactly the $2,482,799 allocated to 55411, no more and no less, in that zip code, rather than in that zip code and in similarly affected adjacent areas.

The MHFA allocation plan is silent on this issue and that silence appears to have many city staff convinced that areas suffering high vacancies as a result of concentrations of problem loans will be ineligible for use of state funds if not located in the zip codes used by the MHFA in allocated funds to specific governmental units.

In conclusion, I am sure you would agree sitting by idle is not going to assure an equitable amount of funding resource. Your voice is needed!

Yours truly,

Jerry Moore, Executive Director JACC

"Imperfect, But I Had No Idea HOW Imperfect"

Jeff Skrenes adds the following to Jerry's letter:

It's been in the papers recently that a whole bunch of federal money is coming to Minnesota to help communities combat the effects of the foreclosure crisis. Roughly $5.5 million will come to the City of Minneapolis and the State of Minnesota will get about $38.5 million. Some of the state money will come to Minneapolis, as well.

The public comment period for teh city money ended this morning. However, applications for the state money are not due until January 17, 2009. In all likelihod, entities such as GMHC (Greater Metropolitan Housing Corporation), Minneapolis CPED, the Home Ownership Center, and the Foreclosure Prevention Funders' Council will probably be the recipients of much of this money.

In my opinion, that's not a problem. My concern is that organizations on the front lines have a say in how that money is used. Specifically, community councils in North Minnepolis neighborhoods hardest hit, our foreclosure prevention counselors and their agencies, ACORN (I know they get a bad rap right now, but frankly who else does grassroots organizing around financial justice issues?) and the Minneapolis Urban League should be heard from as we progress. Collectively, many of these organizations are part of a coalition called the Northside Community Reinvestment Coalition.

Back to the nitty gritty of the money coming to Minnesota: This is where it helps to have two sets of eyes, and you'd be surprised who catches what. I looked at 85 pages of mortgage policy documents regarding these funds and came away thinking that we were in pretty good shape about how things were allocated. That is...until I read the letter (above) from Jerry Moore, Executive Director of our neighboring Jordan Area Community Council.

I know that federal dollars allocated as quickly as these were are often given using an imperfect system, but I had no idea how imperfect. Even so, I saw that North Minneapolis wouldn't have time to really make our voices heard regarding the initial $5.5 million. Instead, we must engage our city officials regarding who applies for the state money and what they want to do with it. And here's our opening:

When entities apply for the state funds, here is part of the application criteria:

"Neighborhood improvement Efforts. Applicants must describe existing or anticipated neighborhood improvement efforts to:

* Encourage commercial development.

* Improve safety.

* Improve schools.

* Develop and improve parks and recreation.

* Improve transportation and streets.

* Improve landscaping, sidewalks, and medians, and

* Engage citizens in neighborhood stabilization.

Take a look at that last line. ENGAGE CITIZENS IN NEIGHBORHOOD STABILIZATION. That is EXACTLY what the community councils are doing, as well as ACORN, NCRC, and others. I am not sure if it makes sense for any of us to go after this money, (though). I wouldn't discourage it, but I doubt I have the time or ability to get a viable application of this nature done by January. Instead, I think it's better for us to engage the city and others regarding what money is applied for and how it may be used.

I spoke with a city official last week about this tactic. Her initial response was that there probably wouldn't be enough time to get a huge community meeting together and then take that input and really incorporate it into the application process. I honestly don't think she was trying to get out of it; time is really of the essence, here.

So my response was that the staff of the community councils does a pretty good job understanding, articulating, and representing those community needs. And even the chance for a meeting between her department and various neighborhood staff with a chance to have an impact on the outcome would be more than we typically get.

Her response: "Set it up and I'll be there."

So where do we go from here? People who want to have input should contact Jerry Moore at Jordan Area Community Council or Jeff Skrenes at teh Hawthorne Neighborhood Council. The two of us, along with others that join along the way, will be meeting with the city shortly. We want neighborhood input and ideas that we can bring forward. Based on the criteria set forth by the state, THE CITY NEEDS OUR INPUT TO MAXIMIZE THE NECESSARY DOLLARS COMING OUR WAY!

And they are open to our ideas. But time is short. Contact us, and we'll make your voices heard!

FOR JORDAN, CALL THE JORDAN AREA COMMUNITY COUNCIL at 612-886-3202 (Jerry Moore, Executive Director)

or his cell phone at 952-210-1086.

ADDENDUM: Emails for these guys, which are much more convenient than phone calls, are as follows:,

I was also told by Mark Ireland, an attorney who has worked for Hawthorne on predatory lending issues, that The Housing Preservation Project sent a letter similar to the one written by Jerry Moore, and Ireland will make an attempt to obtain a copy and forward it.