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Activists Demand Real Change as Foreclosures Mount
BOSTON - Hundreds of thousands of people in the U.S. continue to lose their homes each month in an ongoing crisis that is wreaking chaos on communities, advocates say.
Millions are out of work and high mortgage interest rates are kicking in, and many families can't keep up with their mortgage payments, housing advocates say. The U.S. Department of Labour reported Friday that a record number of people are out of work.
"People are so far behind,'' Stephanie Portea, director of ACORN in Florida, told IPS.
ACORN housing experts in Florida work with hundreds of families each month who are facing foreclosure, to try and help them stay in their homes. ACORN is one of many non-profits that are shouldering most of the burden of stemming the tide on a foreclosure-by-foreclosure basis.
A recent White House report found that mortgage lenders are doing little to help people facing foreclosure, despite generous government incentives to do so.
"Some of the banks are getting a bit better. But most are not,'' Portea said.
The biggest reason foreclosures are still happening is that banks are not willing to seriously negotiate the loans they made, some of which have extremely high interest rates, she said.
"It almost doesn't matter what the economy is like if the banks aren't doing loan modifications,'' Portea said.
July was the worst month yet for the number of foreclosures, according to recent reports by the private sector. In July, 8.6 percent of homeowners were delinquent on their mortgages - an increase of 40 percent over July 2008, according to Lender Processing Services.
The number of homes that have gone completely into foreclosure increased 89.6 percent since July of last year.
RealtyTrac reported that 360,149 U.S. properties were in foreclosure or delinquent on payments during July 2009. That means one in every 355 homes was issued a foreclosure notice in July, it said.
"July marks the third time in the last five months where we've seen a new record set for foreclosure activity," James Saccacio, CEO of RealtyTrac, said in a statement.
Florida, Arizona, California and Nevada are the states with the highest rate of foreclosures, and some communities are being hit especially hard.
In Fort Myers, Florida, one in every 64 homes was served a foreclosure notice in July. In Las Vegas, one in 47 homeowners received a foreclosure notice in July, and in Phoenix, Arizona, one in every 103 homeowners was served, according to RealtyTrac.
"Despite continued efforts by the federal government and state governments to patch together a safety net for distressed homeowners, we're seeing significant growth in both the initial notices of default and in the bank repossessions,'' Saccacio said.
About 29 states and some cities have scrambled to enact laws to slow foreclosures, like requiring that a judge decide if a foreclosure is warranted. Massachusetts is one state that does not have such a law and the results are disastrous for families, says a housing activist there.
"Homeowners don't get a day in court before foreclosure. They do get a day in court before eviction,'' Steve Meacham, a community organiser with City Life, Vida Urbana, a Boston non-profit, told IPS. The group is known for protesting evictions and shaming banks into backing down.
"We seem to have a lot more leverage with banks after foreclosure,'' he said.
About 2.9 million homes nationwide have already been lost to foreclosure and U.S. officials estimate that 2.5 million more people may face foreclosure in the next couple of years, a disaster sparked by what has been revealed as aggressive and often reckless mortgage making by lenders that included the nation's biggest banks.
Many of the foreclosures involved questionable loan terms, including interest rates destined to rise spectacularly after a few months of low, "teaser'' rates. The loans were made by financial institutions at a time when the value of housing was going up and up.
These sub-prime mortgages were transformed into investments by financial institutions and traded around the globe as highly risky packages.
Now it is mortgage interest rates that are going up and up, and housing value that is going down. Many houses are worth far less than what people paid for them.
In March, President Barack Obama set aside 75 billion dollars to lenders willing to negotiate with homeowners to avoid foreclosure. But the Home Affordable Modification programme is voluntary and just nine percent of the 2.7 million delinquent mortgages have been adjusted by banks, the government reported.
Among the big banks, many of which received a taxpayer bailout, Wachovia had the worst record and has modified just two percent of its bad loans. JPMorgan Chase and GMAC, formerly affiliated with General Motors, have negotiated the highest percentage of their bad loans - 20 percent.
