Sunday, January 24, 2010

JN-SPAN Continued: Congressional Hearing on Foreclosures in the Twin Cities

Guest post and videos by the Hawthorne Hawkman.

We continue with footage from the Congressional Field Hearing on the impact of the foreclosure crisis on public and affordable housing in the Twin Cities (the official name of that event). Pictured above is Housing Preservation Project attorney Mark Ireland. Mr. Ireland did a phenomenal job representing Hawthorne in our lawsuit against Citimorgage in the EcoVillage.

I really wish the federal government would come up with a spiffier name for this hearing, or at least a slick acronym, but what can you do?

I applaud Mark Ireland's speech because at about the 3:10 mark he gets very gutsy...

In a very straightforward way, Ireland states that we haven't fully discussed the issue of race in the foreclosure crisis. "In every study that I've seen," he says, "the disproportionate impact of the economic crisis, the foreclosure crisis, on renters, on homeowners, has been on communities of color and people of color." So as we develop solutions to these crises, we must talk about race. Thanks, Mark, for putting that out there.

Easily the most moving panelist of the entire event was Marion Anderson, a north Minneapolis resident whose landlord went through foreclosure. The panelists were all told to keep their remarks to five minutes or less, although many went over by a minute or two before being cut off. Mr. Anderson went on for almost twice that length, but his story was so compelling that Rep. Maxine Waters, the chair, told him to keep on talking until he was finished. My summary below will surely not do Mr. Anderson justice, so I strongly recommend that you take ten minutes to watch the video and listen to what he has experienced.

His landlord went into foreclosure in August of 2008. About two months AFTER the August '08 sheriff sale, Mr. Anderson began to rent the unit. The landlord also declared bankruptcy, which may have lengthened the foreclosure process. He did not find out that anything was amiss until February of 2009. That's when the landlord started taking appliances out of the property, starting with the washers and dryers. Then the utility shut-off notices started to come, even though in the lease the utilities were paid for by the landlord.

OF COURSE the landlord still wanted to collect the rent, but the tenants organized and contacted the utility companies to pay them instead. On April 15, the FIRST legal day to do so, the landlord manually shut off the furnace. Then he tried to evict the tenants for non-payment of rent. The landlord disappeared from the scene entirely, but around October 15, the Minneapolis Fire Department (which oversees mult-unit housing) informed the tenants they had 72 hours to get the heat turned on or the building would be condemned and they'd be forced out. There was also no rental license anymore.

The Fire Department worked with the tenants to contact Center Point and get the furnace turned back on, and Legal Aid of Minneapolis helped out too. But then the vacant units became occupied by squatters. The squatters didn't want to contribute to the utility payments, but they did want to contribute to the condemnation of the building by using meth. There is a new owner, and it looks like things will be resolved in the good tenants' favor.

Mr. Anderson and his neighbors are the lucky ones. Countless others experience similar difficulties and wind up homeless.

In a question and answer session later, Rep. Ellison asked whether Mr. Anderson was ever told directly that the building was in foreclosure.

Of course, the answer was "no." And there's the big problem. There are all sorts of protections out there for renters whose landlord is in foreclosure, but if nobody makes them aware of the situation and the resources, those people will fall through the cracks. Any suggestions about how to deal with this are more than welcome. But enforcing such disclosures from landlords to tenants is almost impossible.

Mark Ireland was also asked about his comments regarding racial justice:

He referenced a structure laid out in Dr. Martin Luther King's last book. That structure involves identifying where we are at right now, asserting vigorously the dignity and worth of all people, then you identify the structural impediments to moving forward, and then you "fight like hell."


1915bung said...

Great posts!

Can you give us a list of Board representatives and possibly post contacts for these individuals so that your readers can send input?

Anonymous said...

In regards to the issue of tenants not being notified of foreclosure - it seems a fairly simple way to do this is to have it done by the county at the time the mortgage company files foreclosure action in that county courtroom department.

