HomeMy WebLinkAbout10.03.08 Work Session Packet
City of Farmington
325 Oak Street
Farmington, MN 55024
Mission Statement
Through teamwork and cooperation,
the City of Farmington provides quality
services that preserve our proud past and
foster a promisingfuture.
AGENDA
CITY COUNCIL WORKSHOP
OCTOBER 13, 2008
6:30 P.M.
CITY COUNCIL CHAMBERS
1. CALL TO ORDER
2. APPROVE AGENDA
3. DISCUSS FORECLOSED PROPERTIES
4. DISCUSS OLD CITY HALL SITE
5. ADJOURN
PUBLIC INFORMATION STATEMENT
Council workshops are conducted as an informal work session, all discussions shall be consideredfact-finding, hypothetical and unofficial critical thinking exercises.
which do not reflect an official public position.
Council work session outcomes should not be construed by the attending public and/or reporting media as the articulation of aformal City policy position. Only
official Council action normally taken at a regularly scheduled Council meeting should be considered as aformal expression of the City's position on any given matter.
City of Farmington
430 Third Street
Farmington, Minnesota
651.463.7111 . Fax 651.463.2591
www.ci.farmington.mn.us
TO: Mayor and Councilmembers
FROM: Peter J. Herlofsky, J~
City Administrator c..~
SUBJECT: October 13 Workshop
DATE: October 9,2008
At the last Council meeting the workshop for October 13,2008, was scheduled for discussion of
the following two items:
1. Foreclosed Properties
2. Old City Hall
For your information, attached are the following:
1. Foreclosed Properties
a. Five properties for potential CDBG Funding
b. CDA Foreclosure Update
c. Foreclosures - From the Utility Billing Perspective
This is the most recent information received from Dakota County regarding foreclosed
properties. Police Chief Brian Lindquist will also be in attendance to discuss some of the
activities he has engaged in this past year to help facilitate the issue, and Robin Roland
has provided information on how utilities are handled.
2. Old City Hall
a. Parks DepartmentlRambling River Center Recommendation
b. Wold Estimate
c. (Will be provided on Monday) This past week I contacted Mr. Larry White who
was at previous meetings during discussions of the desired use of the old City
Hall site. Mr. White is a construction manager from Northfield and with short
notice of the Council action on Monday, I was able to contact Mr. White and he
along with Missie Kohlbeck and Patti Norman took a close look at the facility and
using the proposal from the Rambling River Center Board has provided us with
additional information regarding the costs relating to improvements.
I hope this information is adequate. If there is anything else you would like available on
Monday, please let me know.
Thank you.
Cmuller/Herlofsky/Council Memos/Oct 13 Workshop
Page 1 of 1
Peter Herlofsky
From: Lisa Dargis
Sent: Wednesday, October 08, 2008 1 :21 PM
To: 'Dan Rogness'
Cc: Tony Wippler; Lee Smick; Tina Hansmeier; Peter Herlofsky
Subject: RE: Property List Request
Hi Dan,
First, yes I would like to be involved with the city workgroup. Second, here are five homes that I have identified for possible use
for the funds. There is an additional home that I would like to use the dollars for because we have received many complaints
regarding the property, but it is not yet bank owned. I assume that it will be soon. It would be a good fit for rehab dollars (a tree
went through the garage roof this summer and it has not been fixed). I'll just keep my eye on who owns it for now. The examples
I am submitting are as follows:
1111 LocustSt-MLS$153,900
517 Spruce S1. - MLS $135,900
617 Third St - MLS $92,600
401 Main St - MLS $112,900
18315 Everton C1. - MLS $169,900
EMV $212,500
EMV $173,300
EMV $146,000
EMV $128,700
EMV $189,300
Rehab
Demo
Demo
Demo
Rehab
We have several newer homes that would be great candidates for down payment assistance. Some may need a little rehab (hard
to tell from the outside) but most appear to be in fairly decent condition. Let me know if you would like any other information.
Thanks!
Lisa
From: Dan Rogness [mailto:DanRogness@dakotacda.state.mn.us]
Sent: Wednesday, October 08,2008 12:00 PM
To: Adam Kienberger; Branna Lindell; Brian O'Connell; Bruce Nordquist; David Olson [Lakeville]; Erik Slettedahl; Jake Sedlacek;
Jim Hartshorn; John Hinzman; Jon Hohenstein; Julie Dorshak; Kim Lindquist; Lisa Dargis; Michele Merxbauer; Renee Vought; Tina
Hansmeier; Tom Link; Tom Lovelace
Cc: Melissa Taphorn
Subject: Property List Request
I wanted to mention via a-mail my request to all of you, which I mentioned this morning at our workshop. If possible by the end of
this week (or early next), please e-mail me a list of properties within your community (5-10 maximum) that you may be aware of
that are currently in foreclosure or now owned by a mortgage company. These properties may either be ones that you see as
having potential for rehab or demolition. As I stated this morning, the newly allocated CDBG funds to Dakota County (approx.
$2.8 million) must be used to purchase and redevelop abandoned or foreclosed homes (having gone through the 6-mo.
redemption period). Funds can also be used to provide financing for persons to purchase any foreclosed or abandoned home.
You can certainly do some of your own research on MLS, Fannie-Mae, HUD, etc. websites in order to search for REO homes, but
you can also just send me those homes that have been identified by complaint or other code-violation process. I will need you to
send me at least an address and whether you think this is worthy of rehab or demolition.
Finally, if you have an interest in being part of a possible city workgroup as we continue to process and implement these NSP
funds, you can let me know in the same e-mail. Thanks!!
Dan Rogness
Director of Community Revitalization
Dakota County CDA
Eagan, MN
651.675.4464
10/8/2008
Peter Herlofsky
From: Ed Nelson [ed@hocmn.org]
Sent: Wednesday, October 08,200812:35 PM
To: Peter Herlofsky
Subject: 80ct08: Foreclosure Prevention Resources eNewsletter
Minnesot~~
8Qm~QYYD~f?bip
Center
Page 1 of 4
MN Home Ownership
October 8, 2008
Foreclosure Prevention
Resources Newsletter
New Fact Sheets for Minnesotans
Minnesota Home Ownership Center creates additional
fact sheets to assist homeowners and professionals
The Emergency Economic Stabilization Act (EESA),
passed by Congress last week, is designed to address
the nation's credit problems. A problem attributed
largely to the foreclosure crisis. While the legislation
offers no specific actions to prevent homeowners from
entering foreclosure, it does direct the Treasury
Department to try to minimize foreclosures, primarily
through mortgage modification. The new legislation also
includes several provisions that may affect Minnesota
homeowners.
The Minnesota Home Ownership Center has created
two new fact sheets related to the Emergency Economic
Stabilization Act:
Ih~Em~rg~.ncy......EcQnQmlc.....Sta.biJJzati.Q.n.....A.ctQf
2008
Outlines provisions affecting homeowners
MQrtgag~D~btFQrgiv~n~$$
Provides home owners valuable information about
current legislation and tax issues related to mortgage
debt forgiveness.
10/8/2008
In This Issue
New Fact Sheets
Telephone Seminars for
At-Risk Homeowners
Fall Foreclosure Workshop
Series at Hennepin County
Libraries
Page 2 of 4
These, and other fact sheets, can be found at the
Centers website:
http://www.hocmn.org/ProfessionaIResources.cfm
Little is know about what role, if any, the Treasury
will play in helping to reduce the number of
foreclosures. Homeowners who are having difficulty
with their mortgage payments should not wait for further
details before seeking help.
The Minnesota Home Ownership Center oversees a
statewide network of non-profit Mortgage Support
Advisors that offer free and confidential services to
struggling home owners. For more information, visit
hocmn.org or call 651-659-9336 (866-462-6466 outside
of the metro area).
Telephone Seminars for At-Risk
Homeowners
Minnesota Home Ownership Center uses
communications technology to reach at-risk
homeowners
On Thursday September 18th, The Minnesota Home
Ownership Center successfully piloted an innovative
way to reach people on the verge of foreclosure - the
first of a series of telephone seminars for people worried
about foreclosure.
These seminars use new technology that allows
thousands of people to phone in and participate
anonymously from the privacy of their home, work or
car. The seminar format is similar to a radio call-in
show, including informational segments and questions
from callers. Used frequently by elected officials and
corporations, the Center is the first to
use this technology to reach at-risk homeowners.
The next telephone seminars will take place on:
Wednesday, October 15 from 7:00 to 8:00 pm
Call in number: (888) 886-6603
Tuesday, November 18 from 7:00 to 8:00 pm
Call in number: (888) 886-6603
10/8/2008
Those interested in participating can call in anytime
between 7:00 and 8:00 pm
For more information, call 651-659-9336 or visit
www.hocmn.org.
These telephone seminars provide a passive access
point to information for homeowners who are just
beginning to ask questions about their situation and
those who are not yet ready to acknowledge their
personal circumstances to a lender or mortgage support
specialist.
Fall Foreclosure Workshop Series
"What You Need To Know About Foreclosure" Series at
Hennepin County Libraries.
The Minnesota Home Ownership Center is pleased to
announce a new series of informational workshops for
homeowners that may be at-risk of foreclosure, or are
looking for additional information about the foreclosure
process in Minnesota. These workshops are presented
in collaboration with Hennepin County Taxpayer
Services and the Hennepin County Libraries.
Remaining Fall Mini-Workshops:
Monday, October 20 (6:30-8:00)
Oxboro Library
8801 Portland Ave. S., Bloomington, MN 55420
Saturday, November 1 (1 :30 - 3:00)
Pierre Bottineau Library
55 Broadway St. NE, Minneapolis, MN 55413
Wednesday, November 12 (6:30-8:00)
Golden Valley Library
830 Winnetka Ave. N., Golden Valley, MN 55427
Tuesday, December 2 (6:30-8:00)
Brooklyn Park Library
8600 Zane Ave. N, Brooklyn Park, MN 55443
Additional information about these workshops can be
found at the Center's website: www.hocmn.org.
This message was sent from Ed Nelson to pherlofsky@ci.farmington.mn.us. It was sent from: Ed Nelson, 633 South
Concord Street, Suite 200, South St. Paul, MN 55075. You can modify/update your subscription via the link below.
10/8/2008
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10/8/2008
CD~ Dakota County
.... · · . · Community Development Agency
. . . . . .. . . . . ..... . . . . . . .. ..
~~
OW N fR'fffI P"
ClJl'UteCtibfV
MEMO
August I S, 2008
TO: Dakota County Cities
From: Dan Rogness, Director of Community Revitalization
Re: Foreclosure Update
There are a few different ways that foreclosures can be measured to give a better idea of how
many households are affected by the current crisis. The following table shows the percentage of
foreclosed homes in Dakota County's II major cities for 2007 and through July for 2008:
City Percentage of Foreclosed Percentage of Foreclosed
Homes in 2008 Homes in 2007
Apple Valley 0.9 1.2
Burnsville 0.8 0.9
Eagan 0.6 1.0
Farmington 1.8 2.0
Hastings 0.9 1.2
Inver Grove Heights 0.6 0.8
lakeville 1.0 1.2
Mendota Heights 0.3 0.3
Rosemount 1.0 1.2
South St. Paul 1.4 I.S
West St. Paul 0.9 1.1
Note: Percentages were obtained by dividing total number of Sheriff Sales for 2008 and 2007 by the Metropolitan
Council 2006 estimated households, which includes renter and owner occupied units.
Recently, you may have heard or read about the new housing bill that President Bush signed
into law on July 30. The Hope for Homeowners Act of 2008 is poised to help nearly 400,000
Americans prevent foreclosure. The bill will go into effect on October I, 2008 and will continue
through September 20 II. Included in the August E-news are two articles that explain the bill in
more detail.
CD~ Dakota County
· .... . ... .... ..Community Development Agency
.. ......... .... .... ............ ..........
..~
OWN fR'fffl P'
C()rutedW/tl
Dakota County Stats - July 2008
. # of Sheriff Sales in July - 188 (compared to 133 in July 2007)
. Total Sheriff Sales for 2008 - 1,294 (compared to 80 I Jan.-July, 2007)
. # of Notice of Pendency's Filed in July - 280
. Total Notice of Pendency's Filed for 2008 - 1,684
A Notice of Pendency is filed by a mortgage company's attorney as official notification that the
foreclosure process has begun. Not all of these result in sheriff sales. Pages 3 and 4 of this PDF
file have Sheriff Sale and Notice of Pendency statistics for each city.
Mapping Using Dakota County GIS
http://gis.co.dakota.mn.us/website/ dakotanetgis/
The Dakota County Office of GIS is updating the 2008 Foreclosures and Notice of Pendency
layers on a monthly basis. If you need assistance using this Web page, please call Randy Knippel
or Mary Hagerman with the Office of GIS at (952) 891-7081.
In The News
Provided in this PDF file are a few notable foreclosure articles that were published in the last
month. Among the points of interest:
. A guest column written by the CDA's Executive Director, Mark Ulfers, about
homeownership in the current economic climate, which was published in all Dakota
County editions of the Sun Current.
. With the home foreclosure mess deepening, Dakota and Scott County officials have
been exploring avenues to help residents. The article also touches on how foreclosures
affect other aspects of the county and housing industry, including the rental market.
. An article outlining the details that surrounded the signing of the Hope for
Homeowners Act of 2008, as well as some provisions of the bill.
. A question and answer that gives even more information about the Hope for
Homeowners Act of 2008, including clarifying points and details.
If you have any other concerns, please call me at (65 I) 675-4464 or send me an
email atdrogness@dakotacda.state.mn.us.
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Sun Newspapers - MNSUN.com - For some it is the 'best oftimes,' for others the worst
Page 1 of2
MN.SUN
44 communHy nl/lWSpOpl/lTS
For some it is the 'best of times,' for others the worst
By Mark Ulfers - Guest Columnist
(Created: Wednesday, July 2, 2008 3:47 PM CDT)
In the current economic climate, many of you may be wondering whether achieving or sustaining the
"American Dream" of homeownership is realistic.
Daily headlines paint a grim picture of the housing market - building permits at an all time low, an
abundance of homes for sale, interest rates at their highest level in nine months and the continuing
rise in home foreclosures.
At the midpoint of 2008, Dakota County has had nearly 1,100 sheriff sales compared to 668 in the
first six months of 2007. Early predictions have estimated that there will be nearly 2,700 sheriff sales
in Dakota County by the end of the year (a 60 percent increase over 2007) and more than 28,000
sheriff sales across Minnesota.
Just a few years ago, Dakota County had only a few hundred sheriff sales annually, as did most
counties in the metro area. The projected foreclosure rate for 2008 for the metro is 1.81 percent
compared to last year's rate of 1.18 percent. This year, Dakota County's anticipated foreclosure rate
is 1.80 percent.
Government and non-profit agencies throughout Minnesota are here to help homeowners who are
struggling to pay their mortgage and assist them with finding solutions to remedy their situation.
The Dakota County Community Development Agency (CDA) has been administering the state-funded
Mortgage Foreclosure Prevention Program since 2003 and over the past five years has fielded more
than 2,600 calls and intensely counseled more than 450 households. Homeowners work with trained
homeownership specialists who evaluate their financial situation, provide referrals to community
resources and assist with working with the mortgage company on a repayment plan or refinancing.
Most often the reasons for a homeowner's mortgage delinquency is related to a decrease in income
(loss of hours or wages), unemployment, death or illness, too many bills or personal relationship
issues (divorce or separation).
There are many factors that will affect how many foreclosures there will be, but one of the biggest
impacts will be the large number of mortgages with adjustable rates that will be resetting this year.
Sheriff sale statistics alone don't illustrate the sheer number of homeowners struggling monthly to
pay their mortgage, but are not yet in foreclosure. These factors are having a significant impact on
people reaching their American Dream of home ownership across the nation and in Dakota County.
For some this is the worst time to be a homeowner if you're struggling to make ends meet.
However, for others, now is the perfect time to become a homeowner because there are plenty of
homes to choose from.
And, the challenge to reach the American Dream of home ownership goes on through another
economic cycle.
Mark Ulfers is the executive director of the Dakota County CDA.
(You are invited to comment about this column on our website at www.mnsun.com and/or write a
letter to the editor at suncurrentsouth@acnpapers.com.)
http://www.mnsun.com/articles/2008/07 /03/opinion/cw03adhousingcolumn.prt
7/3/2008
Foreclosures have officials in Scott, Dakota pondering how to help
Page 1 of2
starTribune.com I MINNEAPOLIS - ST. PAUL, MINNESOTA
Foreclosures have officials in Scott, Dakota pondering how to
help
By DAVID PETERSON and JOY POWELL, Star Tribune staff writers
July 2, 2008
Government officials across the southern metro area are being warned that the home-
foreclosure mess is deepening, creating serious questions as to what they can or should
do about it in a year when they themselves face exceptionally tight budgets.
The increase in the number of sheriffs sales in Dakota County from last year to this year
is expected to be almost as great as the total number of sheriffs sales in 2006, that
county's board is being told.
And the board in Scott County was informed this week that foreclosure numbers there
are expected to double this year over last, after having doubled from the year before --
and that it is likely to be a couple of years before they stabilize.
