Sen. Katie Sieben (DFL-Cottage Grove), Sen. Ron Latz (DFL-St. Louis Park) and Sen. Scott Dibble (DFL-Minneapolis) on Thursday will introduce legislation to assist responsible homeowners feeling the negative effects of the national mortgage crisis. The package of bills, called the “Supporting Responsible Homeowners and Stabilizing Neighborhoods Act”, was introduced in the House on Monday.
Sen. Latz will introduce the overarching legislation to expand refinancing options for homeowners, prevent needless foreclosures and ensure greater transparency from lending institutions. Senators Dibble and Sieben will be co-authors of the legislation.
Sen. Latz will also carry a bill that requires lenders to notify borrowers of all loan modification programs before starting the foreclosure process.
“Although Minnesota’s economy is improving, we still the need to protect our middle class families from the practices that brought about this mortgage crisis,” Sen. Latz said. “We need to ensure that we have the right policies in place so that Minnesota families and our communities won’t have to face housing challenges of this sort in the future.”
A recent report from the Minnesota Homeownership Center showed that Minnesota has the 17th highest foreclosure rate with over 21,000 foreclosures in 2011. That number is down from 2010 but is still three times higher than 2005 rates.
“Minnesota is still struggling from the foreclosure crisis, and in some communities, it’s still severe,” Sen. Sieben said. “We need to provide help for the homeowners who have been responsible in paying their mortgages but are under water, and for those who have been struggling to make payments because of unemployment or other challenges and need assistance so they can afford to stay in their homes. This legislation provides the tools to help individual Minnesotans and our communities as a whole.”
The loan modification provision Sen. Latz will introduce includes government-sponsored programs as well as lenders’ own programs. If a borrower applies for a loan modification, the mortgage holder must make a determination within 30 days.
Other provisions of the “Responsible Homeowners and Stabilizing Communities Act”:
• Refinancing for underwater mortgages,
• Temporary help for unemployed homeowners,
• Lender response to short sale requests requirement,
• No dual tracking, and
• No fees for services not performed
“It’s been a long, uphill climb since the market bottomed out in 2008,” Sen. Dibble said. “But this legislative package will go along way to put our economy on more solid footing and to safeguard Minnesotans who have worked hard to hold on to their homes. And, it will help protect our communities and our neighborhoods against vacant properties that are ripe for crime and vandalism.”