It is unclear if the Obama administration will issue stricter guidelines for the programme. Officials did not return a request for comment.
In Boston, many homeowners are saddled with mortgages that are much, much higher than the value of the homes today.
"The untold secret of foreclosures in Boston is that well more than half of homeowners in foreclosure could afford their homes at their real value today. If the bank would rewrite the principal, they could avoid half of foreclosures. They are altering the interest rate and extending the terms of the mortgage but this is not acceptable,'' Meacham said.
Activist groups plan to target the G20 summit in Pittsburgh later this month, when high-level officials and leaders from the world's biggest economies will meet to discuss national stimulus packages and strategies to ameliorate the global economic crisis.
The Bailout the People Movement, together with some major trade unions and other grassroots organisations, is setting up a tent city and a march for jobs. Dozens of other groups are still awaiting permits to hold demonstrations, as the city prepares to deploy a massive security presence of thousands of police officers, state troopers and National Guard.
Foreclosures and unemployment go hand-in-hand.
The U.S. Bureau of Labour Statistics said Friday that the number of recorded unemployed people in the nation reached 14.4 million in August, for an overall rate of unemployment of 9.7 percent. This is about double the number of people unemployed before the recession began in 2007 and the highest rate of joblessness in 50 years.
African Americans had the highest rate of unemployment, 15 percent, of any other ethnic group.
Another 2.3 million people indicated they were barely working and wanted a job, but were no longer looking. An additional nine million people work part-time but are unable to find full-time work, the bureau learned in a survey. Together, the rate of those who are unemployed and underemployed is 16.8 percent, the bureau said.
People who are employed are working less than a full week, an average of 33 hours each week, instead of 40, because of employer cutbacks, the bureau reported.
Two nights ago in Boston, 80 people gathered outside a hotel where inside, Deutsche Bank executives and guests were celebrating an upcoming golf tournament. Deutsche bank is responsible for evicting more families than any other, according to Vida Urbana.
In the latest eviction, the tenants offered to buy the building at today's price. The bank refused. At the protest, the group sang gospel and protest songs and, "We served a notice to quit on Deutsche Bank,'' Meacham said.
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26 Comments so far
Show AllYet most of these people being foreclosed on will continue to vote into office the people responsible for the mess.
That is a very true statement. They will continue to vote for the choice of evil vs more evil. Until we have real election campaign reform and take money out of the political process will continue to have the same ole same ole.
chrisy58: "Until we have real election campaign reform and take money out of the political process we'll continue to have the same ole same ole."
Very true, but isn't the problem that we have to achieve election campaign "reform" by getting people who are already advantaged by the system (the "bought and paid for") to reform themselves out of political power? I'm going to suggest an alternative mode of "reform" that might get around this dilemma. This is that we develop political campaigns away from the incredibly expensive media-based campaigns which require inordinate amounts of money to cover them. I know it didn't require a great deal of money for Gandhi to carry out his "passive resistance" campaign against British colonialism, nor should it require so much funding if we could find ways to tap into the "sleeping giant" of populist rage about mortgage foreclosures and layoffs and furloughs and cuts in public services that will be reflected in the everyday action agenda of groups like ACORN and among the inhabitants of that "tent city" expected to arise later this month in Pittsburg.
"The people" are waiting for the inspiration and organization to let them show they can win elections and legislative battles without huge expenditures of PR-type campaign expenditures, simply by exercising the least expensive yet most precious campaign resource: their own votes and their solidarity with one another. Where are the Gandhis who will walk among the boarded-up neighborhoods of our cities and the tent cities of G-whatever neo-liberal meetings as well as those of the homeless in our own American cities? There really are things money can't buy, and the assertion of this people power can by itself drive the money changers from the temples of our democracy. So where are our Gandhis? And our Christs for that matter?
The group sang songs outside the bank celebration, in hopes the bank will sell them their homes at today's value. Good Luck!
People are paying much more than their homes are worth at today's value. You see, the bailout helped banks keep their value while home values plunged.
Now the banks expect you to payoff a house to the tune of pre-crash value... well just because they run the government! They make the laws, NOT YOU!
