The recent headlines describe the federal government’s $700 bailout of Fannie Mae, Freddie Mac, and the banking industry to bring some stability to an economic crisis. The bailout is an attempt by the Federal government to deal with a serious problem that is affecting every household in America. Early signs of economic trouble showed up this past year in the housing industry in Minnesota and all across the country.
Home foreclosure will increase 39% this year statewide, and one out of every 31 Minnesota households will have experienced foreclosure between 2005 and the end of this year.
The Minnesota Senate, last session, passed a number of bills to deal with this issue. The measures were designed to help families facing foreclosure by connecting them with foreclosure prevention counselors. The bill also required a postponement of a sheriff’s sale if the sheriff’s office had not received a response from an owner within 7 days of a sheriff’s request. Other bills expedited the foreclosure process for abandoned properties which can become a nuisance to neighbors and communities with lack of upkeep, drug and illegal activities, theft of copper and other salvageable materials.
The Minnesota Sub-prime Borrower Relief Act was another attempt to deal with the housing crisis. This piece of legislation would have allowed eligible homeowners to defer a pending foreclosure for up to a year if their lender refused to negotiate in good faith, while still holding the homeowner responsible for full payment after the deferment. Unfortunately, this bill was vetoed by the Governor.
It is interesting to hear what the presidential candidates are saying about the economy. It has become a national crisis that will set the agenda for the Minnesota legislature this coming session. While no one could have foreseen the downward spiral we are experiencing now, the Minnesota Senate introduced several initiatives to try to get ahead of this problem.