FORECLOSURES

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					  WHAT LOCAL GOVERNMENT CAN DO TO ADDRESS


FORECLOSURES
                 Foreclosure Prevention and Education
Early Outreach to Foreclosure Impacted Households: Partner with the Minnesota Home Ownership Center to
implement a Foreclosure Prevention Education Campaign, including hosting borrower’s workshops for consumers,
inserting foreclosure prevention information in tax statements and utility bills, encouraging agencies encountering
consumers in crisis to have their agency staff attend a Foreclosure Prevention Training and to sign up for the Home
Ownership Center’s listserve. For more information on workshops contact the Minnesota Home Ownership Center at 651-
659-9336 or http://www.hocmn.org/

Actively Provide Local Referrals: Refer homeowners and renters to
                                                                              How Cities Are Communicating
trusted local and regional foreclosure prevention and credit counseling         About Local Foreclosures
organizations.
                                                                             •   Post foreclosure information on city website
Reach Out To Local Renters in Foreclosed Units: Partner with                 •   Insert information in utility bills
HOME Line, Legal Aid, and Southern Minnesota Regional Legal
Services (SMRLS) on their outreach campaign to renters. Direct               •   Host a foreclosure educational workshop
renters to these organizations to receive free legal advice about their      •   Provide counselors at city hall once a week
rights and options during foreclosure. For example, HOME Line at 1-
866-866-3546 (or see http://www.homelinemn.org and see Minnesota             •   Use door to door outreach techniques
Attorney Generals Office for rights and duties of landlords and              •   Use local media: cable TV and newspapers
tenants at http://www.ag.state.mn.us/Consumer/housing/lt/default.asp )
                                                                             •   Work with local community and faith
Provide Helpful Literature and Web Links: Distribute materials                   organizations to expand outreach in targeted
through city departments, utilities, and local non-profits, and provide          areas.
links on your city web site to trusted foreclosure prevention counseling
resources such as Minnesota Home Ownership Center, HOMELine                  •   Designate city staff and neighborhood leaders as
tenant hotline at (866) 866-3546, the Attorney General’s Office, and             foreclosure information coordinators.
lawhelpmn.org about the availability of services and other resources to
assist home owners and renters.1.

Promote “Don’t Borrow Trouble” Consumer Education: Don’t
Borrow Trouble is a public education initiative that seeks to educate families and individuals about how to avoid predatory
lending scams. The Don't Borrow Trouble help line has been established at 612-312-2020 to offer families a safe place to call
before they sign anything that puts their home at risk (http://www.dontborrowtroublemn.org/01.htm.)

Foster Pre-Purchase Counseling for New Homebuyers: Partner with the Minnesota Home Ownership Center and its
member agency in your area to implement a communications strategy that encourages prospective homes owners to attend
pre-purchase training2 or seek assistance from a trusted advisor before signing any documents related to their homes.

Increase Access to Affordable Financing: Publicize lending tools that may assist home owners in distress, including
home repair funds.




