Pawlenty offers new foreclosure help, but with limits

Governor Pawlenty remains opposed to a bill that would buy homeowners facing foreclosure on sub prime loans an extra year to negotiate better terms.

But he announced Monday he's taking steps to make it easier for people to get counseling and go into mediation with their lenders. The steps, all of which can be taken without permission from the legislature, include a new toll-free hotline for persons facing foreclosure.

"The process currently does not lack for process," Pawlenty told reporters, "It lacks for results, and the good results that we're finding coming out of counseling is something that is a success story."

Says no to moratorium

Earlier the housing consumer advocate group known as ACORN staged a demonstration on the Capitol steps urging Pawlenty to support a bill that would put the foreclosure process on hold for a year.

The bill, sponsored by Representative Jim Davnie of Minneapolis and Senator Ellen Anderson of Saint Paul, would apply to those in sub prime mortgages or reverse amortization loans. Those are loans in which the monthly payment at first doesn't cover the entire interest due, so that extra interest is added to the principal.

Backers say, even during the moratorium, the homeowners would continue to make payments to the lenders. They argue that ought to be preferable to the homes sitting empty and being vandalized.

Pawlenty has said he'd veto such a bill if it made it to his desk, and repeated that pledge Monday.

"As to the bill that would freeze for a year foreclosure I'm not supportive of that and won't support that," Pawlenty remarked.

"No other state has done that. It will impact the credit markets in Minnesota in a way that's detrimental to 99 percent of Minnesotans who are NOT in foreclosure." Sitting down at the table

The Governor's also asking banks and other lenders to voluntarily agree to sign a compact with the state, agreeing to work with mortgage debt counseling agencies and take part in voluntary mediation.

"So mediation is a good thing, but you generally want people who WANT to be in mediation."

Pawlenty revealed new efforts through the Department of Commerce and Minnesota Housing to work with lenders and the Minnesota Homeownership Center to find mediators to resolve disputes in cases in which counseling has failed to help enough.

Workshops for Consumers

The Minnesota Home Ownership Center is holding a set of workshops for homeowners headed for foreclosure or already struggling with it. The first four will be:

Tuesday, April 22, 4:30-8:30p.m.

Minneapolis Urban League 2100 Plymouth Avenue North, Minneapolis

Tuesday, May 13, 4:30-8:30p.m.

Anoka County Technical College 1355 West Highway 10, Anoka

Tuesday, May 20, 4:30-8:30p.m.

Buffalo Discovery Center 301 NE Second Avenue, Buffalo

Tuesday, June 5, 4:30-8:30p.m.

Eagan Community Center 1501 Central Parkway, Eagan

Hotlines for Consumers

The Governor announced a new Commerce Department toll free hotline today for consumers:

1-866-462-6466

There's also a new hotline just for debt counselors and mediators to call, which is:

(651)296-2569

By John Croman, KARE 11 News

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