In an effort to quell the rate of home foreclosures in the Twin Cities, St. Paul Mayor Chris Coleman hosted a press conference with Minneapolis City Council President Barbara Johnson (Ward 4) and Wells Fargo Minnesota CEO Jon Campbell to present the Homeownership Preservation and Neighborhood Stabilization Project.The project, which will begin in 2010, will offer Twin Cities homeowners and potential homeowners new resources along with efforts of three existing programs including Invest Saint Paul, the Minneapolis Foreclosure Recovery Plan and Wells Fargo’s national Leading the Way Home.
Wells Fargo has agreed to co-host a series of personal foreclosure prevention sessions including loan modification meetings, financial literacy and homebuyers workshops and affordable home tours for the twin cities.
Coleman said St. Paul has done everything in its power to use all tools to combat the effects of the mortgage crisis. This will now include partnering with industry mortgage lenders Wells Fargo to keep families in their homes he said.
“By working with the city to help residents avoid foreclosure and host homeowner workshops for employees of Saint Paul companies, Wells Fargo is making a commitment to help us bring stability to our neighborhoods," Coleman added.
Some neighborhoods that fall under the Invest Saint Paul heading include portions of Dayton’s Bluff, Payne-Phalen, the North End and Thomas Dale (Frogtown).
In 2009 Minneapolis’ 4th and 5th wards were the hardest hit by foreclosures. "Minneapolis continues to provide foreclosure prevention assistance and to pursue aggressive property purchase and rehabilitation strategies to strengthen homeownership and restore healthy housing markets in our neighborhoods most impacted by foreclosure," Johnson said.
Campbell said Wells Fargo decided to co-host and co-brand because they realized that reaching out to families and individuals struggling with mortgages can be a “very emotional” process.
“Unfortunately, many times because of fear, anger or frustration we do not get a chance to speak as directly to those homeowners as we’d like. Many borrowers are not comfortable talking with lenders directly,” Campbell said. “We hope that the cities and organizations’ involvement will encourage participation for those in trouble --to personally sit down and work with homeowners struggling is a critical step.”
According to Campbell the three key components of the project include prevention of foreclosures; quick sale of foreclosed homes and increased opportunities for first-time homebuyers to get mortgages. Wells Fargo created a grant of $125,000 dollars available for Minneapolis and St. Paul to help with down payment assistance for first-time homebuyers.
Campbell said the first goal is to work out modifications to help those in trouble remain in their homes. Wells Fargo’s program would further the federal mortgage program called Home Affordability Modification Program (HAMP) that the government set into motion last March.
In March 2009, the Obama Administration published detailed program guidelines for the Making Home Affordable (MHA) Program. Mortgage servicers were authorized to begin modifications under the plan immediately. With the assistance of several government agencies, GSEs, and servicers - this effort involved the development and refinement of servicer guidelines, modification documents, and data collection and modeling tools.
“We are putting massive efforts to find modification solutions to keep people in their homes,” Campbell said. “We can use the government HAMP as well as Wells Fargo proprietary modification programs. If someone does not qualify for the HAMP, Wells Fargo has its own program which keeps even more than the HAMP program.”
According to Campbell there is a misconception that the banking industry and Wells Fargo have been slow to work on solutions in this mortgage crisis. One of the struggles of the industry was determining how to deal modifications since the HAMP program was not ready until last spring.
“We have been under way with modifications for some time,” Campbell added. “We had to have some clarity and agreement with the federal program.”
Campbell pointed out the modification process requires a lot of information including documents, verifications of hardship and ability to repay. Sixteen hundred mortgages are modified daily across the country and Wells Fargo has increased and trained 14,000 thousand team members working full time on modifications for this year.
“In the Twin Cities for every one customer that has gone into foreclosure Wells has helped three others keep their home through alternative solutions,” Campbell said. “Even one is too many, but it starts to give a sense that the work being done around foreclosure prevention is starting to work. If Wells Fargo has to foreclose on a home we can help get the home into the hands of another owner quickly for the purpose of rehabilitation and sustainable ownership.”
Campbell acknowledges that the current economic situation may seem risky for first-time homebuyers, but the current foreclosure conditions have produced a “windfall” for first-time homebuyers.
“This is a wonderful time for first-time homebuyers. Interest rates are at a historic low; house prices are low and first-time homebuyers [can take advantage of] tax credits. It is our hope that the economy will stabilize and unemployment will begin to decline,” Campbell added. “We don’t want to bet against them or the economy.”
Insightnews.com