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09-07-2010 HRA MIN• MEETING OF THE ELK RIVER HOUSING AND REDEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL TUESDAY, SEPTEMBER 7, 2010 Members Present: Chair Wilson, Commissioners Kuester, Lieser, Motin and Toth Members Absent: None Staff Present: Economic Development Director Catherine Mehelich and Economic Development Assistant Annie Deckert 1. Call Meeting To Order Pursuant to due call and notice thereof, thg meeting of the Elk River Housing and Redevelopment Authority was called to order at 5:30 p.m. by Chair Wilson. 2. Consider September 7, 2010 HRA Agenda MOVED BY COMMISSIONER KUESTER AND SECONDED BY COMMISSIONER MOTIN TO APPROVE THE SEPTEMBER 7, 2010 HRA AGENDA AS PRESENTED. MOTION CARRIED 4-0. • 3. Consider Consent Agenda MOVED BY COMMISSIONER MOTIN AND SECONDED BY COMMISSIONER TOTH TO APPROVE THE CONSENT AGENDA AS FOLLOWS: 3.1. AUGUST 2, 2010 HRA REGULAR MEETING MINUTES AS AMENDED (CHANGE "CHAIR STEWART" REFERENCES TO "CHAIR WILSON") 3.2. CHECK REGISTER 3.3. BALANCE SHEET 3.4. REVENUE/EXPENDITURE REPORT MOTION CARRIED 4-0. 4. en Mike - No one appeared for Open Mike. 5. Presentation - Ed Nelson, MN Homeownership Center Regardirr~ "Look Before You Leap" Campaign Ms. Deckert introduced Ed Nelson of the Minnesota Homeownership Center to discuss the "Look Before You Leap" campaign to stop foreclosure prevention scams. • Housing & Redevelopment Authority September 7, 2010 ----------------------------- Page 2 Mr. Nelson explained that the Minnesota Homeownership Center is anon-profit • organization founded in 1993. Their purpose is to promote successful homeownership in Minnesota. They do this byproviding foreclosure prevention programs, pre-purchase counseling and education. In 2009, there were 702 foreclosures in Sherburne County. Of those, 357 households made use of foreclosure counseling services. Foreclosure was prevented for 170 homeowners (49%), and 168 (48%) were not prevented. Mr. Nelson noted that successful foreclosure prevention percentages in Minnesota are among the highest in the country. Mr. Nelson stated that that all of their services are provided free of charge. He explained that there are approximately 50 partners in the program He noted that even if a homeowner is not able to keep their home, theyprovide other services to deal with emotional and economic issues. Mr. Nelson explained that there have already been 465 foreclosures in Sherburne County through the second quarter of 2010. The number of foreclosures has also increased in surrounding counties. If the trend continues, it is estimated the xotal number of forecloses in 2010 will increase 33 percent over 2009. He stated that this number would rival the 2008 numbers, which was a record year. However, theyhave not seen a corresponding increase in number of counseling requests in Sherburne County (180 at mid-year 2010). He stated there are still many households that don't know where to turn. He explained that people hear ads on TV and radio for foreclosure assistance, and thinkthat these are onlyresources available to them. The "Look Before You Leap" program's goals include providing free resources and public education regarding scams. In 2008, there was only one complaint of a foreclosure scam In • the end of 2009, there were approximately 8,000 scams. He expects the number of complaints to be around 50,000 by the end of 2010. A case was reported in Washington County where a homeowner paid a total of $27,000, paying $3,000 month house payments to a scan artist. Mr. Nelson stated that organizations should be checked to see if they are registered with the State of Minnesota and whether or not the organization will receive some type of benefit. He stated that no one in the State of Minnesota can legally charge an upfront fee for foreclosure assistance. Mr. Nelson explained that the scam artists have official sounding names and target distressed homeowners. Mr. Nelson stated homeowners should be on the lookout for organizations that charge upfront fees, askthem to sign over a deed or title, ask to give them power of attorney, or tell the homeowner to stop paying their mortgage. He stated that the homeowner should ask if the organization benefits in anyway from the decisions the homeowner makes. Mr. Nelson stated he encouraged residents to talk to friends and neighbors, and spread the word that foreclosure assistance is available.. He noted that the website address is lookbeforeyouleap.or~. He thanked city staff, stating that they have been wonderful to work with. He noted that there are many homeowners right here in Elk River that are struggling. Chair Wilson asked about qualifications of the organizations that partner with them Mr. Nelson stated that organizations offering foreclosure prevention must have training/certification at both the national and state levels, and must participate in continuing training to staycompletelyup to date. He stated that sometimes dollars are available; and `- there is a verystrong social services network Most counselors are trained with the "soft:" Housing & Redevelopment Authority Page 3 September 7, 2010 ----------------------------- • skills of social workers, as well as the "hard" skills required to read and understand mortgages, documentation, and work with lenders. Chair Wilson asked how a homeowner gets the services they need. Mr. Nelson stated that by contacting them, no matter where the call is from within state of Minnesota, theywill referred to the correct with services they need. Chair Wilson asked if the goal is the keep the home. Mr. Nelson stated not always; that the goal is long-term housing. Sometimes homeowners simply cannot afford the home and it might be best for them to go through foreclosure process, work with their lender on ashort- sell, etc. Chair Wilson asked what about people who have lost value of home and just want to walk away, even though they can afford the payments. Mr. Nelson stated that the MN Homeownership Center will always advise that if they can afford to paytheir mortgage to continue and will never counsel a homeowner to walk away. He noted that most homeowners who make decision to walk away from their mortgage do not come in for their services. Commissioner Koester asked if any of the 168 foreclosures that were prevented are temporary or are they considered "done". Mr. Nelson stated that there are a number of homeowners that were helped in 2007-2008 that are now coming back in 2010. He noted that homeowners can come back as manytimes as theylike. He stated that financial assistance is a "once in a lifetime" event, however, theystill can provide other types of counseling assistance. He explained that the number one driver of homeowners seeking • foreclosure assistance is unemployment or underemployment. Mr. Nelson stated that homeowners can contact the hocmn.or~ website foreclosure services. Commissioner Koester asked Mr. Nelson if has seen much difference in the foreclosures that were prevented and those that were not able to be prevented. Mr. Nelson stated that there are situations which are very complicated, such as when there are multiple liens on a property. He stated in one instance there were 11 liens on a home. Commissioner Motin asked if there are situations where the homeowner is counseled to file bankruptcy but is still able to keep the home. Mr. Nelson stated that this would be a last resort situation. He explained that there can be medical debts other expenses not related to the mortgage. He stated that he would counsel a homeowner with multiple loans that even if they walk away, a junior lien holder can sue them He stated this is a very complex matter, and for most cases, theywill not recommend bankruptcy. Chair Wilson thanked Mr. Nelson for his presentation. 6. CRher Business 6.1. Commissioner Toth asked if the exterior painting has been completed on the 716 and 720 Main Street buildings. Mr. Deckert stated no, that she is still waiting for one more bid 7. Adjourn to Work Session in Upper Town Conference Room to Discuss MN Department of Employment & Economic Development Proposed Demolition Loan Program • There being no other business, C11air Wilson adjourned the meeting. Housing & Redevelopment Authority September 7, 2010 Page 4 The meeting of the Elk River Housing and Redevelopment Authority adjourned at 6:00 p.xn. • Minutes prepared byDebbie Huebner. Tina Allard City Cl k ,~, -- s tewart Wils n Chair, Housing and Redevelopment Authority •