US: Fighting Foreclosures, Making The Banks Pay

April 29th, 2013

Published on ZNet, by Stephen Lerner and Saqib Bhatti, April 25, 2013.

There are two economic stories unfolding in the United States. One is that the stock market is soaring and the super-rich are again getting richer. The very people who caused the 2008 financial collapse have seen their wealth and power grow even greater. At an investor conference in February, JP Morgan Chase CEO Jamie Dimon even bragged: We actually benefit from downturns … //

… Creating jobs by fixing the housing crisis:

  • The overhang of underwater mortgage debt is now one of the primary drags on the US economy and a key cause of the jobs crisis. Fourteen million families across the country owe $1.1 trillion more on their mortgages than their homes are worth. Even as Americans have seen their incomes slashed in the recession, they are stuck paying the banks inflated boom-era mortgages. If their mortgages were reset to fair market value, it would save the average underwater homeowner $574 per month in mortgage repayments. This would pump $95 billion a year into the national economy, creating around 1.4 million jobs.
  • Because the investors who own underwater mortgages and the banks that service those loans have been unwilling or unable to write down these mortgages on their own, cities are now looking to take matters into their own hands. Under a plan being considered by cities including Brockton, Massachusetts, local governments would use their power of ‘eminent domain’ to force banks to take a haircut on underwater mortgages.
  • The proposal calls for the cities to seize the underlying mortgage notes on underwater homes. The homeowner would get to stay in the house, but the ownership of the loan would transfer from the investor to the city. The city would pay market value for the loan, which would force the investor to absorb any potential losses. The city would then put the homeowner into a new loan with a reduced principal and interest rate. The city could either securitise the new loan and sell it to recoup its original investment or it could hold onto the mortgage and get paid back as the homeowner paid off the new loan.
  • Cities have never had a problem using eminent domain to seize homes to make room for stadiums and highways. Using it to seize mortgages to save neighbourhoods, fix city budgets and reset mortgages to fair market value would help jumpstart economic recovery at the local level.

Taking back what the banks stole: … //

… Stopping foreclosures:

  • Housing justice organisers have used some of the most militant and creative tactics to physically stop foreclosures and evictions. People have physically blocked sheriffs’ deputies – the law enforcement officers authorised to enforce foreclosures – from evicting families. Eviction blockades have successfully stopped many families from being thrown out of their homes. Hundreds have been arrested in such actions, and in some cases they have even faced down heavily armed SWAT teams trying to remove them. In Minneapolis a jury recently found home defenders innocent of trumped up felony charges that could have resulted in several years in jail if they had been convicted.
  • In Atlanta and Minneapolis, Occupy Our Homes and NOC have set up encampments around homes threatened with eviction, using nonviolent civil disobedience to physically interfere with foreclosure. These have gone on for months, with many stand-offs with the police. In New York and San Francisco, people have disrupted foreclosure auctions by making a lot of noise to make it difficult for potential buyers to hear the auctioneer. This too has resulted in many arrests.
  • These kinds of actions have stopped evictions and foreclosures in cities across the country, both helping individuals stay in their homes and increasing the ranks of people willing to directly interfere with the foreclosure and eviction machine. Occupy Our Homes has even developed a home defence manual that can be found on its website called ‘How to Defend Your Home’ that describes some of these tactics.

Taking the fight to the banks:

  • In addition to defending homes, campaigners have gone on the offensive against the banks for their role in destroying our communities. For example, after homes are foreclosed, they often sit vacant for months or even years. Vacant, foreclosed homes often become blighted, overrun with garbage and magnets for crime. Neighbours living in nearby homes are forced to suffer the consequences and local governments are forced to spend taxpayer dollars to prevent further deterioration. Communities are fighting back by collecting trash from these homes and ‘depositing’ it in the lobbies of foreclosing banks through a tactic called a ‘trash-in’. Members from Action Now in Chicago, Communities United for Action in Cincinnati, ACCE in California, 1Miami, and Occupy St. Louis are among the many who have used this tactic to force banks to deal with the neighbourhood impacts of foreclosure.
  • Move-ins have been another effective tactic that have forced banks to directly confront the human impacts of foreclosure. When a family is fighting to save their home, groups such as Occupy Wall Street and ACCE move their furniture into the branch or office of the foreclosing bank, shutting down business as usual at the bank.
  • Groups across the country have also carried out actions where they deliver giant bills at bank offices and branches, demanding that the banks pay back the money they stole from the community through illegal or unethical business practices. Sometimes the bill is paired with a giant cheque from the bank to taxpayers that community members ask the bank manager to sign. When they refuse to pay, taxpayers can foreclose on the bank itself. Another version of this involves wrapping the outside of the bank with crime-scene tape when the bank refuses to pay up. Community members in Portland, San Francisco, Los Angeles, Minneapolis, and Chicago have all used variations of this tactic.
  • Some of these tactics have also been targeted at industry gatherings and events. For example, Chicago’s Southsiders Organised for Unity and Liberation (SOUL) carried out an inside/outside action at the Mortgage Bankers Association convention. Sixteen SOUL members got arrested after setting up a living room inside the hotel where the convention was being held and refusing to leave, while hundreds rallied outside in the street and cheered them on. The American Bankers Association conventions in Chicago and Boston have been met with similar actions.
  • The ‘too big to fail’ Wall Street banks are unrepentant, unpunished, unreformed, and unsustainable. However, for those very reasons, they are increasingly viewed by the public as criminal manipulators of the global financial system. This presents us with an opportunity to ask bigger questions about how the economy is organised. If we add up all of the different groups that are doing bank accountability work, from the fights to save homes to the campaigns to win back taxpayer money that the banks stole from us, we have the beginnings of a movement to challenge the domination of finance capitalism. The seeds are being planted and will grow into a broader movement fighting income inequality and demanding the redistribution of wealth and power away from the tiny elite that now runs the country.

(full text).

(Stephen Lerner is a labour and community organiser. He is the architect of the Justice for Janitors campaign and works on Wall Street accountability campaigns. Saqib Bhatti is a campaigner with the Home Defenders League).

Links:

SEIU Organizer Stephen Lerner:

Saqib Bhatti:

about SEIU.org:

on OAC:

Justice for Janitors on en.wikipedia with it’s External Links;

Chapter 5 of Occupy Vision: InterCommunalism, on ZNet, by Michael Albert and Mark Evans, April 26, 2013;

Authoritarianism Has Quietly Enveloped Every Part of American Life: We Must Fight Back, on AlterNet, by John Knefel, April 22, 2013.

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