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o.aea CommunityDividend Community developers in Minnesota face the foreclosure crisis Continued from page 7 hood recovery framework has helped pre- pare Minnesota to take full advantage of fed- eral assistance from the $3.9 billion Housing and Economic Recovery Act. The framework has also positioned Minnesota to pursue cre- ative property-disposition strategies, such as the National Community Stabilization Trust, or NCST. The purpose of the trust is to help local organizations attain properties from lenders and servicers in order to enable their rehabilitation and reuse. In mid-2008, the NCST's sponsors selected Minneapolis-St. Paul as the national pilot site for refining the negotiation and transfer process. (For more on the NCST, see the sidebar on page 4.) From crisis to opportunity The correlation between the economic down- turn and the housing market is clear. In the words of private developer Chuck Leer of Minneapolis, "The key to economic recovery is the housing market. And housing will not recover until we stem the foreclosure crisis. The dark cloud of foreclosures has fractured neigh- borhoods, sent prices into a tailspin, and left us all feeling vulnerable. The silver lining for all is an abundant supply of more affordable hous- ing and unprecedented opportunities to revi- talize our community. The foundation for recovery will be built on civic ingenuity, hard work, and market solutions. Our task is to turn this crisis of fear into the promise of hope." There are no easy solutions to the foreclo- sure crisis and the upheaval it has brought to our communities. The crisis has hit hard, and there is plenty of bad news to go around. But we can also take heart. New ideas, part- nerships, and solutions are emerging. The community development industry has over 30 years of experience and ingenuity. This time of unprecedented challenge has created an opportunity for the industry to reexam- ine its approaches to neighborhood-based revitalization and community development. It has also created an opportunity to collabo- rate, think holistically, and reposition efforts to develop strong, stable neighborhoods that can weather any future storm. m Andriana Abariotes is the executive director of Twin. Cities LISC. Rose Carr is an intern with Twin Cities LISC and is pursuing a master's degree at the University of Minnesota's Hubert H. Humphrey Institute of Public Affairs. 1 Foreclosures in Minnesota: A Report Based on County Sheriff's Sale Data, HousingLink, AprIl 2008. 2 Ibid. 3 Housing blight, broadly defined, refers to housing structures and properties whose physical conditions have deteriorated. 4 Foreclosure to Homelessness: The Forgotten Victims of the Subprime Crisis-A National Call to Action, National Coalition For the Homeless, April 15, 2008. News and Notes Fed releases report on con centrated poverty The Community Affairs offices of the Federal Reserve System have released a report that explores how pockets of concentrated poverty develop and why they persist. The Enduring ChaIlenge of Concentrated Poverty: Case Studies from Communities Across the U.S. is based on research conducted in 16 high-poverty com- munitieslocated invarious regions of the coun- try. Working in collaboration with the Board of Governors of the Federal Reserve System and the Brookings Institution's Metropolitan Polity Program, Community Affairs staff members from the 12 Federal Reserve Banks conducted on-site interviews and data gathering in the 16 study communities throughout 2006.One of the profiled communities, the Blackfeet Indian Reservation in Montana, is located in the Ninth Federal Reserve District. For each of the 16 communities, the report contains a detailed case study describ- ing the history, causes, and effects of persist- ent, concentrated poverty. The report also includes a discussion of the factors. that the selected high-poverty communities have in common, such as physical or geographic iso- lation and profound demographic changes. To download the report or view an inter- active map of the U.S. featuring the 16 study communities, visit www.frbsf.org/cpreport. NeighborWorks® America releases report on foreclosure counseling NeighborWorks® America (NWA) has released its first report to Congress about fore- closure activities funded through the National Foreclosure Mitigation Counseling (NFMC) Program. The NFMC Program was among the first federal responses to the nationwide fore- closure crisis. It was created in December 2007 with the passage of the FY 2008 Consolidated Appropriations Bill, which authorized $180 million for foreclosure counseling efforts and named NWA as program administrator. The report, titled National Foreclosure Mitigation Counseling Program Congressional Update: Activity through September I5, 2008, is based on data gathered from 130 foreclo- sure-mitigation and housing organizations that had received a total of $55 million in NFMC Program grants as of September 15, 2008. In addition to listing statistics about the NFMC Program's activities and funding, the report includes demographic information about the clients who have received foreclo- sure counseling through the program, descriptions of the challenges foreclosure counselors face in their work with clients and mortgage servicers, and a discussion of suc- cessful strategies that counselors employ. According to the report, as of September 15, 2008, the NFMC Program had provided foreclosure-related counseling to 105,071 homeowners in all 50 states. Of the clients served, 55 percent are female and 30 percent are married with dependents. Nearly two- ; thirds are ages 35 to 54, while one-fifth of clients are age 55 or older. A majority of the clients-52 percent-are African American, Hispanic, or Asian or Pacific Islander, although these groups make up just 18 percent of all homeowners in the U.S. More than 40 percent of foreclosure counseling clients defaulted on their mortgages because of a loss. of income. Only 9 percent defaulted because their loan payment increased. Forty-four percent of clients had adjustable-rate mortgages, or ARMS, and 45 percent had fixed-rate mort- Issue 1, 2009 gages. In comparison, 22 percent of all mort- gages in the U.S. are ARMS and 72 percent are fixed-rate. About 52 percent of clients reported spending more than 40 percent of their house- hold income on housing, while 20 percent reported that their housing payments are more than 75 percent of their household income. In addition to the $55 million that has been awarded directly to organizations that provide foreclosure-related counseling, the NFMC Program allocated $5 million to NWA to build the skills and capacity of the grant recipients. As of September 15, 2008, the capacity-building funds channeled through NWA had provided scholarships that enabled 2,555 staff members of the 130 grantee organizations to attend foreclosure counsel- ing training. The funds also enabled grantees to hire 1,035 new foreclosure counselors. To download the. report, visit www.nw.org. :~ Wisconsin Indian Business Conference, February 11, and Tribal = ' Uniform Commercial Code Training, February 12-13; Keshena, Wis. Sponsored by the Wisconsin Indian Business Alliance. Additional information: e-mail Teresa.Walker@wisconsul.gov or call 608-267-1713. Montana Indian Business Conference and Showcase. Apri120-21; Missoula,Mont. Sponsored by the Montana Indian Business Alliance. Additional information: visit www.mibaonline.org. Personal Finance Decathlon State Championship. Apri129,' Minneapolis. A knowledge competition for high school students. Preliminary rounds take place online and the decathlon culminates in a live. championship bout in April. Sponsored by the Federal Reserve Bank of Minneapolis; Minnesota Council on Economic Education, and Sit Investments. Additional information: visit www.mcee.umn.edu or call 612-625-3727.