State Sen. Moua, responding to media inquiries, talks about her family’s home foreclosure

“My family and I are not homeless; we've never been homeless," Sen. Mee Moua said in explaining the circumstances surrounding her extended family's loss of their home.
MinnPost photo by Joe Kimball
“My family and I are not homeless; we’ve never been homeless,” Sen. Mee Moua said in explaining the circumstances surrounding her extended family’s loss of their home.

Facing a flood of calls from reporters wanting to know more about her personal housing crisis after the Pioneer Press broke a story this morning about her extended family’s foreclosure, state Sen. Mee Moua faced a dozen reporters and photographers this afternoon at a Capitol news conference.

The story outlined how Moua, her husband and three children had been living with her parents in a large five-bedroom house in St. Paul until this summer, when the house — owned by her parents — ended up in foreclosure.

Moua’s brother and sister own two other homes on the same cul-de-sac, forming a kind of family compound, so her family, and her parents, have been living in those houses since June.

Moua said she and her husband — who was a Realtor but has since found other work — contributed to the mortgage payments and other costs while they lived with her parents, but she would not describe the amount of their contributions. She is not listed on the financial papers related to the foreclosed house; only her parents are.

“[My parents] tried to make it work; the mortgage company wouldn’t modify the loan, so they were forced into foreclosure,” she said. “They loved that house. It was an important part of their lives. But this is hardly unique. We are very fortunate to have the means to deal with this setback. It was hard for us, but less hard because we had so much family support.”

She said her parents were unable to make the payments on their large mortgage on the house — a $640,000 mortgage that eventually rose to $712,000 when delinquent amounts were added.

They’d paid $800,000 for the house in 2005 but saw its value plummet during the recession; it was sold recently by a bank for $379,000.

Moua is not seeking re-election to the state Senate but emphasized that her decision was not related to her family’s housing problems.

“My decision not to run was about my children and their future, and being the right kind of mom for them,” she said.

Moua also criticized the Page One headline in the Pioneer Press that stated her family is homeless. (The headline on the online version of the story was changed during the day to say the family had lost their home.)

“My family and I are not homeless; we’ve never been homeless. There are many people in our state who are homeless and need our help,” she said, noting that more than 9,000 people in Minnesota will not have a place to sleep tonight.

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Comments (22)

  1. Submitted by Cathy McMahon on 09/17/2010 - 06:51 pm.

    Okay, so an outgoing legislator has personal financial problems. Reportable? Maybe, but how absurd, political and rude that the Pioneer Press to put it on the front page!

  2. Submitted by David Willard on 09/17/2010 - 10:17 pm.

    Don’t kid yourself. If it was Bachmann, there would be much more cackling and high-fives among the mid-stream Minny media, especially here.

  3. Submitted by Gregory Lang on 09/18/2010 - 05:20 am.

    Note to pile on but in 2005 State Sen. Moua should have been one of the most knowlegeable people around on real estate and mortgage issues but still she seemed to conjure up the worst case scenario.

    The homeless comments by the Pioneer Press seemed total inappropriate.

  4. Submitted by dan buechler on 09/18/2010 - 09:03 am.

    How does one define homeless? This is an open ended question.

  5. Submitted by dan buechler on 09/18/2010 - 09:11 am.

    Looking at wikipedia one comes across the name of Bruce Vento and his authorship of a bill to deal with homeless. Possible story here with the local angle and all.

  6. Submitted by Dennis Tester on 09/18/2010 - 10:09 am.

    The obvious question is how did her elderly immigrant parents qualify for an $800,000 loan? What role, if any, did her realtor husband have in helping them obtain the loan? With over $70,000 in past due payments, it was probably quite some time since a payment had been made. Did it correlate to when Moua’s husband lost his job? i.e., was the house actually being paid for by her husband and not her parents?

    OK, let’s cut to the chase. Was there fraud committed in applying for the loan?

  7. Submitted by Bob Josephson on 09/18/2010 - 11:46 am.

    I have no need to pile on or criticize, but I have not been able to ascertain if this is a case of the borrowers not being able to continue to make the payments in any circumstances or if it is a calculated walk-away (abandonment), justified in their minds as the value had dropped to the point of being a losing proposition.