"It is a daunting task," said Mary Monteith, assistant director of the Carver County
Community Development Agency, which works with Scott County on these issues.
"Some days we look at each other and ask, 'Why do we do this?1ll
Scott County Commissioner Jon Ulrich told Monteith:
"My impression is that your caseload far exceeds your ability to respond. We're taking a
sip out of a fire hydrant of water. And time is not on anyone's side -- not the
homeowner's, and not the lender's."
Monteith said it's vital to get word out that help is available for people sliding into crisis.
And the earlier they take steps to respond, the better, she said. It's even possible for
government agencies to assemble packages of financial help to get homeowners through
temporary crises.
In an interview on Wednesday, she stressed that money is not being handed out willy-
nilly.
"We will not put public money in unless we are satisfied that the hardship has been
overcome and can be shown -- on paper, in black and white -- that they can now afford
that mortgage."
Both Scott and Dakota are among the state's most affluent counties. As recently as 2001,
there were fewer than 200 sheriffs sales of foreclosed properties in Dakota.
http://www.startribune.comltemplates/Print_This _ Story?sid=22846179
7/3/2008
Foreclosures have officials in Scott, Dakota pondering how to help
Page 2 of2
There were just fewer than 1,600 sheriff's sales in 2007, with some of the highest rates
being in Farmington, South St. Paul and West St. Paul.
The fallout is hitting homeowners' associations, which are seeing dues go unpaid; cities,
which are dealing with unpaid utility bills and unmowed lawns; and neighborhoods, which
are seeing property values pulled down because of foreclosures, Dakota County analysts
said.
As the market corrects itself and there are more foreclosures, more residents will be
moving into apartments, they said. Perhaps that could help decrease rents, which in
2007 averaged $1,200 for a three-bedroom apartment.
In Scott, meanwhile, Monteith said Wednesday that sheriff's sales have zoomed from 328
in 2006 to 606 last year and are expected to top 1,240 this year, without relenting
anytime soon.
The No.1 reason, her staff believes, is poor money management: people who take on
more than they can afford. But that accounted for only about a fifth of May's cases. Other
reasons included loss of a job, divorce, medical costs, failed business ventures and
mortgage products such as refinancings that people didn't understand.
"People will sign anything you put in front of them; it's amazing," she told Scott
commissioners. "They beat themselves up when they realize they didn't trust their gut
instincts."
dapJ~teJl?9n@g~rtrib_!Jlle.com 952-882-9023 jpQwell@~:tartriplJt1Sl.GQm . 952-882-9016
@ 2008 Star Tribune. All rights reserved.
http://www.startribune.com/templates/Print_ This _ Story?sid=228461 79
7/3/2008
Avoiding public ceremony, Bush quietly signs measure offering mortgage relief for thous... Page 1 of3
starTribune.com I MINNEAPOLIS - ST. PAUL, MINNESOTA
Avoiding public ceremony, Bush quietly signs measure
offering mortgage relief for thousands
By JENNIFER LOVEN, Associated Press
July 30, 2008
WASHINGTON - President Bush signed a housing bill Wednesday intended to rescue
about 15 percent of the cash-strapped homeowners in fear of foreclosure in the next year
or so.
Early in the morning and out of public view, the president signed it without fanfare in the
Oval Office, adding his signature to a measure he once threatened to veto. The White
House said he was accompanied by Treasury Secretary Henry Paulson, Housing and
Urban Development Secretary Steve Preston and other administration officials.
"We look forward to put in place new authorities to improve confidence and stability in
markets," White House spokesman Tony Fratto said. He said the Federal Housing
Administration would begin to put in place new policies "intended to keep more deserving
American families in their homes."
The legislation is regarded as the most significant housing bill in decades. It won
approval from lawmakers eager, in an election year, to come up with an answer to the
growing housing crisis.
"By expanding homeownership opportunities and protecting families against foreclosure,
we are helping keep the American Dream alive," said House Speaker Nancy Pelosi, D-
Calif.
The measure includes $300 billion in new loan authority for the government to back
cheaper mortgages for troubled homeowners; $3.9 billion for communities to fix up
foreclosed properties causing blight in neighborhoods; and $15 billion in tax cuts,
including an expanded low-income housing tax credit and a credit of up to $7,500, to be
repaid, for some first-time home buyers.
The number of homeowners who could lose their homes to foreclosure by the end of
2009 is estimated by some to be around 2.8 million. Under the legislation, 400,000
having trouble with payments could avoid it by trading their loans for new, more
affordable mortgages through the Federal Housing Administration.
Their banks would have to agree to allow the swap and to take a large loss in exchange
for avoiding the lengthy and costly foreclosure process. To qualify, homeowners would
have to be paying more than 31 percent of their incomes toward their mortgages and
show they could afford to make the payments on a new, smaller loan.
http://www.startribune.com/templates/Print_This _ Story?sid=26091784
7/30/2008
Avoiding public ceremony, Bush quietly signs measure offering mortgage relief for thous... Page 2 of3
The measure also is designed to help stabilize markets, in part by making credit more
easily available amid rising defaults and falling home values.
The bill permanently increases to $625,000 the size of home loans in high-cost areas that
the government-sponsored mortgage companies Fannie Mae and Freddie Mac can buy
and that the FHA can insure. It would otherwise have reverted to $417,000 for Fannie
and Freddie and $362,790 for the FHA by the end of the year.
The White House sought to focus attention on parts of the legislation aimed at calming
markets. Those include the offer of a temporary but unlimited government line of credit
for troubled Fannie Mae and Freddie Mac. The Treasury Department gains power, until
the end of 2009, to lend them emergency money or buy their stock.
This is considered crucial because investor fears about the health of the companies,
which buy or guarantee about half of the nation's mortgage loans.
An overhaul of the Depression-era FHA also was requested by Bush. So, too, was the
provision to keep homeowners from making overly risky mortgage choices by requiring
lenders to show how high a borrower's payment could get under the terms of his
mortgage. It provides $180 million in preforeclosure counseling.
Democratic leaders added an $800 billion increase, to $10.6 trillion, in the statutory limit
on the national debt.
The House passed the bill a week ago. Senators voted on Saturday to send it to the
president. The votes were supported by many Republicans, particularly those from areas
hit hardest by housing woes.
Through the process, Bush did not like what he saw emerging from Congress and said
he would veto it. At first, he opposed the foreclosure rescue through the FHA as an
overly cumbersome bailout. Later, though, his veto threat was focused almost entirely on
the $3.9 billion in neighborhood grants, which he said would encourage lenders to
foreclose rather than work with borrowers.
The president also was sensitive to complaints by fiscal conservatives, who object to the
raise in the debt ceiling and the bailout for Fannie Mae and Freddie Mac shareholders.
Some, but not all, were mollified by the bill's establishment of a regulator with stronger
reins over the two companies and the new "consultative" role overseeing the companies
for the Federal Reserve.
Bush withdrew his veto threat early last week, saying hurting homeowners could not wait
for the outcome of a veto showdown that would take weeks - though he predicted he
would have won that fight.
The White House cast Bush's quiet signing of the bill as an act of expedience, not
camouflage.
http://www.startribune.comltemplates/Print_This _ Story?sid=26091784
7/30/2008
Avoiding public ceremony, Bush quietly signs measure offering mortgage relief for thous... Page 3 of3
Press secretary Dana Perino said the early morning action was Bush's first opportunity to
sign because the bill was transmitted to the White House on Tuesday night. She also
noted that most bills are signed without formal ceremonies - though that is usually the
case because they are minor measures, not legislation of this magnitude.
Bush's action seemed to indicate he wanted to play both sides: avoid being seen as not
helping middle America in a crisis and avoid too close an association with a bill that many
in the GOP opposed.
"We recognize that there were many people who did not support the bill. We agreed with
them on almost every count when it came to that," Perino said.
She said the bill that set for signing ceremony Wednesday - one to triple money to fight
AIDS and other diseases around the world - was the better choice for such attention.
"I would dare say that that deserves a larger signing ceremony than anything else that
was passed this week in Congress," she said.
@ 2008 Star Tribune. All rights reserved.
http://www.startribune.com/templates/Print_ This _ Story?sid=26091784
7/30/2008
Will the housing-rescue law help you? - Mortgage Mess - MSNBC.com
Page 1 of2
A MSNBC.com
Will the housing-rescue law help you?
Legislation aims to help more borrowers avoid foreclosure
The Associated Press
updated 10:18 a.m. CT, Wed., July. 30, 2008
Questions and answers about the Hope for Homeowners Act of 2008, signed into law by President Bush
Wednesday to try to steer as many as 400,000 struggling homeowners away from foreclosure:
Q: What exactly will the legislation do?
A: It will allow those who qualify to cancel their old mortgage loans and replace them with 30-year fixed-rate
loans for up to 90 percent of the home's current value. The FHA will insure a total of $300 billion of the loans
over a three-year period.
But the decision on whether to write such a loan remains up to banks, which would have to be willing to take
a loss on the existing loans in exchange for avoiding an often-costly foreclosure.
Q: Who is eligible?
A: Eligible borrowers must have spent more than 31 percent of their monthly incomes on their mortgages as
of March 1, 2008. The troubled loan must have originated no later than Jan. 1, 2008, and be on the
borrower's primary residence. And the borrower's income must be verified.
Q: When does the program start?
A: It takes effect Oct. land runs through September 2011, although the FHA isn't likely to have it operating
at full capacity until next year.
Q: Since lenders can pick and choose which loans to refinance, how can consumers determine if
theirs will be selected?
A: Check with the bank or financial company servicing your mortgage, but it may be weeks before they make
decisions concerning the new guidelines and assess individual loans.
Even then, keep expectations limited.
"Servicers are going to be reluctant to take the government up on their offer," predicted Mark Zandi, chief
economist at Moody's Economy.com. "The earliest they'll start taking them up on it is early next year. And
even then it's likely to be modest."
Q: Is there anything a homeowner can do to improve chances of benefiting from the program, such
as crunching numbers to make a case for the bank?
A: Not really. The best step is to keep up your payments as best you can.
Q: But doesn't this provide an incentive to NOT pay your mortgage, if you're barely keeping ahead
of bills and are underwater on your house, so you can qualify?
A: No. If your situation deteriorates enough, the bank may reject any possible new loan.
"Turning yourself into a financial basket case is not going to work," said Dan Seiver, a finance professor at
San Diego State University. "If you turn into a complete deadbeat, the servicer is going to just foreclose and
dump it."
http://www.msnbc.msn.com/id/25932640/print/l 1 displaymode/l 0981
7/31/2008
Will the housing-rescue law help you? - Mortgage Mess - MSNBC.com
Page 2 of2
Q: So what should I be doing now besides trying to keep up with payments?
A: Talk to a local credit counselor and call the toll-free hot line of the Hope Now alliance - an industry group
trying to coordinate a response to the mortgage crisis - at 1-888-995-HOPE. It is available 24 hours a day to
provide mortgage counseling in multiple languages.
Mary Thomason, director of resource development for The Impact Group of Atlanta, a housing counseling
group, also suggests tracking expenses and income closely in order to be able to forecast your cash flow for
the next six months and give yourself better control of your finances.
Q: If the banks and lenders refuse to write these loans, then what?
A: Public and political pressure may prompt them to participate. If not, and more people continue to lose their
homes, Zandi says the next White House administration subject them to additional regulations or
investigations if they remain unwilling to take on the risks.
Q: What happens if I'm able to sell my home after I refinance?
A: If you sell during the next five years, you must agree to share 50 percent of any profits from the resale
with the government. What's more, homeowners can only retain equity gains based on a sliding scale. The
homeowner would have zero equity from a sale in the first year, with the amount rising 10 percent in each
succeeding year and capping at 50 percent from a sale in year five and thereafter.
The equity must be repaid because the maximum amount on the new loans will be capped at 90 percent of
the current market value, which automatically gives the previously troubled homeowner 10 percent equity in
the home.
Q: Where can consumers find more detailed information about the plan?
A: Click here for a six-page summary of the housing act, and the FHA's Web site is a place to watch for
updated information. Click here for the entire 694-page bill.
@ 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or
redistributed.
URL: http://www.msnbc.msn.com/idJ25932640/
MSN Privacy . Legal
~ 2008 MSNBC.com
http://www.msnbc.msn.com/idJ25 932640/print/l/ displaymode/l 098/
7/31/2008
FORECLOSU RES AN D SHORT SALES
IN THE TWIN CITIES HOUSING MARKET
Q2 2008 UPDATE
A SPECIAL RESEARCH REPORT FROM TH E M INN EAPOLlS AREA ASSOCIATION OF REALTORS@
Jeff Allen
MAAR Research Manager
www.mplsrealtor.com
Aaron Dickinson
REALTOR@
www.twincitiesrealestateblog.com
The unfortunate growth offoreclosures and
short sales (i.e., lender-mediated properties)
has had substantial effects on the Twin Cities
housing market and doesn't appear to be going
away anytime soon.
This lender-mediated activity has significantly
different effects than traditional real estate
because a lender is intimately involved in the
transaction-either by acting as the current
owner/seller in the case of a foreclosure or as a
less-direct intermediary with approval powers in
the case of a short sale.
Foreclosures are properties in which the
financial institution has repossessed the
home from the owner due to nonpayment of
mortgage obligations. Short sales are unique
arrangements where the financial institution
and in-default homeowner work together in an
attempt to sell the home before it is foreclosed
upon.
Building upon the unique methodology
introduced with the initial report, this Q2 2008
Update digs further, providing new analysis by
M LS area, city, property type and price range.
What follows is a detailed and up-to-date picture
of the role of lender-mediated properties in the
local housing market.
Published on August '4, 2008
Downtown St. Paul
TABLE OF CONTENTS
I nventory of Homes for Sale 2
Median Sales Price 3
New Listings and Closed Sales 4
Appendix A: M LS Area Breakdown 5
Appendix B: Municipality Breakdown 7
Explanation of Methodology 11
^
M INN EAPOLlS AR EA Association
of REALTORS"
www.mplsrealtor.com
FORECLOSU RES AN D SHORT SALES
IN THE TWIN CITIES HOUSING MARKET
Q2 2008 UPDATE
^
Inventory of Homes for Sale
Property Type
All Properties
Single-Family Detached
Townhomes*
Condominiums
MINNEAPOLIS AREA Association
of REALTORSe
lender-Med iated
Traditional
Total
Share of Total Inventory
That Is Lender-Mediated
7-2007 7-2008 Change 7-2007 7-2008 Change 7-2007 7-2008 Change 7-2007
3,722 7,171 + 92.6% 30,879 25,950 - 16.0% 34,601 33,121 -4.3% 10.8%
2,972 5,445 + 83.2% 20.969 17,679 - 15.7% 23,941 23,124 - 3.4% 12.4%
584 1,381 + 136.5% 6,473 5,415 - 16.3% 7,057 6,796 - 3.7% 8.3%
166 345 + 107.3% 3,437 2,856 - 16.9% 3,603 3,201 - 11.2% 4.6%
7 -2008
21.7%
23.5%
20.3%
10.8%
.Includes twinhomes
Share of Inventory That Is lender-Mediated
21.7%
All Properties
Price Range
Under $120,000
$120,001 to $150,000
$150,001 to $190,000
$190,001 to $250,000
$250,001 to $350,000
$350,001 to $500,000
$500,001 to $1,000,001
$1,000,001 and above
All Prices
. 7-2007
. 7-2008
23.5%
____._r__n.._n_.___n
4.6%_
------
20.3%
10.8%
Single-Family Detached
Townhomes*
Condominiums
THE. .
Skinriy
lender-Mediated
Traditional
Total
Share of Total Inventory
That Is Lender-Mediated
7-2007 7-2008 Change 7-2007 7 -2008 Change 7-2007 7-2008 Change 7-2007
742 1,695 + 128.6% 1,119 1,388 + 24.1 % 1,860 3,083 + 65.7% 39.9%
579 1,257 + 117.1% 1,943 1,936 - 0.4% 2,522 3,193 + 26.6% 23.0%
879 1,673 + 90.3% 5,012 4,244 - 15.3% 5,891 5,917 +0.4% 14.9%
772 1,319 + 70.8% 7,665 5,721 - 25.4% 8,437 7,040 - 16.6% 9.2%
420 699 + 66.3% 6,778 5,250 - 22.5% 7,198 5,949 - 17.4% 5.8%
224 345 + 53.9% 4,338 3,528 - 18.7% 4,562 3,873 - 15.1 % 4.9%
94 168 + 78.2% 3,209 2,992 - 6.8% 3,303 3,160 -4.3% 2.9%
12 16 + 38.6% 816 890 + 9.1% 827 906 +9.5% 1.4%
3,722 7,171 + 92.6% 30,879 25,950 - 16.0% 34,601 33,121 -4.3% 10.8%
Share of Inventory That Is lender-Mediated
55.0%
7 -2008
55.0%
39.4%
28.3%
18.7%
11.7%
8.9%
5.3%
1.8%
21.7%
THE. .
