Foreclosure crisis is not easing in north Minneapolis

There will be 1,500 foreclosures this year in Hawthorne and Jordan compared to about 700 last year, predicts Elizabeth Ryan, who chairs the group created by Minneapolis officials to try prevent foreclosures.

Prevention is the smartest strategy, she says. People falling behind on mortgage payments should call their lender. Sometimes the lenders show forbearance and cut homeowners some slack.

"The best dollar spent is to try prevent these foreclosures wherever possible, to not refinance where additional fees are required of the homeowner but to restructure to restate the terms of the mortgage," Ryan says.

Minneapolis homeowners worried about foreclosure should call the city's 311 number, Ryan says. They'll be directed to one of seven counselors. Across Minnesota there are about two dozen foreclosure counselors taking calls, and officials say they are swamped.

That's the case in the Jordon neighborhood in north Minneapolis, where Jerry Moore, the executive director of the Jordan Area Community Council says lots of people are worried they'll lose their homes to foreclosure.

"We don't have enough trained counselors to do this work," he says.

Earlier this summer state and local officials stood on the porch of the north Minneapolis house which serves as the Jordan neighborhood organization office. Some of the help the officials promised - mortgage prevention counselors and a $10 million loan fund - has materialized.

However the agencies are not able to supply numbers showing how many foreclosures have actually been prevented.

Same for the loan fund.

The $10 million will be used to buy foreclosed properties in north Minneapolis. But few if any properties have been purchased.

In nearby Hawthorne, Jeff Skrenes directs the neighborhood's efforts to deal with the foreclosure crisis. He has targeted a four block area where only a handful of residents remain. Most of the dozens of homes along a two block stretch are boarded and vacant because of foreclosure.

Many of the houses will be bulldozed to make way for new construction, Skrenes says. A few will be saved. It will take a lot of money and several years to complete, Skrenes says.

"If it costs, say, $200,000 to acquire and build a property, we want to be able to keep it in the price point of the neighborhood and be able to sell it for $150,000."

The mortgage foreclosure crisis is creating some opportunity, too. Foreclosed homes are selling for as little as $40,000 in north Minneapolis. Investors are buying some for rental property. Housing non-profits including the Greater Minneapolis Housing Corporation and Project for Pride in Living are also buying foreclosed properties and rebuilding them.

However the opportunities don't match the hurt the mortgage foreclosure crisis has caused for families and neighborhoods.

Amber Hawkins is going after some of those who caused the pain. Hawkins works for the newly created Foreclosure Law Relief Project. She helped write new state laws which try rein in unscrupulous lending. Hawkins and another attorney, using money supplied by the Family Housing Fund are hunting down what they consider bad lenders. She says they haven't figured out a strategy for suing them.

They might take a page from a recent suit filed in Los Angeles which alleges lenders targeted minority neighborhoods, which might qualify as a civil rights violation, and she says that certainly fits the profile of what's happening in Minneapolis neighborhoods.

"The two with the highest concentration of people of color are the hardest hit by these foreclosures," she says.

If they sue and win damages their mandate is to direct the money back to neighborhoods scarred by mortgage foreclosures.

The crisis is not over. Even as work begins to address the problem experts predict it will be three, maybe five years before the wave of mortgage foreclosures peaks and begins to subside.

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