Noticias
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Giving into corporate efforts to protect banking interests, Minnesota Governor Tim Pawlenty vetoed SF 3396, which would have put a temporary hold on foreclosures while still requiring borrowers to make payments on their loans. The bill would have required homeowners with a sub-prime or negative amortization loan to pay either 65 percent of the payment owed when the loan defaulted, or the minimum monthly payment when the mortgage was first created, whichever is less, for a one-year foreclosure deferment period. The bill passed both chambers of the Minnesota Legislature with a wide margin, only to be vetoed (part of Pawlenty's record number of vetoes for a single session). In the meantime, home foreclosures are projected to increase 39 percent this year in Minnesota, with one out of every 31 Minnesota households experiencing a foreclosure between 2005 and the end of this year.
We've highlighted the ways in which states have taken action to protect their citizens against the sub-prime crisis, including passing moratoriums. The Brookings Institution recently released a new report listing 10 action steps that states can take to stem the sub-prime crisis. Many of the steps focus on preventing foreclosures and vacant properties, re-emphasizing the importance of keeping people in their homes and allowing a fair restructuring of the mortgage.