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               City Management Of Vacant Properties
Revise Rental Licensing and Housing Codes: Re-examine rental licensing programs and housing codes and revise or
add to where needed to prevent lack of deferred maintenance and the lack of safety and security of affected housing stock.
Effective ordinances include Point of Sale Code Compliance
ordinances, Public Nuisance Abatement ordinances, Long Grass                    Implement Ordinances to
Ordinances, etc. 3 If your city does not license rental properties,
consider licensing as a method of tracking changes in use from               Address Foreclosure Impacts
ownership to rental and inspecting rental building conditions.
                                                                            • Point Of Sale Code Compliance Ordinance
Step Up the Use Legal Remedies: Enforce administrative code and
use legal remedies. See list of helpful city ordinances to the right. Legal • Vacant Building Registration
remedies can include, for example, tenant remedies actions and
                                                                            • Public Nuisance Abatement (removal of
nuisance actions which can be brought by a local government, a local
community group, a tenant, or other concerned parties.                         junk cars, garbage, building materials)
Track Your City’s Foreclosures and Sub-Prime Loan                         •   Long Grass Ordinance
Concentrations: Track existing foreclosures and use external and
internal data resources (such as city early warning systems4 and the      •   Recoup Vacant Property Monitoring and
Federal Reserve data on sub-prime loan concentrations5) in a                  Board Up Costs
coordinated city/county-wide manner to predict future distressed
homeowners and manage vacancies. For example, some cities tag homes       •   Recoup Costs Of Excessive Use Of
that appear vacant or have not paid their monthly water bill and leave        Services
information requesting the homeowner contact the city within several
days – if no contact is made, the city turns off the water to the
property6.
Track Vacant Properties: Employ a vacant and/or boarded property registry and ask community residents to report
vacant properties immediately.
Educate Landlords: Educate landlords on obligations under city ordinances and state laws regarding property
maintenance, rental licensing.
Creative Board Ups: In areas where board-ups are rampant consider
use innovative boarding techniques, such as artistic board-ups             Coordinate Early Warning Data on
                                                                           Foreclosures and Sub-Prime Loans
Acquisition, Rehabilitation &                                             to Target Outreach and Remediation
                                                                                         Efforts
Neighborhood Recovery                                                     •   Track Utility Billing (Late Payers) And Usage
Target Public Funding and Financing Tools: Publicize financing
tools that may assist new home owners to acquire and rehabilitate             To I.D. Vacant Homes and Prevent Water
foreclosed properties. Examples include a The City Living Program in          Damage
St Paul7 , Northside Home Fund in Minneapolis 8, City Advantage in
                                                                          •   Track City Inspection And Enforcement Reports
Minneapolis9, HUD 203(k) loans10, Minnesota Housing’s CASA11 and
Fix-up Fund, 12 and use of local HRA levy dollars in key areas.           •   Monitor Federal Reserve Data On Sub Prime
Develop New Strategic Partnerships: Build partnerships with for-              Loan Concentrations By Local Zip Code
profit and non-profit redevelopers, lenders, realtors and other           •   Monitor County Sheriff Data To Track Street
community based organizations that focus on the recovery of specific
targeted geographic areas of your community.13                                Address Level Foreclosure Locations

Explore Bulk Purchasing Strategies with Local Developers and              •   Monitor State Foreclosure Reports At GMHF
Lenders: Partner with local non-profit and for-profit developers to           And Housing Link Web Sites
negotiate bulk purchase of properties from lenders to proactively
                                                                          •   Monitor Values Through County Assessor Data
revitalize affected neighborhoods and prevent foreclosed homes from
falling into the hands of unscrupulous speculators.                           and Property Tax Records
                                                                          •   Monitor Police Reports to I.D. Problem
                                                                              Properties
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WHAT LOCAL GOVERNMENT CAN DO TO ADDRESS


FORECLOSURES
More Detail on Foreclosure Recovery Strategies and Resources
1
  HELP FOR RENTERS IN FORECLOSED APARTMENTS: For a copy of a fact sheet on how to deal with a foreclosed rental property as a
tenant, please see: When Your Landlord Loses The Building: Mortgage Foreclosure see: http://www.lawhelp.org/documents/4121H-
14%20When%20Your%20Landlord%20Loses%20the%20Building.pdf?stateabbrev=/MN/

2
  HOME OWNER EDUCATION AND FORECLOSURE COUNSELING: For more information on foreclosure prevention related
homeowner education see http://www.hocmn.org/map.cfm?pageID=5.

3
 POINT OF SALE CODE ENFORCEMENT ORDINANCES: For information on Point of Sale Code Compliance Ordinances, see this
example from the City of Richfield: “Point of Sale code Compliance” brochure:
http://www.ci.richfield.mn.us/Police/Inspections/PointofSaleBrochure.pdf

4
  EARLY WARNING SYSTEMS FOR FORECLOSURES: For more information on the use of early warning systems for cities experiencing
increasing foreclosures contact Kellie Jones at the City of Minneapolis at 612- 673-3506 or Kellie.Jones@ci.minneapolis.mn.us.

