When Janet Johnson went to help her mother, who is suffering from Alzheimer’s, make arrangements for her care, she never suspected that it would lead down a road of home foreclosure and even more heartache. Yet, that is the road she treds, and hers is not an isolated one.
Johnson, a botanist for the Minnesota Forest Service with two children, ages 15 and 20, lives in Eveleth, a small town on Minnesota’s Iron Range. Her father Tomi – like his father before – was an iron-ore miner. Johnson herself, at age 23, spent a year working in the mine.
Tomi, like many on the Range, built his own house. Over twenty years, blood, sweat and tears paid for every inch of the home’s hand-carved granite and “drug out of the swamp” cedar boards. When Tomi died in 1984 ownership of the house went to his wife – Janet’s mother – Shirley, who worked as a nurse. But when Shirley was stricken with Alzheimer’s the county started going after Shirley’s assets to “spend down” in order to get Medical Assistance to help pay for the incredibly high medical bills and nursing home costs. The house was her biggest asset.
“If you are anticipating taking care of a parent,” Johnson told the World in a telephone interview, make sure all your parent’s business is taken care of before it is too late. “Things can change in a heartbeat.” To avoid losing the house, it would have had to have been in Janet’s name for five years before her mother needed care.
Johnson went to a realtor who suggested she talk to a local man, Douglas Ahlgren, Sr., for a loan. Ahlgren made the loan to Johnson at a sub-prime rate and charged exorbitant fees, all characteristics of predatory lending. Johnson, whose job with the Forest Service is seasonal, was struggling to make ends meet and missed some payments. Ahlgren seized his opportunity and moved to foreclose on Johnson’s home on June 2. Ahlgren refused to talk to the World, saying, “Talk to my attorney,” without providing a number. The attorney was not found in an internet search.
“They will have to drag me out of here. No way am I leaving,” Johnson said, determined to keep the family’s home. Her 15-year-old daughter is researching how to file an emergency injunction against the foreclosure. “This whole situation has made her want to be a lawyer even more,” said Johnson.
The Minnesota Attorney General’s office opened an investigation into possible illegal loan practices. They told Johnson an illegal loan practice was involved. Unfortunately, Minnesota does not have any predatory lending laws, Johnson was told. Predatory lending includes situations where a loan is made even though it’s known the borrower cannot repay. The Attorney General returned the World’s phone call, but was not able to discuss the case without first getting permission from the Johnson family.
A number of organizations nationwide have educational and legislative campaigns trying to protect the public from predatory lending practices, which are widespread. One such group – The Don’t Borrow Trouble Minnesota Campaign – was officially launched on March 5 at the State Capitol. On its website, www.dontborrowtroublemn.org, families in financial crisis, communities of color, and the elderly are defined as “vulnerable populations,” to predatory lenders.
People on the Range, like many communities, are suffering from a deep economic crisis and state budget cuts. “Another mine just closed down, 500 people lost their jobs. That’s on top of the 2,000 people who lost their jobs from a mine closing last year,” Johnson said. “This is a rural area – so these shutdowns have a big impact. Other foreclosures will be coming. There should be a moratorium on them.”
The author can be reached at talbano@pww.org
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