Skinriy
.7-2007
.7-2008
39.4%
28.3%
II 18.7%
II 11.7%
8.9%
III ~ 2.9% 5.3% 1.4%1.8%
- -
Under $120,001 to $150,001 to $190,001 to $250,001 to $350,001 to $500,001 to $1,000.001 and
$120,000 $150,000 $190,000 $250,000 $350.000 $500,000 $1.000.001 above
@ 2008 Minneapolis Area Association of REAL TORS@.
2
FORECLOSU RES AN 0 SHORT SALES
IN THE TWIN CiTIES HOUSING MARKET
Q2 2008 UPDATE
^
Median Prices
MINNEAPOLIS AREA Association
of REALTORS"
Lender-Mediated Traditional Total
"""
Q2 Q2 Q2 2-Yr Q2 Q2 Q2 2-Yr Q2 Q2 Q2 2-Yr
2006 2007 2008 Change 2006 2007 2008 Change 2006 2007 2008 Change
All Properties
Single-Family Detached
Townhomes*
Condominiums
*Includes twinhomes
$174,500 $169,900 $154,000 - 11.7% $235,000 $235,000 $227,000 -3.4% $235,000 $228,900 $207,000 -11.9%
$182,000 $178,000 $160,000 -12.1% $255.000 $255,000 $245.000 -3.9% $251,950 $248,000 $220.000 -12.7%
$157,000 $151,000 $140,000 -10.8% $192.763 $190,000 $180,000 -6.6% $191,900 $186,050 $170.000 -11.4%
$112,001 $93.000 $108,950 -2.7% $175,500 $172,500 $178,005 + 1.4% $175,000 $169,900 $169,900 -2.9%
Q2 Median Sales Prices
.02-2006 .02-2007 .02-2008
$235,000 $235,000 $227,000
Total
Lender-Mediated
Traditional
Two-Year Change in Median Price by Property Type
Traditional Condominiums
. +1.4%
Lender-Mediated Condominiums
-2.7% _
Traditional Single-Family
-3.9%
Traditional Townhomes
-6.6%
Lender-Mediated Townhomes
-10.8%
Lender-Mediated Single-Family -12.1 %
@ 2008 Minneapolis Area Association of REAL TORS@.
THE . .
Skinriy
THE. .
Skinriy
3
FORECLOSURES AND SHORT SALES
IN THE TWIN CITIES HOUSING MARKET
Q2 2008 UPDATE
^
MINNEAPOLIS AREA Association
of REALTORS"
New Listings and Closed Sales
Share of Market
Lender-Mediated Traditional Total Activity That is
Lender-Mediated
-'
Q2 Q2 Q2 2-Yr Q2 Q2 Q2 2-Yr Q2 Q2 Q2 2-Yr Q2 Q2 Q2
2006 2007 2008 Change 2006 2007 2008 Change 2006 2007 2008 Change 2006 2007 2008
New Listings
Closed Sales
997 2,932 6,742 + 576.2% 32,336 29,253 21,050 - 34.9% 33,33332,18527,792 -16.6% 3.0% 9.1% 24.3%
450 968 2,863 + 536.2% 14,550 11,431 8,242 - 43.4% 15,000 12,399 11,105 - 26.0% 3.0% 7.8% 25.8%
Share of Market Activity That Is Lender-Mediated
. New Listings
. Closed Sales
25.8%
9.1%
7.8%
3.0% 3.0%
02
2006
02
2007
02
2008
New Listings
35,000
I
I:;';";"'Traditional I
-Lender-Mediated, i
30,000 '1
25,000 +"
20,000 I
I
15,000 -1
I
10,000 1 .
I
5,000 I
01.-....
.
.
.
.
.".
.
.
II
01-2005 02.2005 03-2005 04-2005 01-2006 02.2006 03-2006 04-2006 01-2007 02.2007 03-2007 04-2007 01-2008 02-2008
Closed Sales
20,000
15,000
-Traditional
- "-Lender-Mediated
I
10,000 L.
5,000 L
0..;...-- '.
.
.
.
.
.
.
.
.
.
01-2005 02-2005 03.2005 04-2005 01-2006 02.2006 03-2006 04.2006 01-2007 02-2007 03-2007 04-2007 01.2008 02.2008
@ 2008 Minneapolis Area Association of REAL TORS@.
THE.-
Skinriy
;
I
I
-1
THE. .
Sk!.nriy
-
-
4
FORECLOSURES AND SHORT SALES
IN THE TWIN CiTIES HOUSING MARKET
Q2 2008 UPDATE
Appendix A: MLS Area Breakdown
MLS Area
300 - MPLS - Calhoun-Isles
301 - MPLS - Camden
302 - MPLS - Central
3133 - MPLS - Longfellow -
304 - MPLS - Nokomis
~Q~-MJ;b~':
306 - MPLS - Northeast
307 - MPLS - Phillips
308 - MPLS - Powderhorn
309 - MPLS - Southwest
31 O.M~L~P University
3.10f.~~ffalo
341 - Wright County (Ext Buffalo)
342 - Hutchinson
343 - Mcleod County
360 -~9~Wn.~dale
361.;:g2'~.t~l.
'3~?,;; N~wttop~,.;
363 - Brooklyn Center
364 - Brooklyn Park
365 - Maple Grove/Osseo
~66 :'ghamPfin
36I-.Hennepih-North
~li.~',:!j~!J~epir;E~2!1D~~.a
370 - Sibley County
373 - Golden Valley
374 - Plymouth
378 -Rli:hfiell
~T~F BIOOmi~gt?n.:E1~\ii..
380~ Bloomington-vyest
381 - Lake Minnetonka
385 - Edina
386 - Hopkins
387: Minn.eton.~~
391" Saint Louis P~rk'
392" Eden Prairie
,~"'" )!\ji"","",..,.
394 - Carver County
396 - Chanhassen
397 - Chaska
II:
. .
l
I
!
I
428
460
517
146
294
393
242
114
281
"" "" ""fS'''' Mi
323
99
234
1,504
201
212
185
208
155
370
945
708
F:"C!'+:'~
206
177
207
""."".~~~, ~."""'"
114
167
587
239~x""Ki
174
392
946
492
118
488
363
594
~W_1''h
417
245
256
South
604 - Mendota/Lilydale/Mendota Heights
605 - Sunfish Lake
608 - Inver Grove
610Qj'Eagan":
612: Burnsville
61.4 - Apple Valley
616 - Rosemount
617 - Hastings
618 - Eastern Dakota County
624 - F arrnington
626 - Lakeville
> .::i~
[628 : $outl1ernDakotaGouhty
133
172
127
10
278
47'6
524
502
240
236
17
370:: -
493
@ 2008 Minneapolis Area Association of REAL TORS@.
, .
27
249
41
.n;l!i'
38
63
233
71
39
126
38
52
296
11
24
54
62
39
171
396
105
62
41
-"'_..",?~
22
17
53
66
44
43
89
26
24
50
37
50
26
32
'3 .~
40
10
1
68
127
""'~
50
42
1
'96-
90
5
^
MINNEAPOLIS AREA Association
of REALTORS'
Q1 & Q2 2008 Home Sales
. , .
. ,
6.3% 229 26 11.4%
54.1% 311 182 58.5%
7.9% 346 20 5.8%
26.0% 159 28 1'1.6';/0
21.4% 350 71 '20.3%
51!.~% ..~~5 207 60.0%
<II "'" """,,w,,,, ... ~~
29.3% 161 42 26.1%
34.2% 27 12 44.4%
44.8% 145 43 29.7%
328 -'12.i~i. -
9.6% 40
38.4% 37 5 13.5%
22.2% 117 35
"
19.7% 659 189 28.7%
5.5% 113 10 8.8%
11.3% 95 16 16.8%
29.2% 70 15 21.4%
29.8% 134 41 30.60;'
25.2% 83 27 32.5%
"'",'''''4
46.2% 112 63 56.3%
41.9% 425 192 45.2%
14.8% 443 68 15.3%
... ~":': iP 108 29 26.9%
30.1%
23.2% 74 16 21.6%
1~::!~ 2.9 26.1%
~ - ..~ ...,";/\j-
19.3% 51 11 21.6%
10.2% 102 14 13.7%
9.0% 386 35 9.1%
27:fl'Yo 182 -- 36 19.8%
25.3% 169 51 30.2%
11.0% 215 35 16.3%
9.4% 276 48 17.4%
5.3% 286 26 9.1%
20.3% 65 18 27.7%
10.2% 234 30 12.8%
10.2% 302 29 9.6%
13.1,j10 I 381 46 12.1%
I ~";o;...-:~___""""",,_1Jb ;;!ij""... "'.._~ "";c.,,,.,;'~_
12.0% 203 46 22.7%
10.6% 171 17 9.9%
12.5% 153 31 20.3%
3~7% 'W>"ml~'~5.60/o -
54 3
30.1% 112 45 40.2%
33.7% 99 i3.8, l(6~ _.....
~m
7.9% 53 6 11.3%
10.0% 3 0 0.0%
24.5% 126 28 22.2%
20.6% 353 92 26.1%
23.5% 265 86 32.5%
25.3% 311 86 27.7%
20.8% 172 34 19.8%
17.8% 138 35 25.4%
5.9% 6 1 16.7%
25.9% 199 62 31.2%
18.3% 328 73 22.3%
23.8% 14 ....5 35.7%
5
FORECLOSURES AND SHORT SALES
IN THE TWIN CITIES HOUSING MARKET
Q2 2008 UPDATE
Appendix A: MLS Area Breakdown
July 2008 Inventory of Homes for Sale
MLS Area
630 - Northfield
632 - Rice County
640 - Shako pee
642 c'Pri8rLake
~~~~~.~~~gei
646 - Jordan
648 - New Prague/New MarkeVElko
650 - Belle Plaine
658 - Le Sueur County
~pdhut;'8(jynir....
Falcon H9hts/.k~uderdale/~oseville
705 - Lino,b~~~~HNugo/C~.]t~~!!:
706 - North Central Surburban
707 - Ham Lake
708 - White Bear Area
~d~,,~'i=orest La[~ e.r~a; y"" -
710 ':'NortheastAnoka
711 c~p,l!th~m Chisago County
712 - Maplewood/North SI. Paul
713 - Bethel
714 - SP-Phalen
'?ni':' SP-'HillcresUm'zel Park/Dayton'S ~Bluff
720 - SP':Southeast SI. Paul
721-.. La~elandIAfton/Den f)1ark
722 - Newport/SI. Paul Park/Cottage Grove
725 - Pine Springs/Lake Elmo/Oakdale
726 - Woodbury
'W"'''i&' "";; ~"i"- Wi
727 - Stillwater/Bayport
72.~ ,~,.~e-.R-i!~erview./Cherokee
738" SPcH6me. Cl'oft.Ml7Th' .'
'7'_,;.<<,~,~c;;,%h;"","""""';'1X"iill,,,_;~.3h, k:c":/+,;:","""",,,,,, ,~~.
740 - SP-Crocus Hill
741 - SP-Downtown/Capitol Heights
742 - SP-Central
_ ~ j'Yi'.Y'!Pl)!lN!r,~c~;
744 ':SP-CClrno
l~~~!:~~~StJA~m~~Y{~idWay
71.82 SP- TOWn~,&g2!lnt!y/Me~dam Park
750 - SP-MaclGroveland/River Road
752 - SP-Highland Area
754 - Lake Township
769 - Anoka
770 - Hilltop/Columbia Heights
771 - Spring Lake Park
772"':. Lexington/Circle "Pines
780 - Sherburne County
782 - Isanti County
I~~; ~~rnJ?l!.~g~"iY'"
328
419
476
506
301
377
118
252
'418,",0
220
359
234
151
446
343- ~
77
561
404
144
326
510
87
75
381
300
637
550"
~.~.5~:" m
179
148
259
{li:1&'99::}' mi'
119
52
112
113
288
,333
285
279
364
612
252
,'242
581
211,
147
204
41
522
444
142
@ 2008 Minneapolis Area Association of REAL TORS@.
. .
~ . . .
22
63
112
83
64
18
97
25
30
30
22
{f.o:.99r<~
25
30
71
~82
18
122
109
33
153
24
9
114
65
124
57
54
25
6
132
13
24
7
6
14
88
104
75
82
89
144
23
41
188
69
51
76
15
18
112
137
30
'"
6.7%
15.0%
23.5%
16.4%
21.3%
21.7%
25.7%
21.2%
11.9%
7.2%
10.0%
2~1"10
10.7%
19.9%
15.9%
23.9%
23.4%
2~.;.7"10
27.0%
22.9%
46.9%
43.5%
27.6%
12.0%
29.9%
21.7%
19.5%
10.4%
42.2%
'k~2.1%
14.0%
4.1%
51.0%
13.1%
20.2%
13.5%
5.4%
12.4%
30.6%
31.2%
26.3%
29.41'0
24.5%
23.5%
9.1%
'16.9%
32.4%
32.2%
,,---'
34.7%
37.3%
36.6%
26.5%
21.5%
30.9%
_ 21.:'%
^
MINNEAPOLIS AREA Association
of REALTORS.
14
34
80
47
33
10
42
16
10
26- ...
19
41
16
22
41
-!al" Ml
39
7
77
55
27
69
145
20
11
87
48
91
41
24
~3_ __ 't.
17
12
115
15 -
18
13
6
12
69
64
37
41
-",,-,~,~,..
55
83
24
33
130
~ ~ -- -
20
50
13
12-
117
60
21
II
II II:
105
154
263
179
155
27
143
47
61
148
151
175
95
53
204
133
28
186
200
56
156
274
49
34
268
148
457
187
51
54
-
81
72
166
I
83
61
110
112
152
150
86
1P~
153
334
147
161'
293
110
67
127
33
38
234
162
5z',
. .
13.3%
22.1%
30.4%
26.3%
21.3%
37.0%
29.4%
34.0%
16.4%
-, ""17.6%
12.6%
...J~(o H_
16.8%
41.5%
20.1 %
~ 29.3oi....
25.0%
_.- 41.4!0
27.5%
48.2%
44.2%
... - "'S2,goi.,
40.8%
32.4%
32.5%
32.4%
19.9%
... 2i9%~~
47.1%
__H.6."!,!?...
21.0%
16.7%
69.3%
- 1-5:30/0
21.7%
. ~ ~1~3"10
5.5%
1 0.7%
45.4%
42.70;'-
.43.0%
..3!.~_
35.9%
24.9%
16.3%
44.4%
3.!l.9~.__.
29.9%
39.4%
39.4%
31.6%
50.0%
37.0%
36.8%
<<'!"#~~._......
6
FORECLOSURES AND SHORT SALES
IN THE TWIN CITIES HOUSING MARKET
QZ zo08 UPDATE
Appendix B: Municipality Breakdown
City
Afton
Albertville
AI~i?n lownship
Andover
An~aridale
Anoka
IAPPle Valley
Arden Hills
Baldwin Township
',S;)ypbrr' ~M
~aytown
Becke~"",
Becker Township
Belle Plaine
Bethel
SlgLake .. "'..
"". .,*"
Big LakeTo~l1ship ,.,
.BirchWOPQ:)(illage
Blaine
Bloomington
Blue Hill Township
Brooklyn..C:~l1ter '*
Brooklyn park
Burns Township
Burnsville
Cannon Falls
Carver .... ,,',
Ce~ar,\;~~e,lOwnshiP
C~h!,er City;
Centerville
Champlin
Chanhassen
^
MINNEAPOLIS AREA Association
of REALTORS'
II;
"
"
II:
. - . -
- . . . . .
29 3 10.3% 10 2
95 23 24.2% 60 23
5 1 20.0% 5 0
359 86 24.0% 153 54
86 6 7.0% 35 10
;X 141 49 3H,% 66 21
~
502 126 25.1% 309 85
50 5 10.0% 31 6
31 13 41.9% 14 8
3 11.5% 9 1
15 5 33.3% 4 0
~~".," 16 16.2% 1.1 17
m
32 5 15.6% 8 4
117 25 21.4% 49 16
12 4 33.3% 7 2
209 74 35.4% 139 64
53 10 18.9% 10 3
7 1 14.3% 3 1
612 145 23.7% 335 83
567 88 15.5% 384 86
9 1 11.1% 5 2
375u "176 46.9% 115- 65
945 392 41.5% 422 189
216 ~1 23,-ii% 110 34
...~'_.... _"__
33 8 24.2% 7 3
522 123 23.6% 265 87
74 7 9.5% 28 3
41 7 @17.1% 30 '"'7
22 4 18.2% 11
29~ 3 15.0% 3 1
39 10 25.6% 27 10
197 60 30.5% 104 29
252 27 10.7% 171 18
246 31 12.6% 150 29
1 1 100.0% 3 1
~:~ 12", ..,...."" 3'~~.'0iZ'm 19 .5.
