| Exploding ARMS fuel home foreclosure explosion, Senator says (KARE-11) |
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U.S. Senator Amy Klobuchar and U.S. Representative Keith Ellison say exploding arms have contributed to an explosion in the number of home foreclosures across the nation. Millions of home owners, they say, are seeing huge increases in monthly home bills because of adjustable rate mortgages, aka, exploding arms. "What's happening is the chickens have come home to roost," Sen. Klobuchar said. When homeowners can't keep up with the increased payments, homes go into foreclosure. "It's really just a problem that we've got to get our hands around quickly," Rep. Ellison said. Klobuchar says in Minnesota, 8.6% of subprime mortgages are in foreclosure. That is the fourth highest rate in the country. "We got a call saying hey, you guys didn't send the full amount of your payment. It increased," Yvette Griffea-Gray explained from her Minneapolis dining room. Griffea-Gray says she was a month away from foreclosure before Habitat for Humanity and Acorn action group stepped in and helped them get a fixed mortgage rate she and her husband could make work. "We do have second jobs to try to make ends meet," Griffea-Gray said. The Gray's mortgage payment had gone up $700 per month. Their monthly payment was scheduled to double by 2009, and that would have cost the couple $3300/month. "Shocked, flabbergasted angry, upset. I didn't know how this could happen," Kai Gray said. What happened to the Grays is happening all over the country. Congress' Joint Economic Committee reports more than 2 million foreclosures over the next year and a half. "This is a situation where people got a mortgage and they got what is called a teaser rate. It turns out the mortgage is going up and up and up and up, so sometimes their payments are doubled or tripled," Klobuchar explained. The Senator and Representative spent part of Sunday talking to the folks who are helping home owners avoid foreclosure. They talked about bills in both the House and Senate aimed at cracking down on what they call "predatory lending." "We have this whole unregulated area of mortgage originators," Ellison said. "We'll see this industry is going to get more regulation, more background checks, more ethical standards," Ellison promised. The Grays want folks facing foreclosure to know that there is help out there; you just have to be willing to ask. "You can do something about it. It's not a hopeless situation even though it may feel that way," Kai Gray said. By: Scott Seroka KARE 11 News |