Nothing has changed the way banks make money, there have been no modifications to the way Wall St. does business!
Groups sitting outside the banks pleading, pretty please; can you have some mercy on us. SORRY STATE OF AFFAIRS!
The group should be singing songs outside their elected officials' offices, including the White House.
Until millions of desperate Americans are camped out in DC, Obama and Congress will continue to pander to the financial industry (which includes medical insurers) and ignoring the victims.
In 1932 millions of oppressed veterans and unemployed Americans camped out in DC. The New Deal would not have materialized if they hadn't.
raydelcamino sez: "The group should be singing songs outside their elected officials' offices, including the White House."
***
... accompanied by the Pitchforks and Torches Orchestra.
How about we all start pitching in to buy the homeless we pass on the street each day airline tickets to D.C.? Is there a legal way to for a support organization in D.C. to help feed / clothe / shelter them while they are in D.C.? 50,000 homeless arriving in D.C. would get somebody's attention (probably the police).
So you didn't read your mortgage contract. To busy enjoying your life living beyond your means.
So you didn't bother to look up who the next sock puppet that you voted for president was truly like?
So you thought you could save your home by a wage increase when wages have been frozen at 1970's income level and you live in a country with record levels of debt from wars you supported with your yellow ribbon you stuck on your car and the label flag pin you wore?
So you thought the corporate sock puppet you voted for was going to save your ass instead of handing your future taxes to billionaires?
You thought your access to good health care was a right instead of a commodity?
Stevie Wonder sang "If you believe in things you don't understand you will suffer."
Welcome to the new world order. Don't like it? Then stop blaming everything else and change yourself.
Are you excusing the banks and their corrupt fine print? One of the dishonest reasons behind bank deregulation was to make easier for banks to take away your home.
Don't blame the victim. And spare us this Rush Limbaugh "personal responsibility" bullcrap.
It's code words for "you're on your own pal, and by the way, go f*ck yourself."
I am certainly not excusing the banks. The banks do what banks do. They make money off people who do business with them. Plain and simple. Wanta make money while doing nothing lend money. Wanta pay somebody to do nothing at your expense borrow money. It's called usrury.
Are we not all responsible for our selves? Perhaps your mommy can take care of you.
You don't like that the democrats changed the usury laws under Clinton? Do something about it. Get off your ass.
In general I agree with economist Stevie Wonder. Caveat emptor, educate yourself, you have got to be smart and careful in this world. But there is a big difference in the level of culpability between the banks who loaned and the person who bought a mortgage they could not afford.
Banks are supposed to lend money and be paid back. There were governmental regulations and institutional guidelines that insured it would work like that most of the time. In the past, banks never worked on the assumption that they could act like greedy fools, take fees and commissions up front and then cry like a baby to taxpayers to bail them out.
Whatever you think of banking, responsible bankers have traditionally had ways to see if people qualify to borrow X amount of money. What happened here is that banks and mortgage brokers did not even ask for proof of income in many cases. So people figured that the bank knew what they were doing and took a lot more money than they could afford to repay. Then the banks passed the risk on throughout the economy by selling off the crap loans in disguised forms bolstered by specious math wizardry. Because of likewise crap accounting, each dollar involved this nothingness was counted several times, inflating the value of everything.
Some community organizations tried to educate consumers, but sober planning is far less attractive than getting something really, really nice that you thought you would never have. Naivete, wishful thinking and math illiteracy played roles. Also, here in Brooklyn there was a criminal element involved mortgage lending, in painting a rosy picture of home ownership and luring people in. (I am not necessarily implying that the banks are not also a criminal element).
In Europe it is illegal to sell a mortgage for more than the person can repay. Banks are supposed to have professionals to help determine what is reasonable. It should be that way here. And we should restore the distinction between savings / lending institutions and speculative institutions with something like Glass Steagall.
So it is the calculating rich bankers and brokers who should have known better who got Congress to get rid of all rules and who got Mommy (us, the taxpayer) to take care of them. Those who were duped (and a dupe always plays a part in his own downfall) got nothing.