~ >Iitl..-:""""",,,,,,,
45 5 11.1% 5 3
58 12 20.7% 26 11
42 3 7.1% 20 3
"" 2~
44 6.8% 11
56 5 8.9% 22 2
w~w!t,_ ~3 9.4% 1
203 76 37.4% 126 50
25 4 16.0% 10 2
583 188 32.2% 293 131
36 3 8.3.).~ 9 0
20 1 5.0% 2 0
289 81 28.0% 213 59
4 0 0.0% 2 0
42 4 9.5% 5 1
209 63 30.1% 136 41
26 ;% 30.8% 11 "it ... :r
8
46 2 4.3% 23 2
30 4
Chisago Lake Township
Circle Pines
Clear Lake
W~:-Y11~'"
Clearwater
Cokato
Columbia Heights
Columbus
Coon Rapids
Corcoran .,
Corinna Town~hip
Cottage Grove
Credit River
Credit River Township
Crystal
B'aYtbriT:"""'"''
lJeephaven
Delano
@ 2008 Minneapolis Area Association of REAL TORS@.
20.0%
38.3%
0.0%
35.3%
28.6%
._",,3~~
27.5%
19.4%
57.1%
11.1%
4.1 :5%
50.0%
32.7%
28.6%
46:00/.
30.0%
3P:~
24.8%
22.4%
40.0%
56:"5% ~ ~
44.8%
10.9!! m
42.9%
32.8%
10.7%
--'2i3%
9.1%
33.3%
37.0%
27.9%
10.5%
19.3%
33.3%
-ol._~.~~
60.0%
42.3%
15.0%
39.7%
20.0%
44.7%
0.0%
0.0%
27.7%
0.0%
20.0%
30.1%
18.2%
8.7%
13.3%
J
7
FORECLOSURES AND SHORT SALES
IN THE TWIN CITIES HOUSING MARKET
Q2 2008 UPDATE
Appendix B: Municipality Breakdown
City
Dellwood
Denmark Township
Dundas
Eagan
East Bethel
Farmington
Fish Lake Township
Forest Lake
Fra~cioniai T o~ri~h!P'
~ri,dley
Golden Valley
Goodhue
Grant
Greenfield
Hanover
Harris
Hassan Township
Hastings'
II;
18
16
18
478
138
_ 2,95
491
329
68
~38w
349
25
258
17
213
1~5ii
16
33
48
20
152
10
41
26
16
63
9
17
17
104
150
49
62
32
17
120
8
70-
687
^
MINNEAPOLIS AREA Association
of REALTORS.
II
II;
II
. . . .
1 5.6% 6 2 33.3%
1 6.3% 2 0 0.0%
2 11.1% 21 2 9.5%
99 20.7% 353 92 -26!;P1.
32 23.2% 49 25 51.0%
78 1 ~.1Jo ~.83 47
"",7""""
26 5.3% 285 26
104 31.6% 148 65
26 38.2% 47 16
1 2.6% 16 -0"".
3 9.7% 16 1
30 10.6% 117 26
89 25.5% 193 63 32.6%
6 24.0% 2 0 0.0%
57 22.1% 103 28 27.2%
3 17.6% 5 2
68 31.9% 111 34 30.6%
17 10.2% 100 13 13.0%
1 6.3% 3 2 66.7%
2 6.1% 7 4 57.1%
11 22.9% 21 10 47.6%
2 10.0';; 5 1 20.00/:
30 19.7% 52 21 40.4%
,,30.0Jo '.#&!h~, ~ _III ;ol\>>7.~;;; _5.0",20/0 ...
9 22.0% 21 9 42.9%
8 30.8% 13 5 38.5%
3 18.8% 3 0 0.0%
17.3% 141~'- _iJ'JI'""'0'~ 25.50/0
42 36
1 16.7% 3 0 0.0%
24 2Q.2% 65 18 27.7%
6 15.8% 14 5 35.7%
49 27.8% 87 19 21.8%
2 5.1% 3 3 100.0%
68 24.5% 129 29 22.5%
17 21.8% 27 10 37.0%
4 ~5O/~ 1~~ 2 _13.';Wo.
~,="",,!l>I' ~--
5 7.9% 26 6 23.1%
1 11.1% 13 7 53.8%
4 23.5% 6 1 16.7%
18.7% -.. io/''*"-!21l':S%''!!
97 335 69
1 12.5% 7 1 '14:3%
58.~'(:'0_ 11 1 "9.1%
...~, ~~_ .;ti_
1 5.9% 3 0 0.0%
21 20.2% 33 12 36.4%
34 22.7% 61 12 19.7%
12 24.50/0 *16 4" - 25:00/0
9 14.5% 23 2 8.7%
7 21.9% 11 4 36.4%
1 5.9% 10 1 10.0%
31 25.8% 36 8 22.2%
1 12.5% 8 1 12.5%
4 5.7% 38 8 21.1%
101 14.7% 432 64 14.8%
,13 4 30.8,%
8
-~~- -~ -- ----~
@ 2008 Minneapolis Area Association of REAL TORS@.
FORECLOSURES AND SHORT SALES
IN THE TWIN CiTIES HOUSING MARKET
Q2 2008 UPDATE
^
MINNEAPOLIS AREA Association
of REALTORS.
Appendix B: Municipality Breakdown
July 2008 Inventory of Homes for Sale
Q1 & Q2 2008 Home Sales
City
lender-
Total Mediated Share
Maple Plain 13 1 7.7% 3
Maplewood 308 79 25.6% 159
Marine On St Croix 28 2 7.1% 3
12 2 16.7% 5
48 5 10.4% 19
w~81 8 ,~9~9% 25
Mendota Heights 109 9 8.3% 49
Minneapolis 3,298 954 28.9% 2,439
Minnetonka 492 52 10.6% 239
Miililetrista 132 13 9.8010 43
;"
Monticello 146 44 30.1% 91
M2Pti~EtJ!9 11 1 9.1% 3
Montrose 77 21 27.3% 27
Morristown 21 1 4.8% 4
Mound 197 33 16.8% 41
'Mounds 56 19 33.9% 35
Nerstrand 11 3 27.3% 2
J:lessel Township 24 4 16.7% 2
New Brighton 124 20 16.1% 80
New Hope 152 38 25.0% 81
New Market Township 17 2 11.8% 6
- " 22.4%
19 69
7.7% 3
21.9% 17
.,r;;wAlf)kllll': ~
North Branch 47 30.1% 67
North Oaks 2 3.4% 20
North St Paul 26 28.6% 42
N6rthfi~id 19 - ~4% -85
9 17.6% 21
30 25.4% 33
Oak Park Heights 38 11 28.9% 18
Oakdale 240 60 25.0% 121
Orono 181 9 5.0% 40
Orro!:kToWnship' . 19 4 21.1% 8
sseo 17 3 17.6% 13
,qtli~g~ ,,__ ~5Q " 35.6% 19.0~
_ "~ft~,,Bl;._.~o<=.;r~
Pine Island 21 1 4.8% 22
Plymouth 576 54 9.4% 382
Princeton 52 13 25.0% 83
PriOr Lake 437 75 17.20/0 165~
Ramsey 282 83 29.4% 158
~and~ol~h 4 40.0% 3
Red Wing 202 16 7.9% 86
Richfield 241 67 27.8% 180
Robbinsdale 186 54 29.0% 70
'Rockford -~4ir 6 12.5% 20
Rockford Township 12 3 25.0% 3
Rogers 118 26 22.0% 61
Rosemount 239 49 20.5% 177
Roseville 181 20 11.0% 125
Rush City 75 11 14.7% 23
Savage ii&""",;<;- 21.3%
64 157
Scandia 1 2.9% 8
Shafer 24.0%. 14
@ 2008 Minneapolis Area Association of REAL TORS@,
--------.--
1
37
o
2
4
o
5
678
33
8
29
1
5
o
10
12
o
2
$I
17
27
o
22
1
,~;--
31
3
18
16
5
14
8
39
5
3
5
41 .........._
o
36
42
45
42
1_
18
34
14
6
o
13
39
17
5
33
2
8
. .
33.3%
23.3%
0.0%
40.0%
21.1%
0.0
10.2%
27.8%
13.8%
18.6%
31.90;"1;t
33.3%,
iI!lIio.a~
18.5%
0.0%
24.4%
34.3%
0.0%
100.0%
.1,-b
21.3%
33.3%
0.0%
31:9%
33.3%
_ _5.t~:t._b'-'
46.3%
15.0%
42.9%
-- ~/18.8%~
23.8%
,42.4%
44.4%
32.2%
12.5%
37.5%
38.5%
..-27.3%._
0.0%
9.4%
50.6%
27.3%
26.6%
33.3% .
"';~",~ ,., ""'"...~
20.9%
18.9%
20.0%
30.0%
0.0%
21.3%
22.0%
13.6%
21.7%
21.0%
25.0%
.!iJ.1"1o
9
FORECLOSURES AND SHORT SALES
IN THE TWIN CITIES HOUSING MARKET
Q2 2008 UPDATE
Appendix B: Municipality Breakdown
July 2008 Inventory of Homes for Sale
City
Lender-
Total Mediated Share
Shakopee 110 23.5%
Shoreview 18 8.9%
Shorewood 9 9.5%
1 6.3%
1 7.1%
58 33.7%
2 13.3%
16 38.1%
3 17.6%
+":''1>> - 6- 21.4%
60 2 3.3%
55 2 3.6%
St Cloud 67 4 6.0%
St Francis 129 36 27.9%
St Louis Park 365 38 10.4%
StMichae 231 38 16.5%
StPa 2,191 701 32.0%
St Piiu 59 26 44.1%
Stacy 34 12 35.3%
Stillwater 296 22 7.4%
Stillwater Township 12 2 16.7%
Sunfi~sh'Lake';w 1 10.0%
Sunrise Township 1 33.3%
rayl2.rsJ"~= .,
Tonka Bay 13.0%
Vadnais Heights 13.4%
Victoria 4.7%
Waconia 10.6%
Wanamingo "^1 7.7%
Watertown 65 7 10.8%
Waverly 55 11 20.0%
Wayzata 63 3 4.8%
Webster 12 5 41.7%
Welch 6 1 16.7%
West Lakeland 16 3 18.8%
YY~~sl~k&a.!)q,t:L'''i 31 ~ ,:1 12.9%^
<.. >ill; ,;Jlii.~YAi +_~..if~,*;k~ ('ill\<
West St Paul 134 40 29.9%
White Bear Lake 212 37 17.5%
White Bear Township 96 18 18.8%
*"
16 4 25.0%^^
636 124 19.5%
42, 17 3I.8%
Wyoming Township 35 6 17.1%
Zimmerman 144 47 32.6%
Zumbrota 39 1 2.6%
@ 2008 Minneapolis Area Association of REAL TORS@.
^
MINNEAPOLIS AREA AssociOltion
of REALTORS.
Q1 & Q2 2008 Home Sales
260
115
41
3
12
98
2
30
3
4
48
15
257
44
303
98
1,369
36
23
126
3
3
2
9
8
54
54
91 - ~="'tii_
4
31
13
21
19
2
3
9 _ __ _ ~
111
114
33
3
455
1Et~ ~
9
97
15
80
18
8
1
3
32
o
11
1
o
5
4
45
19
29
32
489
18
8
27
o
o
1
4
o
11
3
17
1
13
3
4
1
1
2
1
45
22
4
~ 1"
91
5
3
58
o
. .
30.8%
15.7%
19.5%
33.
25.00/.
32. 7.%~^""i""tiii
0.0%
36.7%
33.3%
0:00/;''';
10.4%
26.7%
.. :;lflI:
17.5%
43.2%
9.6%
;~'
50.0%
34.8%
21.4%
0.0%
w ~ ~o~o%~
50.0%
...., _~ i<i'~44:.1:rlwf,*,;'f'
0.0%
20.4%
5.6%
18.7%
25.0%
41.9"(0
23.1%
19.0%
5.3%
50.0%
66.7%'
.~ 1 tt%,.,
40.5%
19.3%
12.1%
~ "l!Il"''''''
33.3%
20.0%
!1;.3%
33.3%
59.8%
0.0%
10
POSTSCRIPT:
A FINAL NOTE ON METHODOLOGY
There is currently not a "one-size-fits-all" database definition of what a "foreclosure" or "short sale" is. As
such, there is not yet a neatly organized data marker in the RM LS system which flags these properties. So,
to identify which homes were lender-mediated and which were not, we searched through the subjective
remarks that REALTORS@ employ when listing properties.
Through extensive research-as well as quality cross-checking with other data sources-these 20 phrases
were identified as commonly indicative of a foreclosure or short sale property in the RMLS system, including
a few misspellings:
· Bank owned
. Short sale
· Bank approv
. Lender approv
· 3rd party approv
· Foreclosure
. Preforeclosure
. Forclosure
· Preforclosure
. Subject to bank
. Subject to 3rd
. Subject to lender
. Redemption
. Shortsale
. REO
. Hud acquire
. Subject to corp
. Corporate owned
. Corp owned
. Corp. owned
With these terms as our guide, we were able to create an automated data procedure to separate properties
which were flagged with these terms from those that were not, forming their foundation of our analysis.
Therefore, it should be noted that this is not foreclosure data, nor should it be construed as such. Rather,
this is simply a measurement of reported instances of terms commonly used to describe foreclosures and
short sales in the RM LS system.
RMLS has now created a data field called "In Foreclosure/Bank Owned," but this field was not active during
the second quarter of this year. Future reports will take this new field into consideration alongside the subjective
remarks listed above.
@2008 Minneapolis Area Association of REALTORS"
11
CD'^- Dakota County
. .. ..community Development Agency
. . ... .. ..... .................
..~
oWNfR's"ffIP'
C()ftlteC:titJ~
MEMO
July 14, 2008
TO: Dakota County Cities
From: Dan Rogness, Director of Community Revitalization
Re: Foreclosure Update
Some of you may have heard about "upside-down" mortgage holders in the news recently.
These are struggling home owners who owe more than their homes are worth. The CDA's
foreclosure prevention counselors are seeing these situations nearly every day within Dakota
County. In fact, an estimated 9 million homeowners are upside-down in the United States,
according to Moody's economy.com, a division of Moody's Analytics.
Consider this recent example in Dakota County:
City: Farmington
House: 1998 single-family split; 2,500 square feet
Purchased: March 2007 for $320,000
Current County Estimated Market Value: $279,800 (payable 2009)
Sheriff Sale: May 2008 for $336,740
One way for a homeowner to solve this dilemma is through a "short sale," which will result in a
sale price that is less than the amount owed on the loan. Any liens must agree to the lower
amount as full satisfaction of the mortgage. Junior liens may also ask the former home owners
to enter a repayment agreement for the portion of the loan not paid through the sale.
In other information, please note that the May Notice of Pendency numbers have been updated
since the June E-news was sent. Notice of Pendency's for the last week of May were
inadvertently not counted last month. We apologize for any inconvenience this may have
caused.
Dakota County Stats - June 2008
. # of Sheriff Sales in June - 176 (compared to 89 in June 2007)
. Total Sheriff Sales for 2008 - I, I 06 (compared to 668 Jan.-June, 2007)
. # of Notice of Pendency's Filed in June - 259
. Total Notice of Pendency's Filed for 2008 - 1,404
CD~ Dakota County
· ... ..>..... Community DevelopmentAgency
.. .. ... .. .. .. ..... .... ...... ........
...~
oWNfR'S"ffIP'
Cb~U;fV
A Notice of Pendency is filed by a mortgage company's attorney as official notification that the
foreclosure process has begun. Not all of these result in sheriff sales. Pages 3 and 4 of this PDF
file have statistics for each city of Sheriff Sales and Notices of Pendency.
Mapping Using Dakota County GIS
http://gis.co.dakota.mn.us/website/dakotanetgis/
The Dakota County Office of GIS is updating the 2008 Foreclosures and Notice of Pendency
layers on a monthly basis. If you need assistance using this Web page, please call Randy Knippel
or Mary Hagerman with the Office of GIS at (952) 891-7081.
In The News
Provided in this PDF file are a few notable foreclosure articles that were published in the last
month. Among the points of interest:
. With the resetting of adjustable-rate mortgages, the mortgage foreclosure crisis is
poised to continue through 2008 and into 2009. Forty percent of more than 50,000
subprime loan payments will increase this year.
. Additionally, foreclosures and delinquent payments were the highest on record going
back to 1979 during the first months of 2008. Slumping home values have caused
Americans' home equity to drop to the lowest level on record in figures going back to
the end of World War II.
. An article on the economic plight of Dakota and Scott County residents. Along with
mortgage foreclosures, food shelf visits are also on the rise. Combined with falling
property values, the trends suggest that budget preparations will be uncommonly
turbulent this fall in the east-metro suburbs.
. The FBI has ordered more than two dozen of its field offices, Minnesota among them, to
stop investigating some financial crime so agents can focus on the mortgage fraud
involved with the subprime crisis. Last fiscal year, which ended Sept. 30, the FBI received
almost 47,000 so-called Suspicious Activity Reports detailing potential mortgage crimes.
In the first half of 2008, already 38,000 reports have been documented.
. A national story on creative tactics cities are using to stop foreclosures and keep
owners in their homes. With projected economic losses of $166 billion this year for 361
metropolitan areas, some cities are suing lenders. Minneapolis is one such city currently
engaged in this type of litigation.
If you have any other concerns, please call me at (65 I) 675-4464 or send me an
email atdrogness@dakotacda.state.mn.us.