Of course there is staff and time/money associated, so tack those fees on to the filing fee, make it a requirement for ALL properties to get a standard notice to each mailing address at that property that says "Notice to occupants, this property is going into foreclosure, contact here and here and there for more info".

Richard A. said...

Thanks for bring these forms to our city we appreciaste the timely information of services and programs to assist people going into forclosure. The geust spoke well to the crisis and solutions which they believe could assist them and some whci have assisted them. Thanks Kieth and Maxine we love you both
Richard A

Anonymous said...

As someone who does foreclosures, I don't understand how tentants can not be served. A (relatively) short but mind numbing summary of the foreclosure process follows.

It is a statutory requirement that any occupant of the property (whether owner, renter or squatter) be served with the same notice of foreclosure as the owner of the property. OK, I grant you that a squatter would be hard to serve because he/she would likely bail out the back window, but in the event they answered the door, they would receive the same service of process as anyone with a legal right to be on the property.

Occupants also get a variety of notices, including a tenants' rights notice, a homestead designation notice and help for homeowners in foreclosure notice. Service of process on the occupant of the property must be personal service i.e. hand delivery. Service of process must be completed at least 4 weeks prior to the sheriff's sale date.

If the property is vacant, then the notice is supposed to be posted on the property in a conspicuous location (i.e. the front door).

In addition, a notice of pendency needs to be filed in property records to put any possible purchaser of the property on notice that a foreclosure is in process.

On top of that, anyone with a recorded lien on the property must be mailed a copy of the notice. This also must be completed 4 weeks prior to the sheriff's sale date.

AND the notice must be published in a local newspaper once per week for 6 weeks. Granted, Joe Homeowner isn't likely to read the foreclosure notices, but the requirement is there and must be complied with.

Affidavits of service attesting that all of these things have been done must be submitted to the sheriff at the time the sale is held.

If occupants (of any description) of the property are not served with the notice of foreclosure, the foreclosure is invalid for failure to meet statutory requirements. Granted, someone needs to sue, but that's the way the judicial system works.

Many years ago I saw the result of a foreclosure that failed statutory requirements which resulted in a lawsuit. The court declared the sheriff's sale (foreclosure) invalid.

I'm just sayin'


The Hawthorne Hawkman said...

@ AKL - I hear where you're coming from and I just want to say that while there are plenty of ways to notify a tenant, I've heard of just as many attempts by landlords to try and thwart that notification. Even to the point of going and taking mail out of the tenants' mailboxes (which is of course a crime in and of itself).

There's also no way of knowing for sure whether certain kinds of notifications were sent out (I don't expect most renters to be reading the foreclosure section of Finance & Commerce) and simply ignored by the tenants.

But anecdotally I hear the refrain "We didn't know!" quite often - and frequently enough that I'm not yet convinced we're doing everything we can to notify tenants that their landlord is in foreclosure.

Anonymous said...

@Hawthorne Hawkman

I will grant that I am much more skeptical on this issue than you, but we may be more or less on the same side here.

I think it is fair to ask whether there has been any follow up to verify the truth of claims by tenants that they did not receive notice. If true, we are basically discussing "foreclosure fraud." Depending on who is responsible, and where it is happening, and to whom, there may be professional ethics, civil rights and possibly criminal implications.

Minn. Stat. 580.03 states in part, "a copy of such notice shall be served in like manner as a summons in a civil action in the district court upon the person in possession of the mortgaged premises, if the same are actually occupied." Providing proper notice to the occupant (tenant) of a property carries the same weight and obligation and must be done in the same way (hand delivery) as service of a summons and compliant.

If tenants are "served" with the foreclosure notice by merely mailing it, that's illegal. If the landlord steals the notice out of the mailbox, that's also illegal, but it's on top of the illegal act of mailing the notice in the first place.

Beyond that, most people have only a general idea of how the foreclosure process works. People can't effectively discuss how to fix the system unless they understand it, so I provided a fly by tour. People are often unaware of the mortgage company's many obligations.

I'm going to stop now while JNS may still have a reader or two this side of a coma.