Joe
Joe, I have to agree with most of what you have said, with one exception. It is not illegal here in Europe to sell a mortgage to someone who is unable to afford the repayments. This is the very thing which has caused this whole mess. There have been no arrests or prosecutions of anyone from the financial sector in relation to irresponsible lending. We in the UK have our own sub prime crisis, and the bank best known for bad lending - Northern Rock, were saved by the government, and are still involved in the same practices. They are also repossessing properties at a much higher rate than before.
I believe that the whole mess started like this:
The bankers, encouraged and fuelled by massive bonus schemes threw away the rule book. They looked at short term personal gain, in the knowledge that they were only trying to hit sales targets. By lending to anyone, and ignoring the guidelines on wage/loan ratios, term of loan, loan percentage, equity/value of property, almost anyone was able to afford a property.
The next stage saw the sellers of property being encouraged by real estate agents and financiers to inflate their prices, thus forcing buyers to borrow more and more money.
I would personally like to see everyone in the country on the same mortgage rate, and for the banks to be regulated properly. I also think that the banks should be made to take full responsibility for bad lending, and that foreclosure should be the absolute last option.
Thanks - I overstated. It is illegal to overlend in some UE countries, like France for instance. Since the Reagan-Thatcher love fest, the UK has become more like the US in many ways, including playing fast and loose with money and the truth.
Joe
Okay, you've read the article. Now consider the impact of one foreclosure on every 50 to 100 homeowners on a politician.
That's right. They don't give a damned. They are owned by the bankers who only see an opportunity to profit from more public misery. They don't care. They won't help.
Our government is unresponsive and irresponsible so you need to go somewhere else for help and compassion.
Go door to door in your neighborhood. Offer your neighbors a small interest payment in return for having them pay a tenth of your mortgage payment for a year. You agree to pay it back in two. Do this with 10 people. No bank will agree but your neighbors might. We need to become each others' bankers. Fuck the middle men.
It's time for groups of people to show up at the homes of the bankers and CEOs who have been awarded bonuses out of taxpayer "bailout" funds, and to hold those people accountable.
"Give Back the Bonuses!"
How about foreclosing Obamination's presidency?
Abendland September 6th, 2009 1:43 pm....You have my vote...but, Biden....could be worse. How about foreclosing the whole damn government?
If you live in NYC, walk in different parts of the city and take note of the empty commercial spaces -- small spaces, large spaces and entire blocks are empty of businesses! Most of the spaces have emptied out since the holiday season ended in January of 2009. No part of the city is immune from this looming mess! Both Michael Hudson and Paul Craig Roberts, economists, write about the commercial real estate market being the next big shoe to drop!
And, every day, I see new empty spaces. But, they are building new spaces -- on about 100th and Columbus Avenue, a new complex is being built, with Whole Foods already open.
I will also point out that more banks are popping up across NYC in some of the empty spaces -- all with new slogans. Do we really need more banks in NYC?
Bank of America claims: New Locations, New Relationships, New Opportunities!
Deutsche Bank claims: Social Investments: Creating Opportunity; and Sustainability: Ensuring Viability!
Citigroup claims: We Work To Provide Stability Today!
Oh, and there's more. You can read the newly found civic-minded ads in their windows.
In Noam Chomsky's recent speech, posted on CD, he stated that "Finance constituted a few percentage points of GDP in 1970, and has since risen to well over one-third, while productive industry has declined..."
Once in while, I see that people have taken the time to write on the windows of the new empty spaces -- "NO MORE BANKS!"
I'm not the only citizen who notices.
Wall Street Banks and the Republican Congress set this catastrophy up. Such human suffering at the hands of the Oligarchs and their government forments revolution. Time to emigrate or secede.
Another thing to keep in mind is that 90% of the mortgages are current. All this hoopla is caused by the banks who want to gov to intervene with a "housing bailout" an get them out of the hole they dug themselves into. They are not changing loan terms, waiting for this to reach a critical point where the administration is gonna cave in to all the "activists" and use more of our tax money to save their banker friends.