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Home mortgage 'reset' shock to hit suburbs
Page lof3
starTribune.com I MINNEAPOLIS - ST. PAUL, MINNESOTA
Home mortgage 'reset' shock to hit suburbs
By MIKE MEYERS, Star Tribune
June 1, 2008
The foreclosure crisis in Minnesota continues and is now poised to spread from cities to
suburbs.
In large swaths of the Twin Cities and across the state, 40 percent of more than 50,000
subprime loans will jump to higher payments this year. Another 22 percent will reset after
this year.
In Twin Cities suburbs, where home construction once boomed, hundreds of square
miles are dotted with the homes of tens of thousands of subprime borrowers who will skid
into higher monthly payments in 2008. Seventy-seven percent of such loans were taken
out after 2004.
Older, urban neighborhoods have already seen a cascade of foreclosures in recent
months. Declining interest rates could provide a respite for some, but the breather on
higher payments may be short-lived.
"Foreclosure rates, certainly for 2008, will remain high and, in some places, at historical
levels," said Michael Grover, an author of a new study published by the Federal Reserve
Bank of Minneapolis. "We certainly are not out of the storm."
Indeed, by one measure, the study may understate potential economic troubles ahead for
tens of thousands of Minnesota homeowners. The numbers in the Fed study, supplied by
First American LoanPerformance, encompass most -- but not all -- subprime mortgages,
note authors Grover and Andreas Lehnert, an economist with the Federal Reserve board
of governors.
The figures include an estimated 70 percent of all Minnesota subprime mortgages and 95
percent of "A It-A" mortgages -- home loans that didn't require proof of income, demanded
little or no money down or were otherwise unconventional.
In the universe of subprime loans, only about 59 percent of subprime loans were current,
as of October 2007, the Fed study found. Almost 87 percent of Alt-A loans were current.
"Some have spread rumors that the foreclosure crisis is on its last legs," said Brandon
Nessen, executive director of Minnesota ACORN, a nonprofit organization that counsels
financially troubled homeowners.
"From where we sit, the foreclosure crisis is going to continue through 2008 and into
2009," he said.
Falling rates help
To be sure, falling interest rates in the last several months should offer some help to
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6/12/2008
Home mortgage 'reset' shock to hit suburbs
subprime borrowers facing mortgage resets.
Page 2 of3
The average reset will bump up interest payments about a full percentage point, as of
May 2008, compared with about 3.5 points at the same time a year earlier, Grover
calculated.
Nevertheless, consumer advocates advising financially strapped homeowners note that
resets are not a one- time event.
Many clients at Twin Cities Habitat for Humanity have seen their payments fall in their
first reset in the last few months, said Cheryl Peterson, the group's program manager for
mortgage foreclosure prevention.
"A couple of our clients said, 'My interest rate didn't go up, so I don't have to worry about
it,'" Peterson said. But she said that's not so. "For the rest of the loan, it has the ability to
go up as much as five points," she said.
Indeed, many adjustable-rate subprime loans change every six months. Some are
altered every month, leaving homeowners vulnerable to rate increases in the months and
years ahead.
Simply refinancing is not an option for many subprime borrowers, either because lenders
have tightened lending standards or because the market value of their homes has fallen
substantially in the last year or two.
That makes more foreclosures inevitable, in the view of experts. What's more, as the
number of empty houses rises, the market value of homes -- and entire neighborhoods --
could fall.
"Often people describe a wave of foreclosures," Grover said. "Arguably, in parts of the
Twin Cities, the wave already has gone through."
The number of scheduled subprime resets within the borders of Minneapolis and St.
Paul, for instance, is overshadowed by subprime resets in the suburbs. But that may be
because many urban subprime loans hit the rocks before monthly payments rose.
Food or mortgage
Sharon Young, a homeowner on the East Side of St. Paul, knows the dilemma all too
well.
Young, 42, and her husband, Waverly, 46, were renters until they bought their first house
three years ago. They bought an adjustable-rate mortgage that started with payments of
$1,679 a month. In March 2007, the monthly payment was reset to $2,218.
The couple, with a combined gross income of $77,000, couldn't manage the $539
monthly increase. Young handles patient health claims for a local hospital. Her husband
is a maintenance worker.
"Our mortgage company refused to negotiate," she said. The lender also wouldn't accept
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6/12/2008
Home mortgage 'reset' shock to hit suburbs
any payments less than the full monthly amount owed.
Page 3 of3
As a result, Sharon said she quit making payments a year ago and expects to lose her
home to foreclosure this summer or fall. Paying for food, utilities and other expenses
demanded much of the extra $539 a month the mortgage lender demanded.
"We rob Peter and Paul doesn't get paid," she said.
Refinancing is out of the question. Young and her husband bought the house for
$250,000. A recent appraisal put its value at $170,000.
Young's assessment of home ownership: "It was a disaster."
Mike Meyers. 612-673-1746
@ 2008 Star Tribune. All rights reserved.
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6/12/2008
Foreclosures surge to a record high - late payments, too, signaling worse to come
Page 1 of3
starTribune.com I MINNEAPOLIS - ST. PAUL, MINNESOTA
Foreclosures surge to a record high - late payments, too,
signaling worse to come
By JEANNINE AVERSA, Associated Press
June 5, 2008
WASHINGTON - The foreclosure hammer is hitting ever harder. People lost their homes
at the highest rate on record in the first three months of the year, and late payments
soared to a new high, too - an alarming sign that the housing crisis and its damage to
the national economy may only get worse.
Dumping more empty homes on an already glutted market also is likely to put a further
drag on home prices - extending a vicious cycle.
Slumping home values are being blamed in large part for the rising tide of foreclosures.
Troubled borrowers are left owing more to the bank than their homes are worth. They
can't sell without taking a huge financial hit, so they just walk away.
In fact, Americans' equity in their homes - usually their single biggest asset - now has
dropped to the lowest level on record in figures going back to the end of World War II.
Homeowners' portion of equity fell to 46.2 percent, which means the amount of debt tied
up in their homes exceeds the equity they have built up.
Watching their home values sink, consumers have pulled back on spending, a factor in
the economy's slowdown. Buoyed by rebate checks, shoppers did get back in the buying
groove in May, but analysts predict that consumers - pounded by galloping gasoline
prices - will still be cautious.
"The economy is treading water, and the housing market is one of the undercurrents
trying to pull it down," said Stuart Hoffman, chief economist at PNC Financial Services
Group.
Nearly 1 percent, or roughly 447,723 loans, fell into foreclosure during the January-to-
March period, the Mortgage Bankers Association said Thursday in its quarterly snapshot
of the mortgage market. That surpassed the previous high of 0.83 percent over the last
three months in 2007.
The report also found that more homeowners slipped behind on their monthly payments.
The delinquency rate jumped to 6.35 percent - or 2.87 million loans - compared with
5.82 percent for the previous three months. Payments are considered delinquent if they
are 30 or more days past due.
Both the rate of new foreclosures and late payments were the highest on record going
back to 1979.
With prices expected to keep dropping, foreclosures and late payments "are going to
continue to go up," Jay Brinkmann, the association's vice president of research and
economics, told The Associated Press.
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Foreclosures surge to a record high -late payments, too, signaling worse to come
Page 2 of3
Homeowners with tarnished credit who have subprime adjustable-rate loans took the
hardest hits. Foreclosures and late payments for these borrowers also swelled to all-time
highs in the first quarter.
The percentage of subprime adjustable-rate mortgages that started the foreclosure
process climbed to 6.35 percent. The rate was 5.29 percent in fourth quarter, the
previous high. Late payments rose to 22.07 percent from 20.02 percent, the previous
high.
The association's survey covers just over 45 million home loans.
More problems also cropped up with loans to more creditworthy borrowers.
The percentage of such loans falling into foreclosure was 0.54 percent, compared with
0.41 percent at the end of last year. Late payments rose to 3.71 percent from 3.24
percent.
The numbers were higher for those prime borrowers with adjustable rate mortgages.
Initially low rates reset to much higher ones, making it difficult, if not impossible, for
homeowners to keep up with monthly mortgage payments. The proportion of those loans
falling into foreclosure jumped to 1.55 percent from 1.06 percent. The delinquency rate
rose to 6.78 percent, compared with 5.51 percent.
"The number one problem is the drop in home prices," Brinkmann said. Declining prices,
especially in newer built areas, "are hurting people's ability to recover when they run into
trouble - a divorce or loss of job," he said. "In other days, you could sell the home. But
because home prices have fallen so much, in many of those cases, the homes are going
into foreclosure."
California, Florida, Nevada and Arizona accounted for 89 percent of the total increase in
new home foreclosures, he said. Those are places where prices have fallen sharply and
there was a lot of home building, creating too much supply, Brinkmann said.
"These extra inventories from foreclosures complicate what is already a heavily built
situation," said David Seiders, chief economist at the National Association of Home
Builders.
After a five-year boom, the housing market fell into a deep slump two years ago. That
dragged down sales, and prices with it. As the value of homes plummeted, many newer
homeowners found themselves owing more on their mortgages than their homes were
worth.
Nearly 8.5 million homeowners had negative or no equity in their homes at the end of
March, representing more than 16 percent of all homeowners with mortgages, according
to Mark Zandi, chief economist at Moody's Economy.com. He estimates that will increase
to 12.2 million, or almost one out of every four homeowners, by the end of June.
Nearly three in 10 people say they are worried their home's value will decline over the
next two years, according to a recent Associated Press-AOL Money & Finance Poll. Sixty
percent said they definitely won't buy a home in the next two years. That's up from 53
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6/12/2008
Foreclosures surge to a record high - late payments, too, signaling worse to come
percent two years ago.
Page 3 of3
As foreclosures and late payments climbed, financial companies took multibillion-dollar
losses when their investments in mortgage-backed securities soured. A credit crisis
spread, crimping other types of financing. The fallout plunged Wall Street in turmoil,
disrupting the normal functioning of markets.
All those troubles have pushed the economy to the brink of a recession. Employers,
cutting costs, have eliminated more than a quarter-million jobs in the first four months of
this year.
To bolster the economy, the Federal Reserve made aggressive interest rate cuts. But
with inflation on the rise, Fed Chairman Ben Bernanke this week sent his strongest signal
yet that the central bank's rate-cutting campaign is coming to an end.
The Bush administration has urged lenders to freeze rates for some homeowners and
encouraged lenders to rework mortgage terms so troubled borrowers can stay in their
homes.
A congressional plan that includes a foreclosure prevention program has stalled as
lawmakers figure out how to pay for it.
Associated Press Business Writer J.W. Elphinstone contributed to this report.
On the Net:
Mortgage Bankers Association: btlP:{!~'nmb~~.QJg!
@ 2008 Star Tribune. All rights reserved.
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6/12/2008
'A new sense of desperation in the people we're seeing'
Page 1 of2
starTribune.com I MINNEAPOLIS - ST. PAUL, MINNESOTA
'A new sense of desperation in the people we're seeing'
By KEVIN GILES and DAVID PETERSON, Star Tribune staff writers
June 7, 2008
More residents are broke and hungry in Washington and Dakota counties, with signs of
their distress appearing in sheriff sales, overdue bills and a scramble to find money for
food and rent.
"There's kind of a new sense of desperation in the people we're seeing," said Dan Papin,
Washington County's director of community services.
"They're seeking help from the government as well as in the community."
Combined with falling property values, the trends suggest budget preparations will be
uncommonly turbulent this fall in east-metro suburbs, with homeowners expecting relief
from taxes even as demands for public assistance are rising.
"We're very concerned about some of these trends," Nancy Schouweiler, Dakota County
board's chair, told staff members who pulled together about 100 pages of updates on the
county's condition as a prelude to thinking about tax rates and budget demands.
Food shelf visits and mortgage foreclosures -- both sharply on the rise -- are "leading
indicators" of a bigger picture, said Dakota County researcher Jane Vanderpoel.
In Washington County -- more affluent than Dakota, with a 2006 median household
income of $76,000 compared with Dakota's $71,000 -- the strain is evident everywhere
as people seeking assistance cope with the further burden of gas prices nearing $4 a
gallon, Papin said.
"Mostly they're just forced to make unpleasant choices," he said.
Dakota County, with more older, inner-ring suburbs than Washington and Scott counties,
seems to have a markedly higher rate of poverty. The rate of free and reduced lunches
for Dakota County schoolchildren is 18.4 percent, compared with 14 percent in
Washington and 15.6 percent in Scott, according to statistics assembled by Washington
and Scott counties in response to the Dakota draft report.
Washington County's case load in food support, previously known as food stamps, grew
10 percent in the past year, Papin said, rising to 1,892 clients in March 2008. Meanwhile,
demands on food shelves continue to soar.
The latest figures from Hunger Solutions Minnesota show a 24 percent increase in the
number of visits to Washington County food shelves the first quarter of this year
compared with the same period in 2007. In Dakota County, that increase was 12 percent.
Eight food shelves in the two counties gave away 580,000 pounds of food during the first
quarter of this year.
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6/12/2008
'A new sense of desperation in the people we're seeing'
More families in trouble
Page 2 of2
In St. Paul Park last week, Friends in Need Food Shelf served a record number of
families in a single day: 93, said Director Michelle Rageth. Visits have jumped at Friends
in Need, which also serves Cottage Grove, Newport and Grey Cloud Island in south
Washington County. Almost all of the people coming to Friends in Need have jobs of
some type but can't pay the bills or recently lost jobs, Rageth said.
"We're seeing so many homeless people who are without electricity and phones," she
said. "They just have multiple issues to deal with."
Sheriff sales of foreclosed properties in Washington County are on a pace to double over
last year, said Kevin Corbid, the county's director of taxpayer services. Dakota doesn't
expect quite that big a jump, but is forecasting a rise to about 2,400, which is about 10
times as many as just five years earlier.
The hottest of hot spots for foreclosures in Dakota last year were in the older, inner ring
suburbs of West St. Paul and South St. Paul, and in the southern half of Apple Valley,
according to a map included with the report.
Rates of foreclosures per square mile varied immensely, analysts said, from less than 5
per square mile in parts of Lakeville, west Eagan and Inver Grove Heights, to more than
30 per square mile in the more troubled areas.
At Washington County's workforce center in Woodbury, the number of people using the
job resource room has more than doubled since 2006. In the latest trend, many of them
were laid off from smaller companies now feeling the pinch of a declining economy, said
Division Manager Robert Crawford. They tend to be higher-skilled workers, he said,
which means that lower-skilled workers have a diminished chance to find work in a tight
job market.
"It doesn't look like it's going to get better anytime soon," he said. "People are hurting."
kgiLt:l~@~J~rtriblJlJe-,com . 651-298-1554QP~te[~QlJ@~t~rtriblJlJSl.com. 952-882-9023
@ 2008 Star Tribune. All rights reserved.
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6/12/2008
FBI wants more action on mortgage fraud - TwinCities.com
Page 1 of 1
TwinCitiesecom
FBI wants more action on
mortgage fraud
Minnesota among field offices told to shift focus
to subprime crimes
By Robert Schmidt
Bloomberg News
Article Launched: 06/13/2008 12:01 :00 AM CDT
The FBI, confronting a surge in mortgage fraud, has
ordered more than two dozen of its field offices to
stop probing some financial crimes so agents can
focus on the subprime crisis.
Kenneth Kaiser, chief of the bureau's criminal
investigative division, issued the directive late last
week on a video conference call with the heads of 26
offices in areas where mortgage crime is rampant,
including Minnesota, said Bill Carter, an FBI
spokesman in Washington.
Carter said the shift was made after an analysis of
how agents are spending their time. The FBI
traditionally has moved investigators to address
urgent needs, he said. About 150 agents were
working on more than 1,300 mortgage cases before
the change.
"If you're seeing a significant crime problem, you
have to move resources," Carter said. "We've got a
big problem with mortgage fraud."
The cases, known as loan-origination fraud,
involve schemes to flip properties for a quick profit,
cheat banks or rip off homeowners facing
foreclosure. Targets of investigations can include
real estate agents, homebuilders, lawyers and
appraisers.
The subprime loan crisis sparked a collapse in the
credit markets and triggered almost $400 billion in
losses and write-downs on Wall Street. It also has
driven hundreds of thousands of families from their
homes as foreclosures hit record numbers.
The 26 field offices were told to temporarily
suspend opening new cases dealing with price
fixing, mass marketing, wire fraud, mail fraud and
environmental crimes, Carter said. Current cases
aren't being dropped, he said. The FBI has 56 field
offices and about 12,000 agents.
The affected FBI offices also are in Florida, Georgia,
California, Nevada, Arizona, Texas, New York, Ohio,
Michigan, Illinois and Indiana, he said.
FBI Director Robert Mueller told Congress in April
that he had seen a "tremendous surge" in cases
related to subprime loans, which are made to
borrowers with poor credit.
One measure of the increase: Last fiscal year, which
ended Sept. 30, the FBI received almost 47,000 so-
called Suspicious Activity Reports detailing potential
mortgage crimes, a 31 percent jump over the
previous year. In the first half of 2008, there already
have been 38,000 reports.
