The home foreclosure explosion that caused the Great Recession caused a tidal wave that reached far into the communities of Minnesota.
According to a new report released by a group of grassroots social justice organizations that back foreclosure legislation and reform, foreclosure took quite the toll in Minnesota.
In Hennepin County alone, the report says the home value decline is due to over 50,000 foreclosures in a four year period that totaled over $8 billion. The total value loss of homes in the proximity of foreclosed home exceeded that of the foreclosed homes by a 2 to 1 margin.
Furthermore, the cost that taxpayers had to pay and the lost tax revenue associated with the crisis cost over $500 million.
It is rather astounding that those numbers are for a single county, which explains why the $26 billion settlement between 49 state attorneys general and five large mortgage companies was said to be inadequate.
The report says that the foreclosure levels in 2013 are still around three times higher than they were in 2008. This is why the Jewish Community Action, ISAIAH, and Minnesotans For A Fair Economy has renewed its momentum toward state action to help homeowners stay out of foreclosure when they are not able to catch up on their mortgage payments. The centerpiece of the bill is a requirement for the mediators and the lenders to meet face-to-face before a foreclosure can move forward.
It is expected that legislators will hear from the banking industry in opposition to such a law. However, it is said that a mediation requirement before a foreclosure can proceed has precedent in Minnesota. The precedent was set by the farm crisis in the mid 1980s when face-to-face mediation helped keep hundreds of farmers in business. The measure in 1986 has roots in a two-year foreclosure moratorium that was put into law in 1933 by Governor Floyd B. Olson.
As for the state’s response to those crises, faith was renewed in the state government. This year’s legislature may have the opportunity to receive the same response, renewing the faith of Minnesotans in the state government because of how they responded to the Great Recession.