5
 SUB PRIME LOAN CONCENTRATIONS – WHERE FUTURE FORECLOSURES ARE MOST LIKELY: To obtain data on Sub-Prime
Loan Concentrations by Zip Code from the Federal Reserve contact Michael Grover at 612-204-5172 or michael.grover@mpls.frb.org.

6
 HOW ONE COUNTY IS RESPONDING TO FORECLOSURES: For examples of how counties can respond to foreclosures, see: Hennepin
County Foreclosure Task Force Report:
http://www.co.hennepin.mn.us/images/HCInternet/YCG/Newsroom/Files%20PA/mortgage_closure_web.pdf

7
  HOME PURCHASE LOAN PROGRAM EXAMPLE: For more information on Saint Paul’s CityLiving Home Program designed to assist
homebuyers with purchase and rehabilitation of homes, see http://www.stpaul.gov/index.asp?NID=2350

8
  STRATEGIC NEIGHBORHOOD REMEDIATION FUND EXAMPLE: For more information on the Northside Home Fund which is
designed to foster redevelopment of vacant and boarded homes, and seeks to leverage additional investment and enforcement tools needed to
improve surrounding properties. The focus is on small geographic redevelopment areas, or “clusters”, intended to make a noticeably positive
impact on foreclosure impacts, improve the area’s housing stock and to stabilize and strengthen the homeownership market. Contact Jill Kiener at
jill.kiener@ci.minneapolis.mn.us and review http://www.ci.minneapolis.mn.us/cped/docs/nhf_brochure.pdf.

9
 FORGIVEALBLE DOWNPAYMENT LOANS: For more information on Minneapolis Advantage Home Loan Program (for targeted
neighborhoods), which offers a $10,000 zero-percent interest rate loan that is forgivable over five years to anyone buying a home in which they
will live in these eligible neighborhoods (PDF). Loan Program Guidelines are available at:
http://www.ci.minneapolis.mn.us/cped/docs/Final_Mpls_Advantage_Guidelines.pdf
Also see: http://www.ci.minneapolis.mn.us/cped/minneapolisadvantage_home.asp

10
     HUD HOME LOANS.For more information on HUD loans, see http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm

11
   FIRST TIME HOMEBUYER LOAN PROGRAMS: For more information on Affordable Mortgages for First-Time Homebuyers through
Minnesota Housing’s Community Activity Set Aside (CASA) Loan Program for first time homebuyers that helps low to moderate income
Minnesotans buy a home. The affordable, low, fixed interest rates for up to 40 years are available to eligible homebuyers through lenders
participating in initiatives in several communities around the state. Homebuyer education is required for all borrowers receiving a CASA loan.
see http://www.mnhousing.gov/consumers/home-buyers/loans/MHFA_000469.aspx Also see Minnesota Housing’s downpayment and closing
cost loans through the Homeownership Assistance Fund (HAF) which provides the opportunity for eligible targeted borrowers who qualify for an
interest-free, deferred loan to help with downpayment and closing costs. See: http://www.mnhousing.gov/consumers/home-
buyers/loans/MHFA_003407.aspx

12
   MINNESOTA HOUSING’S FIX UP FUND PROGRAM: For more information on Minnesota Housing’s Fix-up Fund, see
http://www.mnhousing.gov/consumers/home-owners/HomeImprovementLoans/index.aspx

13
   NORTHSIDE HOME FUND – STRATEGIC CLUSTER REDEVELOPMENT PROGRAM:
http://www.ci.minneapolis.mn.us/cped/docs/nhf_brochure.pdf

This document was prepared by: Minnesota Foreclosure Prevention Council, Greater Minnesota Housing Fund, http://www.gmhf.com




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