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o
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6/23/2008
Cities sue, invest to stop foreclosures - Mortgage Mess - MSNBC.com
A MSNBC.com
Page 1 of3
Cities sue, invest to stop foreclosures
Creative tactics to keep owners in homes; 'We can't wait' for the Feds
The Associated Press
updated 7:41 p.m. CT, Mon., June. 16, 2008
PHILADELPHIA - Just two months ago, Aaron Brokenbough had no clout and little say when lenders moved to
foreclose on his home. His Philadelphia row house was scheduled for a sheriff's sale, the end of the road for
most homeowners who are behind in mortgage payments.
That was before a Philadelphia court decided to step in with this unusual order: Sheriff's sales cannot go
forward without a last-ditch effort by the lender and homeowner to work out a deal.
The court also gave Brokenbough some muscle, matching him with a volunteer attorney and housing
counselor to take his side against his lender and their lawyers. Brokenbough feels a ray of hope.
"I'm overwhelmed," said the 36-year-old former mail processor, who fell behind on payments after he lost his
job and his wife incurred medical bills from a surgery. "I'm hoping to save my home."
Philadelphia is just the latest in a growing number of cities - including Los Angeles, Baltimore, and Trenton,
N.J. - that are taking matters into their own hands to help stop the nation's housing crisis within their
borders.
With more than a half-million foreclosed homes on the market, and over 3 million borrowers behind on their
mortgages, more cities are aggressively reaching out to residents and filing lawsuits against lenders.
While politicians debate in Washington, many cities are on the front lines of the foreclosure crisis: fielding calls
from desperate homeowners, and fighting vagrancy and crime around vacated properties.
"We can't wait on the federal government," said Douglas Palmer, mayor of Trenton, N.J., and the president of
the U.S. Conference of Mayors. "We're taking action."
Cities are under the gun to act: A report released by the U.S. Conference of Mayors last November projected
economic losses of $166 billion this year for 361 metropolitan areas. These stem from lost tax revenue and
jobs as well as slower consumer spending that come with home eqUity declines, and don't even include the
financial toll of increased crime, fires and building code violations.
To try to recoup part of that money, some cities are suing lenders. But it's not easy to go after federally
regulated companies.
In January, Cleveland took the public nuisance route and sued 21 major investment banks and lenders,
charging that their subprime lending practices devastated neighborhoods and hurt property values and city
tax collections. Baltimore sued Wells Fargo & Co., alleging a pattern of predatory lending practices in its
poorest neighborhoods. Minneapolis and Buffalo, N.Y. are engaged in similar litigation.
"Why would these mortgage lenders continue to enter deals with these people who they knew could not afford
their loans?" said Robert Triozzi, Cleveland's director of law. "To suggest (these financial institutions) didn't
know the consequences just defies logic."
He blamed Wall Street greed and said the players relied on a scheme that could only work if home prices
continued to rise.
"We're going to hold them accountable for actions they have done here," said Triozzi, who is seeking hundreds
of millions of dollars in damages.
Wells Fargo said the lawsuit has no merit.
"The city seeks to use a single financial services company as a scapegoat for broad social problems that have
plagued Baltimore for decades, including some caused by the city's own actions," Wells Fargo said in a
statement. "The mortgage industry, however, says it is taking action to try to stop the rising tide of
foreclosures. "
http://www.msnbc.msn.com/id/25195953/print/l/displaymode/l 098/
6/23/2008
Cities sue, invest to stop foreclosures - Mortgage Mess - MSNBC.com Page 2 of 3
Last fall, many lenders and servicers banded together to form a group called the Hope Now Alliance. The
lenders try to work out repayment plans, and can modify the terms of the loan by lowering the interest rates
or forgive part of the debt.
Some cities are also trying to help homeowners catch up on their late payments.
This week in Jacksonville, Fla., - where the foreclosure rate is three times the national average - officials are
launching a campaign to promote the city's interest-free loans. Distressed homeowners can get up to $5,000,
which will be forgiven if they stay in their homes for at least five years, said Dayatra Coles, manager of
housing services.
Louisville, Ky., also is giving out up to $5,000 in loans. The loans will be forgiven if the homeowner stays put
for a decade. The city has teamed up with the United Way to offer access to housing help in addition to the
charity's social services.
In order to battle a foreclosure rate that is 2.5 times the national average, according to First American
CoreLogic, Trenton's mayor has asked pastors to preach at least one sermon in June on foreclosures and to
distribute information about where to get help. Church volunteers became walking billboards, wearing "Save
Trenton Homes!" T-shirts with hotline numbers on the back.
Last Sunday, Rev. Donald Sullivan Medley of the Cadwalader-Asbury United Methodist Church in Trenton
preached that there's no shame in asking for help.
"Matthew chapter 7 talks about the wise and the foolish building their homes on the sand or on a rock," he
told his congregation. The house on the rock withstood winds, rain and floods, not the house on the sand.
"We have to prepare," said Medley, whose trustees distributed foreclosure help information during service.
Several people later came forward to get more information.
Los Angeles, meanwhile, is adding foreclosure counselors in neighborhood centers for jobs and city services.
The city also is tapping neighborhood councils to fight blight. L.A. is watching other cities' plans to buy up
foreclosed properties and possibly use them for affordable housing, but in an area where homes can easily
cost over $500,000, the cost of such a plan is a huge obstacle, said Gil Duran, spokesman for Mayor Antonio
Villaraigosa.
Cities don't have the financial or regulatory strength to stem the crisis, and need firmer backing from the
federal government, said John Taylor, president of the National Community Reinvestment Coalition in
Washington.
The federal government has taken several steps to prop up the housing market, but critics say Bush
administration-backed efforts to help borrowers avoid foreclosure are falling short.
The government has expanded the authority of the Federal Housing Administration to allow more borrowers to
refinance their loans, and to help home buyers purchase a foreclosed property.
In May, House lawmakers passed a bill to send $15 billion to states to buy and fix up foreclosed property.
Proponents say the measure, opposed by President Bush, will prevent blight in neighborhoods plagued by
abandoned homes. Lawmakers are also considering housing tax credit of up to $7,500 for first-time home-
buyers.
Still, calls are growing for more government intervention, in the form of a plan for the government to
guarantee as much as $300 billion in new loans to help borrowers refinance into cheaper, fixed-rate
mortgages.
But while the Congressional infighting drags on, cities have to deal with the housing "sinkhole" day in and day
out, Taylor said. "They recognize the federal government really isn't moving that will make a difference fast
enough. "
That's why officials in cities like Philadelphia aren't sitting still.
Last week, hundreds of people mobbed a court room in city hall after they were told about the court
intervention program. Common Pleas Court Judge Annette Rizzo said "It was bedlam."
http://www.msnbc.msn.com/id/25195953/print/l/displaymode/l 098/
6/23/2008
FBI says Twin Cities area is hotbed for mortgage fraud
Page lof2
starTribune.com I MINNEAPOLIS - ST. PAUL, MINNESOTA
FBI says Twin Cities area is hotbed for mortgage fraud
By DAN BROWNING, Star Tribune
June 20, 2008
The FBI has identified the Twin Cities as one of the 10 worst areas of the United States
for mortgage fraud and said it has literally dozens of criminal investigations underway
here as part of a national crackdown on the problem.
Deputy U.S. Attorney General Mark Filip and FBI Director Robert Mueller called a news
conference Thursday afternoon in Washington to announce a special enforcement effort
targeting mortgage fraud and mortgage-related securities fraud.
The multi-agency initiative is called Operation Malicious Mortgage. From March 1 through
June 18, the government charged 406 defendants in 144 mortgage fraud cases around
the country. The FBI estimates the total losses from these cases at about $1 billion. Six
of every 10 cases had losses of at least $1 million.
In Minnesota, it's even worse, said Rick Thornton, assistant special-agent-in-charge of
the criminal division in Minneapolis.
"We have three cases where we are expecting losses approaching $50 million -- in each
case," Thornton said. "That's a real loss to one or more financial institutions."
Two of the biggest cases include the prosecutions of Parish Marketing and Development
of Eagan and T J Waconia of Roseville, said Paul McCabe, FBI spokesman in
Minneapolis. The Parish case involved more than 200 homes in some southern Twin
Cities suburbs; the T J Waconia case involved 165 homes in Minneapolis. The losses in
those cases are still being tallied. McCabe declined to discuss the third case, an
indication that it may still be pending.
The FBI's Minneapolis office currently has "40 plus" investigations underway, Thornton
said. But even that understates the scope of the problem.
He stressed the fact that his agency has been participating in an informal mortgage fraud
task force for some time with the U.S. Postal Inspection Service, Internal Revenue
Service-Criminal Investigative Division, the U.S. Attorney's office, the Hennepin County
Attorney's office and other agencies. They work together, but each also has its own
cases.
Almost all cases top $1 million
Most of the cases they investigate have losses in the $5 million to $10 million range,
Thornton said. 'Virtually everything that we're working has a loss in excess of a million
dollars," he added.
The FBI recently sent notices to 24 of its offices nationwide that have been identified as
having particularly high mortgage fraud problems -- the Minneapolis office, which covers
http://www.startribune.com/templateslPrint_This_ Story?sid=205850 19
6/23/2008
FBI says Twin Cities area is hotbed for mortgage fraud Page 2 of 2
Minnesota and the Dakotas, was listed among the top 10, Thornton said. He said the
problem area is the Twin Cities.
The agency directed each office to stop opening lower-priority white-collar crime cases
for the time being and to concentrate on mortgage fraud. Thornton said his agents would
keep working existing cases. And the office does have some flexibility to pursue new
cases that have significant community impact. But more routine white-collar crimes may
get pushed aside for a while, he said.
60 arrests in one day
On Wednesday, federal agents arrested 60 people in 15 federal districts. None was in
Minnesota, but plenty have already been arrested here.
In 2007 and 2008, the U.S. Attorney's office charged 23 defendants who have either
pleaded guilty or have been sentenced for mortgage fraud and related crimes, a
spokesman said Thursday.
Some of the defendants include Sabry Wazwaz, Christopher Horton, Adam Leaf, Jill
Lehn, Isadore Stewart, Mario Lewis, Ron Joseph, Ramiz Saadeh, Kristopher Robbins,
Molly Heise, Joseph Van Huebl and John Rubischko.
"Obviously, we've been engaged in mortgage fraud investigations and this building
problem for some time," Thornton said.
Dan Browning' 612-673-4493
@ 2008 Star Tribune. All rights reserved.
http://www.startribune.com/templates/Print_ This _ Story?sid=205 850 19
6/23/2008
CD~ Dakota County
· ....... ... · Community Development Agency
. . . . . . . . . . . . . . . . . . . . ...
.... ~
oWNItR'fffIP'
C{)H.JtediIJfV
MEMO
September 15,2008
TO: Dakota County Cities
From: Dan Rogness, Director of Community Revitalization
Re: Foreclosure Update
The Dakota County Community Development Agency is offering two FREE workshops for
homeowners who are worried about making upcoming mortgage payments, are already facing
foreclosure or for anyone interested in learning more about foreclosure.
The first workshop will be on Thursday, September 25 from 4 to 7 p.m. at Luther Memorial
Church located at 315 15th Ave. N. in South St. Paul. The second workshop will be on
Thursday, October 2 from 4 to 7 p.m. at Heritage Library located at 20085 Heritage Drive in
Lakeville.
The workshops are open-house events, and participants are encouraged to come any time
during the workshop hours. No pre-registration is required.
The workshops will provide information on what happens during the foreclosure process,
homeowners' rights, and solutions for long-term housing needs. Participants will be able to ask
questions and get free advice - confidentially - from trained homeownership specialists.
The Dakota County CDA urges all homeowners who are facing foreclosure to attend a
workshop. The earlier homeowners act, the more options they have.
If you know of someone who will be unable to attend either workshop, but needs help or
would like more information about the foreclosure process, please encourage them to call the
Dakota County CDA at (651) 675-4555.
Dakota County Stats - August 2008
. # of Sheriff Sales in August - 157 (compared to 148 in August 2007)
. Total Sheriff Sales for 2008 - I ,451 (compared to 949 Jan.-August, 2007)
. # of Notice of Pendency's Filed in August - 264
. Total Notice of Pendency's Filed for 2008 - 1,948
CD~ Dakota County
. ....... .. .. Communi!:y Development Agency
..... .. .. .......................
.... ~
OWN fRs'ifl P"
C()fUteCtWI'V
A Notice of Pendency is filed by a mortgage company's attorney as official notification that the
foreclosure process has begun. Not all of these result in sheriff sales. Pages 3 and 4 of this PDF
file have Sheriff Sale and Notice of Pendency statistics for each city.
Mapping Using Dakota County GIS
http://gis.co.dakota.mn.us/website/dakotanetgis/
The Dakota County Office of GIS is updating the 2008 Foreclosures and Notice of Pendency
layers on a monthly basis. If you need assistance using this Web page, please call Randy Knippel
or Mary Hagerman with the Office of GIS at (952) 891-7081.
In The News
Provided in this PDF file are a few notable foreclosure articles that were published in the last
month. Among the points of interest:
. The Twin Cities metro area ranked second (behind Milwaukee) in mortgage disparities
between white borrowers and those from racial and ethnic minorities.
. According to a report issued by the Minneapolis Area Association of Realtors, more
than 20 percent of all houses on the market in the Twin Cities metro area are
foreclosures or short sales, up from a little more than 10 percent a year ago. In many
communities nationwide, home sales rose during the second quarter, while sale prices
fell - suggesting that lenders are working harder to unload those listings. However,
home sales in Minnesota fell 10.8 percent and the median sale price fell 7.2 percent.
. A feature article on metro area sheriff sale numbers. All metro counties appear to be on
track to exceed last year's sheriff sales by a large margin, but that also means more
people are now living within their means and more people are buying foreclosed homes.
. Although home buying conditions are prime, the continuing credit crunch is going to
make getting a mortgage more time-consuming and costly for some borrowers.
If you have any other concerns, please call me at (651) 675.4464 or send me an
email atdrogness@dakotacda.state.mn.us.
Study alleges bias in mortgage loans
Page 1 of 1
starTribune.com I MINNEAPOLIS - ST. PAUL, MINNESOTA
Study alleges bias in mortgage loans
By H.J. CUMMINS, Star Tribune
July 31,2008
Income does not explain why minority borrowers got a disproportionate number of
subprime mortgages in the run-up to the current foreclosure crisis, a study released
Thursday concludes.
That study also ranked cities by the mortgage disparities between white borrowers and
those from racial and ethnic minorities. Only Milwaukee gave a poorer showing than the
Twin Cities metro area, based on 2006 data -- the most recent numbers available --
gathered under the federal Home Mortgage Disclosure Act.
"The data reminds us that the current housing crisis was overwhelmingly the result of the
explosion of bad loan products in financially vulnerable communities," said John Taylor,
head of the National Community Reinvestment Coalition, which issued the study. It did
not consider credit histories or scores.
In the Twin Cities area, middle- and upper-income blacks were three times more likely
than comparably paid whites to get loans that carry more expensive terms designed for
high-risk borrowers -- called subprime or "Alt-A" mortgages. Middle- and upper-income
Hispanics were 2.4 times more likely; Asians, 1.6 times.
The results did not surprise Dave Snyder, a community organizer at Jewish Community
Action in St. Paul, one of 600 members of the coalition.
"It's not a statistic that stands in isolation," Snyder said. Minnesota has one of the nation's
lowest homeownership rates for blacks, and one of the highest for whites, he said.
Also among the worst cities in Thursday's report were Huntsville, Ala.; Ann Arbor, Mich.,
and Hartford, Conn.
H.J. Cummins. 612-673-4671
@ 2008 Star Tribune. All rights reserved.
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8/1/2008
Foreclosure pain rises
Page lof2
starTribune.com I MINNEAPOLIS - ST. PAUL, MINNESOTA
Foreclosure pain rises
By JIM BUCHT A, Star Tribune
August 14, 2008
The number of foreclosed and other bank-controlled homes on the market in the Twin
Cities area has nearly doubled from last year, while the number of traditional listings has
fallen 16 percent, according to a second-quarter report issued Thursday by the
Minneapolis Area Association of Realtors.
The report focuses on homes in the Regional Multiple Listing Service that have been
foreclosed or for which the lender has agreed to a sale for less than the mortgage
amount, called a "short sale." More than 20 percent of all houses on the market in the
metro area are foreclosures or short sales, up from a little more than 10 percent a year
ago.
In general, the lower the price, the more likely it's a foreclosure or short sale.
Aaron Dickinson, an agent with Edina Realty who helped process the data, said it
appears that lenders are offering larger discounts to buyers. The median sale price of
lender-controlled listings has fallen 11.7 percent during the past two years, while the
median price of traditional listings fell 3.4 percent.
"The banks are becoming more motivated to get those properties cleared out," Dickinson
said. "They're starting to price more aggressively to get this inventory off the books."
Nationwide, in many communities hit hardest by foreclosures, home sales rose during the
second quarter, while sale prices fell dramatically -- suggesting that lenders are indeed
working harder to unload those listings.
