Today's Most Popular Video
Feb 20, 2009 10:59 pm US/Central
U Of M Study Tells Story Of Foreclosed Homeowners
(WCCO)
-
-
"I was afraid I was going to lose my house. Where was I going to go at my age?" said Edward Hines. Twin Cities Habitat For Humanity helped him keep his house.
CBS
We know foreclosures have hit many communities hard over the past two years, but we didn't know much about the families involved. Now, a study out of the University of Minnesota takes a closer at the folks hurting the most.
Ryan Allen, Assistant Professor of Housing and Community Development, looked at all of the 5,400 foreclosures in the city of Minneapolis between July 2006 and June 2008. He then matched those addresses to the public school rosters. From there, he could determine the race and ethnicity of the people involved, as well as which families had children.
He found foreclosures in Minneapolis have "a massive, disproportionate effect on households with kids." In Minneapolis, 16 percent of families have children in public schools, but 40 percent of the families that have gone through foreclosures have children in public schools.
"That's really astounding. That kind of residential instability is going to be really tough on kids in terms of their ability to succeed in school and to maintain friendships," he said.
Allen found the northside and southside between Interstate 35W and Hiawatha bear the brunt of the foreclosures. The rates of foreclosure among blacks and hispanics also far outweigh caucasians and asians.
"That kind of concentration can is really hurtful for communities," he said, citing a study out of the Chicago area that found one foreclosed property reduced the value of the homes within 1/8 of a mile by one percent.
Allen also found a slight majority of the foreclosures are on renters. Among the native born-population with kids in public schools that have foreclosed, about 70 percent were renters. Among the foreign-born population, primarily hispanic, with kids in public schools, half were renters and half lived in their homes. That's a particularly difficult statistic for that community.
"If you own the home and it was foreclosed, you take a hit on the equity, your credit score is going way down, in addition to having to move and all of the other things," he said.
Stacey Bostwick, a foreclosure counselor with PRG, Inc. listened to Allen's presentation of his work at the Humphrey Institute on Friday.
"What was really great about it was that it really solidified a lot of things that we think we see," she said.
PRG, Inc. is a non-profit organization that offers affordable housing and foreclosure counseling in South Minneapolis. Over the past few years, PRG, Inc. has been able to help 93 percent of its clients avoid foreclosure.
Bostwick said she found many of her clients did not have enough financial literacy on the front end to avoid getting in trouble.
"We literally walked through and said 'This is what happened when you got the loan. This is what your loan means,' and some of them were in tears because they had no idea what it meant and what had happened to them," Bostwick said.
Bostwick said she remains optimistic about the year ahead. She believes that with the extra attention about foreclosures, people in jeopardy of losing their homes are reaching out for help earlier.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
Truckers Sue For Unauthorized Citations
Click to enlarge
Stumble It!
Reporting