    I empathize with anyone who loses their home regardless of the circumstances. However, I think the issue needs to be addressed in a larger context. NPR had a poll yesterday on the same subject.

    I am not surprised this modeled behavior is being emulated more often in the consumer sphere based on stories of large corporations sometimes using bankruptcy as a strategic decision rather than a necessity.

    May I suggest a story on other home financing models? I believe I heard a story about how some European countries use a bond sale arrangement. It that case, if the value of the collateral goes down, the bondholders can make the choice as to whether to hang on to the debt hoping it will get repaid or to sell at a discount, possibly back to the homebuyer.

  8. Submitted by Sharon Anderson on 09/18/2010 - 03:42 pm.

    Sen. Mee Moua is a Lawyer_ If the Paper did their homework the issue should have been published sooner…….

    Moua denied the Public Access to the Judiciary

    Don Mashak TEA PARTY / MINNESOTA JUDICIAL REFORM AND ACCOUNTABILITY: Folks, it would be great if each of you could call the chairs of the house and Senate Judiary Committee, Representative Mullery and Senator Moua respectively. Also call
    Senator Limmer and Senator Koch and ask them to sponsor MN HR 1632 in the Senate.
    Tell each of them to sponsor Jack Grahams Grand Jury Legislation in b…oth houses.
    Senator Moua – 651.296.5285
    Representative Mullery – 651-296-4262
    Senator Limmer – 651.296.2159
    Senator Koch – 651.296.5981

    Be polite, but dont take no for an answer, nor let them say they are too busy
    Don’t let these people be evil.

    Don Mashak
    The Cynical PatriotSee More
    TEA PARTY & LAWFUL INDEPENDENT POLITICAL DISSENT by Don Mashak: Proposed Grand Jury Legislation shak
    TEA Party and Lawful independent Political Dissent
    March 26 at 12:16am · Comment ·LikeUnlike · Share

  9. Submitted by Bernice Vetsch on 09/18/2010 - 04:15 pm.

    “OK, let’s cut to the chase. Was there fraud committed in applying for this loan.”

    OK, let’s cut to the chase. Did an irresponsible lender talk an elderly couple into a mortgage that was too big for them ever to pay off and then bundle it with other loans and sell them to some investor looking for a high return?

  10. Submitted by Gregory Lang on 09/18/2010 - 05:46 pm.

    More “cutting to the chase” in the form of “informed consent”.

    I recall State Sen. Moua doing a lot of very good work doing a lot of very good work on predatory lending before 2005. She is a lawyer and her husband was a Realtor so they had excellent access to resources. Her parents may be elderly but again, her parents had excellent in-family resources.

    There were a huge number of loans available in 2005. I bought a new $13K car then out of savings and the dealership was incredulous. They actually contacted my credit union to verify that there was no lien on the new vehicle.

    The point is that “due diligence” is required when you get a major loan to be able to pay it back. Realty has a long history of being a “boom-bust” field even for people who had been in it for decades.

  11. Submitted by Gregory Lang on 09/18/2010 - 05:54 pm.

    How does one define homeless?

    Several decades back there was the claim of “two million homeless”. When pressed, that included “the homeless people living in substandard housing”.

    My 90 year old house is in generally good condition but in sure it doesn’t meet some current code standards (IE: It would not qualify for Section 8 type rental because of things like room size, outlet spacing and closet size). On a real stretch that would make me technically homeless. Obviously “homeless” needs a tight definition.

  12. Submitted by Henk Tobias on 09/18/2010 - 07:37 pm.

    Good for her for coming out and facing the media. It was her parents not her. As for the reacist inuendo that maybe there was fraud involved because her parents are “immigrants” its hardly worth addressing, but its out there, so lets talk. Its difficult for those raised in luxury to understand but immigrants have a certain work ethic, a certain view of money, saving and what is and isn’t essential in regards to needs and wants. They spend wisely and save their money. They pool resources. They live within thier means, because they know what it is to be penniless and homeless. But didn’t coming out and facing the media like she did actually invite them to investigate to thier hearts content. Obviously she has nothing to hide, but our intrepet media will find out if she does.
    Maybe Mr. Tester or the Tea Party yahoo posting here will kick in a few bucks and fund thier own little investigation. Put up or shut up, fits quite nicely I think.