In Nevada, for example, the number of sales during the second quarter rose 18 percent
from a year earlier, while the median sale price in the Las Vegas area fell 24 percent,
according to quarterly data released Thursday by the National Association of Realtors.
The report said that median home prices fell in more than three-quarters of all U.S. cities.
Locally, second-quarter home sales in Minnesota fell 1 0.8 percent, while the median sale
price of existing single-family homes in the Twin Cities area fell 7.2 percent, according to
the report.
Foreclosure rates across the nation continue to increase. RealtyTrac reported Thursday
that nationwide, the number of foreclosure notices sent in July rose 55 percent compared
with July 2007 -- that's one in every 464 households. Minnesota had the 33rd-highest
foreclosure rate in the nation.
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8/15/2008
Sheriffs sales are gauge of mortgage defaults
Page 1 of3
starTribune.com ! MINNEAPOLIS - ST. PAUL, MINNESOTA
Sheriffs sales are gauge of mortgage defaults
By KEVIN GILES, Star Tribune
August 17, 2008
Last weekend Rachel Tusler and her boyfriend, Brad Zach, threw a party at their new
house, once a foreclosed property.
The tour included photographs documenting the sweat equity they have put into the
Brooklyn Park house since they bought it in March.
They spent hundreds of hours ripping out rotting carpet, removing cobwebs and years of
grime from the walls and ceilings, replacing moldy floors and painting every room.
"It wasn't just a cookie-cutter Plain Jane house," said Tusler, 26, a financial auditor at
Target Corp. "It has a lot of character. We saw the potential in it."
Tusler and Zach are among buyers finding affordable housing as foreclosures mount in
metro counties. Sheriffs sales -- counties use them as a key indicator of the mortgage
crisis -- have ballooned more than sixfold since 2003 in 10 metro counties.
An analysis by the Federal Reserve Bank of Minneapolis this spring predicted that
several suburban cities were bound for a flood of foreclosures because tens of thousands
of subprime borrowers will face higher payments on their adjustable-rate mortgages.
Cities as geographically diverse as Ham Lake, Apple Valley, Shakopee, Oakdale, Forest
Lake, Elk River, Albertville and Plymouth will experience problems, the analysis said,
because of concentrations of these types of mortgages.
Also projected as a trouble spot is Woodbury, where concern over an 82 percent
increase in foreclosures since last year led city leaders to create a task force to ease the
pain. "We saw the writing on the wall and it didn't look pretty," said city analyst Matt
Stemwedel.
Woodbury, not long ago the metro's fastest-growth suburb, projects 300 sheriffs sales
through 2008 -- 10 times the number five years ago. "Woodbury's not immune to that kind
of problem," said Stemwedel, who thinks that "problem loans" issued during the city's hot
housing market will lead to trouble for more homeowners.
All metro counties appear to be on track to exceed last year's sheriffs' sales by big
margins, and that's before higher mortgage payments come due this fall.
Hennepin County, for example, has seen a record numbers of sheriffs sales, with 3,826
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8/18/2008
Sheriffs sales are gauge of mortgage defaults Page 2 of 3
in the first six months of 2008. Ramsey County's sales soared nearly 800 percent, from
393 in all of 2003 to 1,648 through June of this year. Washington County now is
averaging about 100 foreclosures a month, up from a total of 147 in 2003.
"It's ultimately a correction to a market that went crazy too long," said Rick Ketterling,
who sells houses for Coldwell Banker Burnet in the south metro. "During the hot housing
market people sold junk for top dollar and people paid top dollar for junk."
Ketterling said he has seen many homeowners who bought houses they couldn't afford.
But there's a silver lining, too -- more buyers, he said, are now seeking to live within their
means and more foreclosed houses are selling.
Tusler, the new homeowner, said that the foreclosure market "enabled us to buy our first
home within our means." The house, built in 1977, has three bedrooms and three baths,
and it brings her back to her hometown after living in a condo in Plymouth.
They bought the house on 66th Place North for $148,000, invested $10,000 for repairs
and improvements, and figure they got a deal -- a similar house on the market is priced at
$272,000.
Tusler and Zach hired an inspector to check the house, calculated the task before them,
and decided to buy.
But Ketterling warns that lower prices don't always mean a good deal. Many foreclosed
houses might require a considerable investment to repair damage, replace missing
appliances or install a yard. "If you're struggling, look for ways to reduce your household
budget," he said.
Even as many people go shopping for bargain houses, more and more homeowners are
finding themselves falling behind on mortgage payments.
"We're going to see a continued increase of foreclosures," said Mark Ulfers of the Dakota
County Community Development Agency. "What's going on is that a lot of these people
are upside down, where what they owe on their mortgages is more than the value of their
homes."
For example, a condo in Burnsville that sold for $405,000 in March 2007 went through
foreclosure and now is selling for $182,900, even though the county's market value is
$366,900, said Dan Rogness, an agency analyst. And a single-family house in West St.
Paul, purchased in November 2005 for $155,000, now is on the market for $100,000
less. The county values that house at $167,000.
"Clearly the problem has escalated," Ulfers said. "That's pretty disturbing."
Kevin Giles · 651-298-1554
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8/18/2008
Get ready for a mortgage maze
Page lof3
starTribune.com i MINNEAPOLIS - ST. PAUL, MINNESOTA
Get ready for a mortgage maze
By JIM BUCHTA, Star Tribune
August 21,2008
The first time Jeff and Dana Prottas applied for a mortgage they weren't surprised that
they might have to jump through a few hoops to get an OK from the bank, so they worked
hard to improve their credit score.
So when they backed away from a complicated deal in which they tried to buy a house
from a borrower who owed more than the house was worth, they thought that getting a
mortgage on another, less-expensive house would be a breeze, as they had already
been approved.
They were wrong. Between canceling that deal and finding a new house in Golden
Valley, the mortgage markets continued to unravel, access to credit tightened and the
lender who had approved them several months earlier was now asking for a bigger down
payment and more detailed documentation, including photocopies of their Social Security
cards.
"I was almost on my way to the doctor to get a finger pricked to give blood," Jeff Prottas
said.
Though buying conditions are prime -- mortgage interest rates are still near historic lows
and home prices are coming down at a steady clip -- coming changes resulting from the
continuing credit crunch are going to make getting a mortgage more time-consuming and
costly for some borrowers.
That's part of the reason that U.S. mortgage applications, particularly for refinancings,
have fallen to their lowest level since 2000 -- and it's why a housing recovery isn't going
to happen anytime soon.
"The banking industry is running the housing industry," said their Realtor, Sheri Fine of
Edina Realty. She says that creditworthy buyers are paying a price for reckless
underwriting standards of the past couple of years. "It's almost like the wrong people are
getting punished."
Despite recent dramatic declines in the value of Fannie Mae and Freddie Mac, the
largest providers of mortgage funds in the nation, mortgage money is still flowing. During
the first half the year, Freddie Mac purchased more than $300 billion in mortgages, and
at Cornerstone Mortgage, loan officer Ronny Loew said business has steadily improved
in recent months as sellers slash prices.
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Get ready for a mortgage maze
Page 2 of3
He said that, while access to credit is more difficult and the options are dwindling, the
higher cost of getting a mortgage is being offset by lower home prices.
"It will be a bit more painful for everyone while the industry works to restore confidence,"
Loew said.
Still, lenders are continuing to look for ways to offset the risks of being in the mortgage
business these days, most notably the uncertainty of not knowing whether falling prices
have bottomed out.
Because of that, starting in early November, Freddie Mac and Fannie Mae will double the
delivery fee they charge their lenders, who often pass that along to borrowers, from 0.25
to 0.5 percent. On a $185,000 mortgage with a 6.5 percent interest rate, that would
translate into an increase to 6.625 percent.
Freddie Mac spokesman Brad German said that's a small price to pay, considering the
declines in home prices.
On an average monthly mortgage payment "that's less than the cost of a couple of Happy
Meals," he said.
Despite the woes associated with Freddie Mac's recently plummeting stock price,
German said that the company has not implemented across-the-board increases in the
cost of getting a mortgage.
Rather, the company has shifted to a nuanced, risk-based pricing strategy aimed at
helping certain classes of borrowers.
"We are constantly analyzing the market and making adjustments," German said. "It's not
all one-way thinking."
Similar moves at the FHA
The Federal Housing Administration (FHA) is making similar changes. Because of a
congressional mandate, it will temporarily increase its down-payment requirement from 3
to 3.5 percent as part of an unusual shift to risk-based pricing aimed at reducing losses
from mortgage delinquencies.
After becoming virtually irrelevant during the days when no-cost, zero-down and low-
documentation conventional mortgage products were common, FHA mortgages now are
golden.
In June 2007, the FHA provided funds for 625 borrowers in Minnesota, but as access to
those Wall Street-funded mortgages dried up, that number increased to 2,200 last June
and continues to rise.
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Get ready for a mortgage maze
Page 3 of3
All of these changes, including increasing demands for more detailed documentation that
adds time and expense to the process, come at a time when many borrowers are having
to offer unplanned and larger discounts on the homes they're selling.
Prottas, for example, said that he sold their townhouse for $25,000 to $30,000 less than
they had planned, leaving them with little money for a down payment on their new home.
They also spent about $2,500 on temporary housing, appraisals, inspections and other
things while they waited for their offer to be accepted, but felt lucky that they sold their
place for more than they paid for it -- an achievement in a market where sellers are
increasingly upside down on their mortgages.
Paul Schuster, vice president of Marketplace Home Mortgage in Edina and the president-
elect of the Minnesota Mortgage Association, said that the same pendulum swing that put
borrowers into risky mortgages has swung far the other direction, but appears to be
showing some signs of coming back to the middle.
"There has been a continual tightening of guidelines, down payment requirements and
credit standards," he said.
"But in the last couple of months, we have seen some signs that there's more comfort
with where the market is settling in terms of value."
The irony of having to fight for a mortgage at a time when the housing market decline
threatens the stability of the broader economy is not lost on Prottas.
"We are responsible individuals who try to make good choices," he said. "I don't
understand why in today's economic climate the banking industry is making it more
challenging to buy a home."
Jim Buchta. 612-673-7376
@ 2008 Star Tribune. All rights reserved.
http://www.startribune.com/templates/Print_ This _ Story?sid=27254279
8/22/2008
City of Farmington
430 Third Street
Farmington, Minnesota
651.463.7111 . Fax 651.463.2591
www.ci.farmington.mn.us
SUBJECT:
Peter Herlofsky
Robin Roland ~
Foreclosures - from the utility billing perspective
TO:
FROM:
DATE:
October 10, 2008
Utility services billing can be the front line for obtaining foreclosure information. Residents call
in when they vacate a property (for any reason). At the time ofthe phone call, the utility billing
clerk obtains the name of the new homeowner/resident and the date of the change in occupancy.
With foreclosures, residents will share information about the property either openly or after
respectful questioning by the clerk. This information is noted on the account and options are
offered to the resident (water shutoff at the street, garbage discontinuance due to a vacancy). If
the name of a bank or mortgage company is offered, that information is updated as well.
Monthly water meter reading may also offer clues to foreclosure properties. Municipal services
staff currently walk each neighborhood reading the meters from a hand held computer unit.
During these walks, staff makes note of obviously vacant properties and notifies appropriate city
staff of any perceived problems.
Also, as a regular part of the monthly billing cycle, the utility billing clerk reviews each
unusually high or low meter reading. Verification (or re-read) is done to assure accurate billing
and in the course of the verification a foreclosure (vacancy) situation may be revealed.
Zero water usage at a property is a red flag to the clerk. Information in the billing system may
indicate a known vacancy (due to snowbird status or other prior notification) but if no reason is
apparent, are-read of the meter is done to verify the accuracy of the initial read. The utility clerk
attempts to contact the resident by phone or mail. If a vacancy is indicated, the clerk investigates
property status through the Dakota County website or other available property listings. The goal
is to identify a responsible party for the property. Mortgage companies, banks, or real estate
agents may be contacted not just for the billing but to offer options for the property during
vacancy (water shutoff etc).
Last winter, high meter readings on several properties revealed abandoned or foreclosed
residences. Unfortunately, these high readings were due to water pipe breakage that flooded the
properties, causing significant damage. Investigation of the high meter reading happened long
after the actual vacancy occurred because residents simply abandoned the property without
turning off the water. Other utilities (electric & natural gas) were shutoff to the property and
when it got cold, the pipes froze and burst. Due to heightened awareness of the foreclosure
problem and proactive steps by utility companies and our city staff, we believe there will be
significantly less of these properties in the coming winter.
The Finance department has the utmost sensitivity and respect for all our customers. Having said
that, our utility billing clerk's experience and understanding of the community coupled with her
attention to detail give her almost a 'sixth sense' in dealing with these complicated and
sometimes delicate situations.
City of Farmington
430 Third Street
Farmington, Minnesota
651.463.7111 . Fax 651.463.2591
www.ci.farmington.mn.us
TO:
Peter Herlofsky, City Administrator
FROM:
Randy Distad, Parks and Recreation Director
CC:
Patti Norman, Recreation Supervisor
Missie Kohlbeck, Senior Center Coordinator
Cindy McMillen, Building Attendant
Charlie Weber, Chair of Rambling River Center Advisory Board
RE:
Renovation of Old City Hall into the Rambling River Center
DATE:
September 22, 2008
I have included with this memo the following information about the renovation of old City Hall
into it becoming the new Rambling River Center:
. Cost estimates of improvements needed in order to turn the old City Hall into the new
Rambling River Center
. A building footprint diagram that identifies how the various spaces in the old City Hall
could be used as the Rambling River Center including a teen center and as community
rental space
. Benefits and challenges of renovating the old City Hall into the Rambling River Center
. Background information about the current membership at the Rambling River Center
. A map of the location of where the current Rambling River Center membership lives
The cost estimates are based on information received during and after a walking tour that
occurred at the old City Hall on Wednesday, August 27th and are as follows:
. During the walking tour, we had a HV AC person give us an idea about what needs to be
replaced and what could be deferred until a later date. According to the information
received, the cooling units above the old Engineering area should be upgraded, which
would allow the building to be properly cooled during larger gatherings at the building.
The HV AC person stated that while the existing furnace should be replaced more so for
efficiency than anything else, the feeling was that the replacement of the furnace could be
deferred until a later time.
. The estimate for the alarm system was received from John Powers and was based on
what he has seen in comparable projects.
. The sprinkler system estimate was received from Ken Lewis.
. The flooring improvements were based on having an allowance amount that could be
worked within in order to make improvements needed immediately. There will be other
flooring improvements needed over time but the group that walked through the building
felt that the building could get by with the existing carpeting in most areas of the
building.
. The wall improvements were based on having an allowance amount that would allow for
removing some of the existing temporary walls in order to enlarge or reconfigure certain
spaces.
. The wall improvements also included an allowance for repainting the interior of the
building in most locations.
. The roof membrane is relatively new. The roof membrane over the old Engineering area
was installed in 2001 and the roof membrane over the remaining area of the building was
installed in 2002. Both of these roof membranes have 25 year warranties and so if there
are any leaks, they should be covered under the warranty. It is a matter of contacting the
roofmg company to repair any leaks that may occur.
The information being provided in this packet should help serve to start a discussion on what
types of improvements should be made immediately and what improvements can be deferred
until a later time should the City Council determine that it wants to move forward with
converting the old City Hall into the Rambling River Center.
If you should have any follow up questions or need additional information, please don't hesitate
to contact me.
Cost Estimates Old City Hall Improvements
Improvement Item Work to be Completed location Estimated Cost
-- - - -.-- ---".---.'-. ----------
Remove existing units and increase size to
AC Roof Units 10 tons total roof of building $30,000
f.---- -- ._----- --------------
defer to a later date existing furnace has
efficiency issues but HVAC people said it
Furnace could run for 100 years mechanical room
-- -.---.-.-------
remove existing carpet and replace with former engineering and I
Flooring laminate flooring community development space f___~30,-OOO
remove existing carpet and replace with
FI~oring __. vinyl tiles hallways of entire building I $5,000
Roof inspect and seal leaks roof of entire building_____J_-==-~~--$-f,oOo
------------
install new sprinkler system for fire
1-- Sprinkler System suppression (this is a code requirement) entire building $100,000
- 1--------
install new alarm system
Fire Alarm System (this is a code requirement) entin~ building --- 1---' $10,000
- -
$5,000 allowance
remove some of the non-bearing walls to new materials and
enlarge spaces and add new non-bearing disposal of old materials
Walls walls to reconfigure some spaces entire building -- (volunteer labor)
-- --$5,000 for supp-rres-'
Walls painting entire building (donated labor)
- ---- --- -'---
Total Cost $186,000
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Building at 325 Oak St.
Benefits as Senior Center
. Space - 12,500 square ft. vs. 6,000 square ft. (Outside footprint)
. More space allows for scheduling of more programs.
. Space and building materials allow for natural sound proofing - noise,
disruptive programs can be scheduled away from one another thus
allowing more to go on without interrupting each other. ie: yoga and fitness
center, yoga and coffee guys, line dance and cards, 55 alive and many
other programs can be scheduled at more convenient time because space
needs wouldn't conflict.
