Sunday, January 24, 2010
JN-SPAN: Congressional Field Hearing on Foreclosures and Affordable Housing
Guest post and videos by the Hawthorne Hawkman.
Falling somewhere in between the venerated C-SPAN network and The Onion's "O-SPAN," Johnny Northside brings you extensive footage of Saturday's Congressional hearing in Minneapolis. We'll call it JN-SPAN.
Let's get the dry stuff out of the way first. This was a Committee on Financial Services meeting, an official hearing of the United States House of Representatives. Its title was "The Impact of the Foreclosure Crisis on Public and Affordable Housing in the Twin Cities," and this was the second time Rep. Keith Ellison has brought such a hearing to Minneapolis.
In the video above, NoMi's state Senator Linda Higgins is speaking about a condemned four-plex near her home...
...that was bought by a consortium of developers from North Dakota (state motto: "Flat but boring"). These developers bought approximately 50 properties in north Minneapolis, and in this property's case, failed the inspection for a certificate of occupancy. The developers lied about being certified asbestos removers, and got caught. But their work on the other houses is reportedly just as shoddy. (Hawkman asks: Can we get a name? Is this a new slumlord or one that we're already aware of?)
Rep. Jim Davnie spoke next.
Davnie has been another leader on predatory lending and foreclosure issues affecting Minneapolis and all of Minnesota. He and Senator Higgins have worked together to create or help pass legislation that curbed predatory lending activities, equity stripping, and abuses by landlords. Both houses of Minnesota's legislature also passed a Subprime Borrowers' Relief Act, which would have provided mediation for borrowers with subprime mortgages - if it hadn't been vetoed by Governor Pawlenty.
Up next was Hennepin County Commissioner Gail Dorfman.
Commissioner Dorfman has done great work around foreclosures and vacancies as well, but she references a "14% decline in home values" for north Minneapolis as a result of foreclosures, and that sounds incredibly low. I'd like to see what that number is once it's broken down by neighborhood, if that data is out there. In Hawthorne, I'd bet it's more like 140%. Continuing with numbers, Dorfman states that 55% of foreclosures in Minneapolis are from landlords, and that 10% of the people in homeless shelters in Minneapolis are from these properties.
ADDENDUM: An anonymous commenter on this blog pointed out that in my rebuttal of the inaccurately low percentage of home value decline at least in my area of NoMi, I let hyperbole get in the way of actual mathematics. A 140% decline would mean that the property has a negative value, which only happens in Detroit. Even in the most extreme cases of a fraudulent $300,000 appraised value of a Dream Home, and then a resale in the $30,000 range, the percentage decline would be 90%.
I didn't get video footage of Mr. Dan Bartholomay of the Minnesota Housing Finance Agency. His content contained very detailed mortgage technicalities, so naturally I was taking notes like a madman. Here's the Reader's Digest version of his speech: The Housing Finance Agency does loans geared towards low- and moderate-income households, and their loan portfolio performed significantly better than the market. However, funding has been difficult because subprime mortgages have given the whole secondary market a bad name. Either nobody trusted these mortgage bonds in general, or they didn't trust the information claiming the stability of such an investment. So now thanks to the subprime meltdown, finding access to funds that actually help poor people AND make money on their own is increasingly difficult.
The highlight of the first panel was CPED Director of Housing Policy and Develpment, Tom Streitz. If you watch no other clip from these videos, at the very least jump to the 1:40 mark of this one.
That's when Tom Streitz discusses one of the biggest victories in NoMi's response to the foreclosure crisis: The successful prosecution of the TJ Waconia fraudsters. When Streitz said that they were in federal prison, the room erupted in applause. Let's hope that the principals from Danna D III (who face federal charges) and maybe a few others will join them.
Streitz also gives some common-sense suggestions about how regulations around NSP dollars could be lifted to make our response to the foreclosure crisis even more effective. I have to agree with those comments, and will likely do a commentary about this at a later time.
Whew! That's about all the excitement I think we can handle for a while, but there was a second panel as well. That panel had some very poignant stories, including one from a tenant whose landlord went into foreclosure. Stay tuned to JN-SPAN.