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Community Unites to Stem Foreclosures

Twin Cities Daily Planet, News Report, Cass Sanford Posted: Aug 11, 2008

MINNEAPOLIS With foreclosures in the Minneapolis area averaging almost 3000 a year for the last year and a half, a community has mounted an effort to create more favorable conditions for the beleaguered home-buyer.

Nonprofits in North Minneapolis, hit hard by foreclosures, have banded together to monitor banking practices and make sure people have access to credit, loans and banking services.

The Northside Community Reinvestment Coalition (NCRC) was created this year to help the community in their quest for housing. NCRC is a coalition of existing groups that are involved in the Minneapolis housing crisis (including Habitat for Humanity, Hawthorne Area Community Council, Jewish Community Action, Northside Residents Redevelopment Council, Association of Community Organizations for Reform Now). NCRC hopes to target the foreclosure issue at its root, by monitoring existing banking and lending programs to make sure that they are appropriately serving North Minneapolis.

NCRC brings all of us non-profit organizations together as a group with one common goal. Were sort of a watchdog operation here, said Maureen Wilson of the Northside Residents Redevelopment Council.

NCRC has already met with Greater Metropolitan Housing Corporation (GMHC pronounced gimmick) to discuss working with them on GMHCs Sustainable Home Ownership Program (SHOP). GMHC is a business-sponsored, non-profit program aimed at providing affordable housing for low-income residents in the metropolitan area.

SHOP is a three-year program that would provide low interest mortgage loans, affordable housing and debt counseling to North Minneapolis residents who do not qualify for traditional loans (including foreclosure victims). GHMC owns property in North Minneapolis, some of which it has rehabbed, that it will offer to residents who qualify for the SHOP Program. At the end of the three years, GHMC hopes that their participants will be able to qualify for traditional mortgages and loans from regular banks.
NCRC and GMHC have met and are discussing how and whether they can collaborate on the SHOP Program.

Right now were very happy with the program, said Wilson, but one of the biggest issues that we will be bringing to GMHC is Who are you targeting? In reviewing the SHOP Program, NCRCs first priority is whether or not the program actually applies to the North Minneapolis community.
If GMHC really wants to get help to people whove been hit by the foreclosure crisis, well, this program might not work, but were certainly willing to work with them on it, said Jeff Skrenes, housing director for Hawthorne Area Community Council, a member of NCRC.

One of NCRCs main concerns is that GMHCs low-income initiative isnt low enough to properly serve the community. Jeff Skrenes estimates that the average income of someone going through home foreclosure is $30,000 to $40,000. The North Minneapolis houses in the program will be in the price range of $125,000 to $150,000. According to Skrenes, the qualified buyer of these homes would need an average income of upper $30,000 to $50,000. Although this does not match the income of some North Minneapolis residents, says Skrenes, it may be the best price GMHC has to offer.

Another concerns is that GMHC plans to work with Anoka-based credit counselors for their program. NCRC has suggested that GMHC work with Northside-based agencies in order to keep the program community-oriented and redistribute funds within the Northside area.

If NCRC gives GMHC the stamp of approval and they agree to work together, Jewish Community Action (JCA), a member of NCRC, has agreed to raise $5 million in deposits for Franklin Bank, a Sunrise Community Bank. The deposits raised by JCA will then be used to fund GMHCs program.

The source of funds for GMHCs SHOP Program are Franklin Banks Socially Responsible deposit funds. This is an initiative to ensure Franklin customers that their deposits are being used to reinvest and provides loan and support for programs in the community.

This issue is as diverse as each individual, said Dorothy Bridges, CEO and President of Franklin bank, of the foreclosure crisis, Its our hope that through [GMHCs] program, these people can get back on their feet and one day qualify to be a regular customer of Franklin bank.

Its all about building relationships and allying with other community groups, said David Snyder, community organizer of JCA.

Related Articles:

Mortgage Meltdown Goes from Bad to Worse

Philly Sheriff Stops Enforcing Foreclosure Notices

Housing Foreclosures Close in on Hispanic Community

Foreclosures Spark Community Demands for Answers on Lending Practices

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