. Larger spaces mean no longer turning away people from programs like
line dance when currently more than 18 people just don't fit. Almost 40
people are on the list interested in the line dance program. New space
would be double the size of the current space.
. Rental space would not overlap with program space giving the potential to
rent more often. Rentals could also have outdoor access preventing one
group walking through another's space.
. Cupboard and countertop in the former Parks and Recreation space lean
towards a great art space. The woodworking group is looking for space to
leave some supplies. Also while we have held painting classes at the
current RRC site participants have expressed the need to allow paintings
to dry before moving them. The same goes for a lar~e space to spread
out sewinglquilting projects. We can also utilize cupboards, counters and
other existing furniture for arts and crafts supply storage and work space.
. Garage space for DARTS bus and Sr. space at same locations at Senior
Center. This make trips and tours much easier for both volunteers and
staff they drive vehicles.
. DARTS bus continuing to be housed in Farmington ensure priority pickups
for those over age 60 in the Farmington Community.
. Parking on street and the 10 spots on the east of off street parking plus
locating next to a larger of street lot means a lot to participants in
programs. During the construction of 403 Third St. many people did not
come to programs and/.or cancelled program registration because "they
can't get there, there is no place to park".
. Allowing teens as well as senior benefits whole community. Share
spaces, share equipment, share building costs while providing for
community.
. Partnerships with other groups including DARTS, CAP, DVAC, AA, and
others. ..
Challenges as Senior Center
. Cost of HVAC need to refit in the very near future.
. Kitchen issues. Talked with Denise Loetsch from CAP Agency on 9/2/08
and while being in Sr. Housing is most opportune for CAP the Sr. Housing
in the Farmington Community is not receptive to Sr. Dining/MOW moving
in. Thus they are willing to accept any space offered in the Farmington
Community. The RRC sees the good the do in the Farmington
Community and would like to work together to have an acceptable kitchen
space. The equipment from CAP can all be moved, but Improvements
would be needed for floor and ceiling. Including a hood for the
commercial stove, duct work for the stove, and stainless steal countertops.
CAP currently does not have any funds for remodeling, but again does
have access to equipment.
. Flooring issues.
Currents and Brainstormed Programs
. Computer lab and class
. Organ class
. Dances
. Battle of Bands
. WII and Playstations games
. Fitness Class, yoga, weights,
pilates, dancing, noridc walking
. Classes: 55 Alive, Babysitting,
Firearms, Fishing
. Arts: woodcarving, painting,
Sewing
. Health Services: Flu Clinic,
Sr Food for Health, Happy Ft,
Coffee Chats
. Legal Sevices: Tax Aid,
Sr. Law Project
. Nutrition site, MOW
. Leisure: Card playing, pool,
Foosball, ping pong, puzzles
. Sports Events on Big Screen TV
. Coffee Club
. Special Events
Teen and Seniors
Seniors
Teens and Seniors
Teens
Teens and Seniors
Teens and Seniors
Teens and Seniors
Teens and Seniors
Seniors
Seniors
Seniors
Teens and Seniors
Teens and Seniors
Teens and Seniors
Teens and Seniors
A Look at Ramblino River Center Membership
Membership is not a requirement for participation, however, membership is
highly encourages. Also program fees are higher for a non-member. Current
membership is at 520 this is down from 590 in 2007.
Membership age ranges
Age 50 - 59 29
Age 60 - 69 135
Age 70 - 79 182
Age 80 + 141
Would not give birthday information: 33
Where does the membership live?
Spruce Place has 60 apartments (6 of these are 2 bedroom) 27 residents are
RRC members. 5% of RRC members live at Spruce Place
Red Oak Manor has 37 apartments ( only one is a 2 bedroom) 15 resident are
RRC members. 3% of RRC members live at Spruce Place.
Cameron Woods has 84 units. 21 residents are RRC members. 4% of RRC
members live at Cameron Woods.
Trinity Terrace/Care Center has 18 residents that are RRC members. 4% of
RRC members live at Trinity.
The remaining members are living in their own homes, town homes, or housing
not specified for seniors.
Member live in the City of Farmington, Emipre Township, Castle Rock Township,
Eureka Township, Lakeville, Norhtfield, Hampton, and Apple Valley. Those who
are not residents of the City of Farmington pay higher fees to become a member.
What does this mean to the RRC?
More participation is not seen from the Sr. Housing residents from Spruce and
Red Oak because most of the residents move to these apartments because of
failing health. The frail elderly have a difficult coming out of their homes for
programming and most have some form of home health assistance in their
apartment.
This also means that most members of the RRC drive to the center to participate
in programming.
See the attached GIS map from Dakota County to see where the membership
lives.
Place of Residence of 2008 Rambling River Center Members
City of Farmington
J,A
N1NINGER TWP ~
.- ~
V--1
ASTINGS
I
hi
Ir-
~y ~
J ~~
/1/
VERMIL1210N TWP
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/
\ /~' 1/ J _l.~~ N
'-I A dJi RANDOL~HnrPI\ +
" RANDOl:PH.J I
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WATERFORD TWP ,..... SJ/OTA-~ 2008 Members (7 2007 Not Renewed
. 7 ~ ~' Farmington 256 Farmington 48
f-/ ~ / i---' Castle Rock Township 21 Empire Township 7
Y I Empire Township 17 Castle Rock Township 5
I I;V" Lakeville 15 Lakeville 3
U ~ I l Apple Valley 3 Apple Valley 1
NORTHmD rrJ. Rosemount 3 Burnsville 1
Vermillion Township 2 Outside the County 5
Burnsville 1
Greenvale Township 1
Hastings 1
Randolph Township 1
Outside the County 4
o
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2008 Members
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Map dated March 27, 200B.
Prepared by the
Dakota County Office of GIS.
2007 Not Renewed
How does the CAP/Ramblinq River Center Parnership Work?
The CAP agency (Community Action Programs) is a social service agency
serving Scott, Carver, and Dakota Counties.
In Farmington they provide Meals on Wheel, Congregate Dining, and Head Start
services.
The Meals on Wheels and Congregate Dining programs are giving space at the
Rambling River Center. The program is run by CAP Agency staff and volunteers.
CAP does not pay any rent, energy fees, or municipal service fees for their space
at the center. ROC services empty all garbages, and clean the kitchen and
dining room floors. CAP staff cleans the sinks in the kitchen. All these are given
as an in-kind donation from the City of Farmington to the CAP Agency. In return
we have use of their sinks, stove, refrigerator when needed.
The Rambling River Center does plan some joint programming with the CAP
Agency for Holiday Parties, Volunteer Recognition, etc.
Benefits and Challenges of Converting the Old City Hall to a Senior Center
Benefits:
. Space - 12,500 square ft. vs. 6,000 square ft. (Outside footprint)
. More space allows for scheduling of more programs at the same time.
. More space and better building configuration allow for programs with
different sound/noise levels to utilize the building at the same time (ie:
yoga and fitness center, yoga and coffee guys, line dance and cards, 55
alive and organ classes and etc.) Diverse programs can be
accommodated to meet the needs of the consumer and not the
limitations of the building.
. Programs/ classes will be able to accommodate more registrants
because space size is larger (i.e.; no longer turning away people from
programs like line dancing because of limited space. )
. Large rental space would not overlap with smaller program space which
could potentially increase rentals. Rentals could also have outdoor
access preventing one group walking through another's space.
. Cupboard and countertop in the former Parks and Recreation area is
ideal for arts and crafts programs and individual projects. Groups such
as the woodworkers, quilters and painters could utilize the space for
ongoing projects and supply storage. This space would also provide
possibilities for new art classes and partnerships with art groups such as
DVAC.
. Garage space for DARTS and Senior Center busses. Would make trips and
tours much easier for both volunteers and staff that drive the busses and
for participants as they can enter the busses in a warm garage.
. Ongoing partnership/agreement with DARTS would possibly ensure
priority pickups for those over age 60 yrs. living in the Farmington
Community.
. Much better parking on street and ten off-street parking spots on
eastside of building has a potential to attract more peopleto use the
building and programs.
. Allowing space for a teen center and a senior center benefits the entire
community. Share spaces, share equipment, share building costs while
providing for community.
. Ongoing and new partnership opportunities with groups including DARTS,
CAP, DVAC, M, Dakota County Library, State Extension office, Public
Health and others.
Challen~es:
. Kitchen requirements - will be discussing CAP requirements week of Oct.
6.
. Community Outreach - to address issues and concerns relevant to
seniors, teens and the community.
Current and Potential Future ProRrams:
. Computer lab and class
. Organ class
. Dances
. Battle of Bands
. WI I and Playstation games
. Fitness Class, yoga, weights,
pilates, dancing, nordic walking
. Classes: 55 Alive, Babysitting,
Firearms, Fishing
. Arts: woodcarving, painting,
sewing, drawing, quilting
. Health Services: Flu Clinic,
Senior Food for Health, Happy Feet,
Coffee Chats
. Legal Sevices: Tax Aid,
Sr. Law Project
. Nutrition site, Meals on Wheels
. Leisure: Card playing, pool,
Foosball, ping pong, puzzles
. Sports Events on Big Screen TV
. Coffee Club
. Special Events
. Line dancing
Teens and Seniors
Seniors
Teens and Seniors
Teens
Teens and Seniors
Teens and Seniors
Teens and Seniors
Teens and Seniors
Seniors
Seniors
Seniors
Teens and Seniors
Teens and Seniors
Teens and Seniors
Teens and Seniors
Seniors
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From: Chris_Ziemer [mailto:czlemer@woldae.com]
Sent: Wednesday, July 02, 2008 3:45 PM
To: Tina Hansmeier
Subject: RE: City Hall Renovation & Demolition Numbers
Tina,
The costs below are the costs associated with demolition and remodel of the existing City Hall:
I.) Demolition of Existing Building
$150,000 Building Demoition
+ $25.000 Site Costs (New Fill / Clean Up)
$175,000 Total Construction Cost*
+ $35.000 Fees. Testing. Printing Costs*
$210,000 Total Project Cost *
. *Constructioll and Project Costs do not include any Asbestos Abatement that may be
required to address hazardous materials if present in the building.
2.) Renovation of Existing Building - Option # I (Approximately 12,500 SF)
. Option #1 represents minor renovation of the existing building (i.e. Upgrading
HV AC systems, electrical power, data, fmishes, existing walls stay in place with
minor modifications)
Exterior Improvements (Exterior of building would remain in its current state)
Interior Improvements (Interior Improvements would allow for upgrade of
mechanical and electrical systems - existing walls and interior layout would
remain as is with minor
modifications. All areas would receive new
finishes (i.e. carpet, paint, ceilings))
$125,000
Mechanical Improvements
$437,000 Includes new air-handling equipment, ductwork, V A V zoned
system wi hot water reheat, new boiler and pumps, plumbing & digital controls
Electrical Improvements
$225,000 Includes new panels, power and data wiring and devices
$787,000
+$235.000
$1,022,000
Total Construction Cost*
Proiect costs (i.e.Fees. Testing. Printing Costs)*
Total Project Cost*
. .Construction and Project Costs do not include any Asbestos Abatement that may be
required to address hazardous materials if present in the building.
3.) Renovation of Existing Building - Option #2 (Approximately 12,500 SF)
. Option #2 represents major renovation of the existing building (i.e. gutting interior
of existing building wi new walls and doors, upgrading windows, roof, new HV AC
systems, plumbing, electrical power and data.
Exterior Improvements (Upgrades to the building envelope would include
replacement of roof and windows)
$132,000 New Fully Adhered EPDM roof with wood blocking and metal
coping
$43,250 New thennally broken aluminum windows with low-e glass
$40,000 Site Cost Allowance (i.e. new paving at parking lot I sidewalk
repair)
Interior Improvements (Assumes the interior of the building would be gutted and
new walls and doors would be constructed to accommodate new tenant/owner's
needs)
$355,500 includes new walls, frames, doors, new finishes (i.e. carpet,
paint, ceilings)
Mechanical Improvements
$500,000 Includes new air-handling equipment, ductwork, V A V zoned
system wI hot water reheat, new boiler and pumps, plumbing & digital controls
Electrical Improvements
$225,000 Includes new panels, power and data wiring and devices
$1,295,750
+$389.750
$1,685,500
Total Construction Cost*
Proiect costs (Le.Fees. Testing. Printing Costs)*
Total Project Cost*
. .Construction and Project Costs do not include any Asbestos Abatement that may be
required to address hazardous materials ifprescnt in tbe building.
All costs above are in 2008 dollars. Please feel free to call me with any questions you may have
or if you require any additional explanation for the cost options above.
Sincerely,
WOLD ARCHITECTS AND ENGINEERS
Chris Ziemer
Associate
Page 1 of2
Peter Herlofsky
From: White, Larry [Iwhite@grandprojectsinc.com]
Sent: Monday, October 13, 20081:21 PM
To: Peter Herlofsky
Cc: Randy Distad; Patti Norman; Missie Kohlbeck
Subject: Proposed Rambling River Center Upgrades
Thank you for contacting Grand Projects, Inc. to assist in evaluating the conversion of the Old City Hall to the proposed Rambling
River Center.
The attached summary addresses the construction budget issues resulting from our discussions and tours of the facility. The
summary generally follows the format from the
previous summary dated September 22, 2008. Our summary dated October 13, 2008 addresses only the "construction" items
and does not include anything for fixtures, furniture or equipment to be provided by the City or others except where specifically
mentioned in the Comments column.
We have listed several items which had not been previously addressed such as the cost of kitchen facilities, some additional
demolition, installing mall gates in the main corridors to allow use of all restrooms during functions in the new Multi Purpose room,
some additional electrical work, and some necessary project costs for design services, general conditions, and construction
management.
Not to sound self serving but this project has enough complexity, particularly due to the installation of the fire sprinkler service and
potential replacement of the old HVAC systems, that it will require on site supervision and project management services to keep
the schedule on track and to closely monitor project costs.
There are still a number of decisions to be made which can impact the final project cost:
. Scope of kitchen functions, Health Department requirements, etc.
. Level of audio visual and speaker systems to serve Multi Purpose room for banquet or meeting functions, remote controls
for lighting, wireless or wired Internet, etc.
. Plumbing needs in Arts and Crafts area
. Perform a lighting study to evaluate energy savings and payback period to replace existing fixtures with new high efficiency
units
. Evaluation and discovery of hazardous materials (possible asbestos in pipe covering fittings for HV AC and water lines,
existing floor tile, etc.)
. Final Code review of exiting, fire rated construction requirements, and restroom fixture counts based on change on
Occupancy
One final comment is that since most of the ceiling tiles will need to be removed to install the new fire sprinkler system, it may
make sense economically to replace the existing HVAC systems and old inefficient light fixtures at this time. This avoids future
disruptions to the space and provides all new building systems from the ceiling level up.
It will probably take about a month to complete plans and specifications for the proposed scope of work. A quick review of the
work schedule indicates that the construction issues can be completed in approximately two months depending on the weather at
the time roof openings will need to be cut if you elect to replace the existing boiler system with new rooftop units.
Feel free to contact me if you have any questions or if we can be of further assistance.
Larry L. White
President
Grand Projects, Inc.
PO Box 29
Northfield, MN 55057
Cell 612644-9023
10/13/2008
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10/13/2008
Farmington City Council Workshop
Subject: What to do with Old City Hall.
The City of Farmington will have decreased income because New Construction Building
Permits flow has decreased. Home Dwelling values have decreased and that will
impact the City's income by not having increased property tax revenue to the City.
I understand that the Farmington City Council may want to keep the old City Hall and
spend $191,000.00 to renovate it. There would be overhead to heat it, cool it, clean it,
maintain it and do future repairs. Using it as a Senior Center and possibly Youth Center
is noble idea but let's investigate all the costs. Our City needs to tighten its belt.
Here are some ideas:
1) The seniors currently have the Rambling River Center. I agree that Rambling River
Center has limited space but why can't the seniors, who pay Property Tax which a
portion goes to the School District AND the Kids, be able to use some of the School
Facilities? It sounds like a good subject to have the Farmington City Council meet with
School District 192 Council.
2) There is vacant officel meetingl event space at the New City Hall that will eventually
need to be completed. If we have to spend money, why spend money on a 40 year old,
Old City Hall? We can invest in the New City Hall and make the Senior and Youth
Center there.
3) I think and a lot of Farmington Residents agree that the City of Farmington should put
the Old City Hall on the Real Estate Market for several months and see who is
interested to buy the building. If we can get a reasonable price, we should sell it.
4) If we do sell Old City Hall, we could use the money to finish more space in the New
City Hall and the seniors and Youth could use that space. For the most part, you will
already be heating and cooling that space in the New City Hall. If there is money left
over, it could be used to retire some of the City's debt or other project or have some
money invested in savings.
Thank you for your time.
..
Home:
David E Story
19430 Elkridge Trail
Farmington, MN 55024-8756
Business:
David E Story Insurance Agency Inc.
18556 Pilot Knob Road, Suite 205
Farmington, MN 55024-8675
Mobile: 612-990-0044
Office: 651-463-9692