Greater Minnesota
Foreclosure Crisis
Foreclosure Crisis
in Greater Minnesota Destabilizes Families and Harms
Local Communities
Data recently collected shows that some communities in greater Minnesota
are experiencing alarmingly high foreclosure rates. The results are
shocking -- with foreclosures doubling from 2,700 in 2005 to approximately
4,168 in 2006.
These figures
are
double
the frequently-cited national estimates for Minnesota provided by Realty
Trac, the leading source of foreclosure data. This foreclosure crisis
shows no signs of abating - by the end of 2007, foreclosure rates are
projected to increase 109% over 2006. At this rate, between 2005 and
2007 nearly 15,000 families in greater Minnesota will lose their homes
to foreclosure. Download
both Greater Minnesota Housing Fund foreclosure report studies
(July, 2007 & October, 2007) Foreclosures in Greater Minnesota: A Report
Based
on County Sheriff’s Sale Data (.pdf)
In greater Minnesota, the foreclosure problem is most severe in the collar counties immediately outside the metro area, especially north of St. Paul. For example, projections for 2007 indicate that 3 of every 100 households in Chisago and Isanti Counties will be in foreclosure this year. The scale of greater Minnesota’s foreclosure problem - and the enormous negative impacts on families and communities - makes foreclosure prevention and remediation the most important, timely and challenging housing issue greater Minnesota currently faces. |
Devastating Impacts on At-Risk Families
Losing a home is especially devastating to at-risk families with children.
Foreclosures devastate family finances. Following foreclosure, families
and children are displaced from their neighborhoods, communities and
local schools. Families who used sub-prime or predatory loans – including
many low-income or credit-poor families - are the most vulnerable to
foreclosure, as these loans are now defaulting at the highest rates.
The downstream affects of foreclosures on children are severe. Unstable
housing conditions have been shown to negatively affect child welfare,
school performance, and children’s health and cognitive development.
Foreclosures also affect families with children living in rental units.
Many lower-income families living in investor-owned properties have
no notice that their property is in foreclosure. After reliably paying
rent every month, these families can be forced from their homes with
no notice and few affordable alternatives.
Damage to At-Risk Neighborhoods
Foreclosures also set in place a negative spiral for at-risk neighborhoods.
Blighted and/or abandoned properties can increase neighborhood crime
rates and decrease property values of nearby homes – often the
primary source of equity for low-income and working families. In some
communities in Minnesota, high foreclosure rates are destabilizing
neighborhoods, creating marginal neighborhoods from those that were
previously stable. The impact of this recent foreclosure crisis on
Minnesota’s families, communities and cities is crippling. A
recent congressional report estimates that the combined costs of foreclosures
for all stakeholders combined – families, city and local governments,
lenders and neighboring homeowners – can be as high as $80,000
per home.
In brief, foreclosures:
•
Ruin family finances, creating long term financial hardship that will
take years for the family to overcome.
•
Force families to relocate to less decent, overcrowded housing and causing
some families to fall into homelessness.
•
Create emotional and mental stress that negatively affects family stability,
family health, and school and job performance.
•
Create vacant homes that are often not adequately maintained, cause nearby
property to decline in value, and negatively affects the housing market
for whole neighborhoods.
Learn more from materials
presented at Greater Minnesota Housing Fund's Foreclosure Prevention
Summit ->
|