  13. Submitted by Henk Tobias on 09/18/2010 - 07:41 pm.

    Oh, with regards to the Tea Party poster: Is the comments section on Minn Post the appropriate vehicle for a political party to be advocating for political action? Is this acceptable behaviour as far as your moderator is concerned? What are the rules exactly?

  14. Submitted by Jon Kingstad on 09/19/2010 - 01:08 am.

    Dennis Tester raises a question: “Was there fraud committed in applying for the loan?”

    But he precedes it by stating, falsely, that 1) there was an $800,000 loan (rather than a $640K loan as stated in the article; and 2) Moua’s realtor husband “lost his job” (rather than “finding other work”). The insinuation is that Senator Moua’s parent committed fraud in applying and qualifying for a $640K loan on a house valued (overvalued) at $800K.

    Notice that with the loan/value ratio, the down payment on this home by Sen. Moua’s folks would have made a $160K downpayment or precisely 20% of the value of the place. What was their incentive to overvalue a property when all it did was increase their exposure to risk of loss of a valuable investment in $160K?

    Was there fraud in this deal? I don’t know but if there was and there may have been but it was definitely not on the consumer/investor side of the equation.

    Maybe there was fraud, but it was not by the people who bought the house:

  15. Submitted by Charles Leck on 09/19/2010 - 07:23 am.

    Too many silly questions asked in these comments so far. How many, many families were lured into mortgages they couldn’t afford? This was a shady, bad time in our nation’s history. Everyone should read THE BIG SHORT by Michael Lewis. The mortgage industry did us bad! Senator Moua is an extraordinary woman and I can only hope the best for her and her entire family.

  16. Submitted by Karl Bremer on 09/19/2010 - 11:00 am.

    No further comment is needed on the wisdom of the Mouas’ real estate decisions. However, what wasn’t reported in the MinnPost version that was reported in the Pioneer Press was this:

    “As a state senator, Moua earns $31,140.90 in annual salary. Between 2007 and 2010, she received an average of nearly $20,000 in total per diem Senate payments each year, according to state records.”

    While I’ve always felt that state legislators are underpaid (awaiting slings and arrows), I’ve never believed that per diem payments should be used as a means to make up for their salary. You know the salary when you run for office, and if you can’t get by on that, you better find something else to do. Rather, per diem should be used to compensate legislators for legitimate expenses incurred while they’re at the capitol and away from their home in their district, or mileage and meals purchased while they’re on legitimate legislative business away from home. Consequently, we should expect lawmakers from, say, Bemidji to run up higher per diem expenses than those living in the metro area.

    According to Google Maps, Moua’s home is 7.6 miles from the state capitol. So she’s raking in $20,000 a year for a 7.6-mile commute to a job that runs at most five to six months a year? That’s what’s wrong here. It appears that Moua is claiming the maximum per diem she’s allowed, rather than what she actually spent, to conduct her business as a legislator. Was that because she had such a big mortgage nut to make? I’ll leave that question for others to decide.

    Moua isn’t the only legislator to game the system like this. I recall when we lived in St. Paul many years ago, our do-nothing DFL representative Rich O’Connor was one of the highest per diem collectors in the House as well. But it’s high time we either start paying state legislators a liveable salary and put an end to illegitimate per diem claims, or start requiring receipts for every dollar paid out to them in per diem. The current system is untenable.

  17. Submitted by Dan Hintz on 09/19/2010 - 09:30 pm.

    Following up on Karl’s comment I actually looked up what Senators were taking for per diems. The following is a chart from the 2008 session:

    The per diem payments are actually separate from travel and lodging expenses, and Moua’s travel ($224.37) and lodging ($0.00) expenses were in line with someone living a few miles from the capitol, as are the expenses with most urban and suburban legislators. The outstate legislators have much higher travel and lodging expenses, which similarly reflects the distances they live from St. Paul. The claim, or at least the implication, that Karl is making – that Moua is making money off of her short commute – simply isn’t true.

