Report Shows Ongoing Economic Impact of Minnesota’s Foreclosure Crisis
Hundreds of Minnesotans join legislators, clergy in highlighting need for commonsense solution to statewide problem
ST. PAUL, February 27 — A new report released today by ISAIAH and other Minnesota-based community organizations highlights the economic and spiritual crisis that foreclosures have had on our communities and families. It was officially released this afternoon in an event on the south steps of the State Capitol where hundreds of concerned Minnesotans joined state legislators and leaders of various faith traditions to discuss the devastating impact.
State Senator Patricia Torres Ray and State Representatives John Lesch and Mike Freiberg addressed the crowd, giving an update on the “Homeowners’ Bill of Rights,” comprehensive foreclosure legislation currently being considered in the Legislature.
“Minnesotans are still reeling from the effects of the Great Recession, which brought record rates of unemployment and foreclosures and blew holes in the state budgets nationwide,” the report states. “While it was Wall Street’s toxic lending practices and recklessness that created the economic crisis, it is Minnesota homeowners and taxpayers who are still paying the price.”
The report’s introduction continues, “The big banks that caused this crisis have not done enough to fix it. Instead, they exacerbated it with ‘unsafe and unsound’ mortgage servicing and foreclosure practices that led to countless unfair and unnecessary foreclosures.”
“These multinational banks gambled recklessly with our loans in the global marketplace, ruined our entire economy, and then were bailed out of their own well-deserved bankruptcies with our tax money because they were ‘too big to fail,’” said Rev. Jin S. Kim of the Church of All Nations. “Since we bailed them out, they need to be accountable to us the taxpayers and do the right thing.”
“The crisis has devastated rural Minnesota,” said Sarah Larson, a Waverly homeowner and small business owner. “In Waverly, 20 percent of the homes have been foreclosed on—destabilizing communities and uprooting families. We have all been impacted by the housing crash.”
Some of the data included in the report shows the impact of foreclosures by the numbers:
- Foreclosures from 2008-2012: 141,239
- Lost home value from 2008-2012: $20.7 billion
- Cost to local governments in 2008-2012: $1.5 billion
- Children affected by foreclosure: 94,000
- Underwater homeowners in Minnesota: 100,000
The report release occurs on the third day of the Unlock Our Future Week of Action.