Foreclosures could affect student learning and school funding

The Neighborhoods Organizing for Change recently reported that more than 13,000 homes have been foreclosed on in Minneapolis over the past five years, forcing an estimated 4,000 kids to leave the city and Minneapolis Public Schools. This loss of student body resulted in a reduction of $150 million in state funding for education.

The local NBC affiliate in Minneapolis, KSTP, reported that kids who are forced to move due to foreclosure as well as students who remain in a financially stable household are being negatively affected by the foreclosure numbers in the region. The group argues that decreases in state funding per pupil will lead to school closings, teacher layoffs and a lack of supplies.

Steve Fletcher, executive direct of NOC, told the news source that is the responsibility of the banks to negotiate with homeowners to prevent future foreclosures.

"They should put every single foreclosure through a mediation process that's fair and reasonable," said Fletcher.

U.S. Representative Spencer Bachus, the chairman of the House Financial Services Committee, recently told the Mortgage Bankers Association that not only do the banks have to adjust their lending practices, but the federal government must maintain a positive role in the housing recovery, even if it is a limited role.

Reuters reported Bachus has worked with fellow Republicans to eliminate taxpayer support for government-sponsored mortgage lenders Fannie Mae and Freddie Mac and believes the government role in housing finance should be limited so private lenders can take over with limited regulations. But Bachus does not believe a governmental role should be eliminated completely, as an unregulated mortgage lending market could harm struggling homeowners in the end.

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