    As for the actual per diems, which are payments for each day in session or otherwise working as a legislator, Moua’s numbers are on the high end (8th highest out of 67) but not disproprionately out of line. Everybody in the senate takes them and the amounts range from $6,402 to $16,416 (Moua took $15,744). You can argue that legislators should not be supplenting their income with per diems, but that is an argument that needs to be applied to all legislators, and not just Moua, even with her financial problems.

  18. Submitted by Gregory Lang on 09/20/2010 - 02:05 am.

    Even in 2005 it was rare to have an $800K spec (build and then hope to sell) house. The high end houses tend to be custom built with the floors, counter tops, room sizes, ect. the way you want. With two other adjacent extend family houses this was probably the case.

    The $160K down does represents 20% down. The question concerns the income qualification for the $640K loan. If the parents are technically the buyers this should be their income. Of the top of my head I would guess that this should be at least $250K.

    I don’t know but was this a “Community Reinvestment Act” related loan? The location of the new house is not “blighted” and if the CRA was focused on serving historically under-served groups (IE: Women and minorities) was the intent to include “super jumbo” loans. Again, I have no idea if CRA was involved but when I got my FHA loan there were definite loan caps.

  19. Submitted by Gregory Lang on 09/20/2010 - 05:13 am.

    I researched this a few months back and Minnesota is one of the states with the strongest laws for recovery of mortgage shortfall due to default. As they say “you can’t get blood out of a turnip” but you are liable much as you are liable if you car gets repossessed.

    We can expect lenders to due more “due diligence” to collect in the future. Again, you cannot get blood from a turnip but I do some “keyboard” research on the legal liability of assets.

    First off, I see near zero chance of state level legislation to protect “strategic default” lenders. There aren’t that many, the “poor little rich kid” doesn’t get a lot of sympathy and this will deter future lending, which will make things worse. Bankruptcy is an option.

    Again, I am trying to fathom the details of the Moua house purchase but there is the theoretical potential for potential liability if they were “defacto” participants in the purchase.

    Again, I stress I don’t know the details but if I were a collection lawyer (I am not a lawyer) I would focus on the Minnesota indigent status property transfer rulings. Basically, if a family member is headed to a nursing home and transfers their house and other assets to others, a “clawback” is allowed for a very long time period. This could be a mirror image of this logic.

    This is complicated. I’ve rented rooms to people in my house and would not expect them to be liable if I defaulted. (They would be in the “blood from a turnip” group anyway).

    The key factor might be “financial cojoinment” which you would not have with a common renter.

  20. Submitted by Thomas Swift on 09/20/2010 - 10:22 am.

    In explaining her predicament, Moua says “hidnsight is 20/20″…yeah, I hear that a lot these days.

    As for those that would use this as a case study of how greedy bankers manipulated naieve homebuyers, I have to ask…you sure you want to go down that road here?

  21. Submitted by Karl Bremer on 09/20/2010 - 11:17 am.

    Dan, this is how the State Legislature describes “per diem” payments:

    What is the current pay scale for Representatives and Senators?

    A Legislator’s salary is $31,140 per year (see the House Research Department publication State Elected Officials Compensation). They are also allowed to collect a per diem for living and travel expenses seven days a week during the regular legislative session.

    Sounds to me like “per diem” is meant for “living and travel expenses.” Pretty tough to defend even $15,744 for “living and travel expenses” for one session when you live 7.6 miles from the capitol.

    I’d call those per diem payments “out of line.” My own state senator, Ray Vandeveer, collected only $6,402 in total per diem during the same period, and he lives in Forest Lake. The only reason I singled out Moua’s is because the article was about Moua. As I said in my earlier comment, the current system is untenable.

  22. Submitted by Dan Hintz on 09/20/2010 - 12:22 pm.

    When I say that the payments Moua received were not out of line, I mean that in the context of what other senators took. Regardless of how the per diem is defined, travel and living expenses are reimbursed seperately, meaning that the distance one lives from the capitol has no bearing on the amount of the actual per diem. You can fault the whole system, but its not fair to single out Moua. As to why her payments are significantly higher than Vandaveer, she simply may have worked more days. She is a committee chair, while Vandaveer is in the minority in a Senate where the DFL holds a veto-proof majority.

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