There's a focus this week in St. Paul on a host of measures to help Minnesota homeowners caught up on the national mortgage crisis. Basically a national problem, there are still some things that Minnesota can do to ease the crisis, but they must be measures that don't jeopardize Minnesota's already precarious economy.
As it is, Minnesota may see 29,000 to 37,000 foreclosures this year.
Gov. Tim Pawlenty, in announcing some initiatives Tuesday, said that Minnesota ranks 12th in the nation for the number of foreclosures, and second for its per capita rate of foreclosures among subprime mortgage holders.
The Republican governor announced that foreclosure prevention counseling will be doubled through a $4.3 million federal grant, the second-largest made to any state.
It will provide 37 additional counselors to the statewide contingent of 76 counselors, with estimates that the new contingent will result in 7,500 foreclosures being prevented this year.
Key to the program is the ability of the counselors to mediate, to get lenders to continue working with homeowners who have fallen behind on their mortgage payments.
Pawlenty also announced a $500,000 Marquette Financial Companies grant for foreclosure prevention deferred loans, but is only available in the metro area.
The Legislature this week is considering a number of measures which should add to the resources available to prevent foreclosures.
One measure, however, to place a moratorium on mortgages for a year, is opposed by the governor -- who has already issued a veto threat. We agree that such a drastic measure may do more harm to the state's overall mortgage market than it does by forestalling the inevitable.
Lenders who must cash flow their mortgages would be just as hard-strapped if told they cannot collect for up to a year. Better are measures to keep lenders working with homeowners so that some mediated agreement keeps both lenders and homeowners afloat.
Other measures in the mix should provide help, such as increased financial assistance to some families struggling to meet monthly mortgage payments to avoid foreclosure, and measures to help renters faced with landlords who enter foreclosure.
While what Minnesota does will help, it's what Congress does that will provide a long-lasting cure. Part of that may come in the restructuring of the way the federal government monitors and regulates the financial industry, but those are steps that demand close and deliberate scrutiny.
-- Bemidji Pioneer