If you are not one of the forclosed ones, the big picture ain't that bad. Out of a total of 50million mortgages 2.5 million already forclosed and another 2.5million will at some time in the future. That's 10%, meaning that 90% of mortages are being paid on time. I would call that a good number.
chamelon its not that easy buddy. i was a banker and 1.25
to 2% was the normal rate and that included fraudulent
mortgages that mortgage bankers do to generate income in a
shell game that most mortgage bankers not banks play.
the level of corruption is incredible in this industry
and explains little snots that couldn't tie their shoes
making 200k. all it takes is the ability to lie to
people who don't understand the game and the bush regime
who blocked all efforts by states to regulate mortgage
bankers. bush used a little known agency to block states
from protecting their citizens.in this business nice guys
and straight shooters have a tough time making a buck
and it takes 2 yrs or so to build a solid client base.
if your a thief you just fuck everyone until theirs
no one left to fuck then you go sell cars! the banks paid bush
off to make this work and now we are all gonna pay for this!
the silver lining is that people may now be able to buy
a house with banks just trying to get them off the books.
i still get calls from old friends in that business people
that i send my friends to because i know that they are as
honest as they can be considering the rules of the game.
they ask do you want a job you can sell and i reply i
would rather cut my toes off then be a banker again.
they say you don't have to be like that about it an i
counter with you didn't understand no the first eight times
so now i have to say that! touche! their bankers so their
a little slow on honest dialogue.
The IPS reporter cites the BLS's "best" statistic for reporting unemployment, but it's not the widest measurement, which is known as U6. The U6 measure is now almost 17%, close to double the U3 index. Shadowstats alternative measure has unemployment at almost 21%!!
When writers use the U3 index, they perpetuate a fraud upon their readers. Those wanting full time employment--the basis for determining the labor force--is close to 200 Million. 21% of that figure is well over 40 million. Some have questioned the numer of uninsured. It is likely double, at minimum, the number of unemployed--80+ Million--and then we must add their children to the count, probably an additional 80+ Million. 160+ Million uninsured. And thanks to Clinton, tens of millions will soon lose their unemployment benefits. Furthermore, more will become jobless or underemployed by year-end as people continue to cut spending in order to prepare themselves for the time they become unemployed. And the worst has really yet to come.
If the gutless sellouts in Congress had done one thing when it was being discussed when the loan restructuring was on the table none of this would be happening. In the damn bill was a clause that allowed judges in foreclosures to re-structure the loans from the bench. The banks screamed about it and the traitors in Congress just folded and deleted it. So now the banks steal almost a trillion dollars from the people and then turn around and f$%k them by just keeping the money. Lives ruined, neighborhoods destroyed for what? who are they going to sell them too? Even when they do sell it will be at market rates. Why not just restructure the notes to market rates? Whats the point in all the greed driven heartache these bastards are causing. I always used to buy into the notion that America is the golden land and socialism is bad, but after seeing what capitalism really is I realize I was wrong. America needs a socialist revolution. We need a Fidel or a Che to take back this country. A revolution that will put the welfare of the people first, that will guarantee healthcare and an education through graduate school for all. We may not have the material things but look at the cost. Look at the risk of no health care, the risk of homelessness, the risk of winding up on the treadmill of the criminal "justice" system if you can't afford an education. I say the quality of life should exceed the quantity of life. Viva La Revolucion.
I agree the national government needs replacing. But is it what really needs to be overthrown, or is it the Plutocracy that owns the government because of the way its currently formatted? And do we really want a Caudillo as a leader? There wasn't one in 1776; there was a committee, as strange as that sounds today. What is there to prevent YOU from becoming a leader? I submit that if you have enough courage in your convictions to comment in a forum like this, then you have enough courage to become a leader. We need lots of leaders. Are you up to the task?
What's funny is thousands of teabaggers are headed to Washington to protest the Obama administration.
Will they be met with teargas?
They want power back, they say they want to put "real" conservatives in the White House, not the cons they got with the Bush administration.
Should we march with them? We both agree on cleaning up Congress, it's just that we know the problem from another standpoint.
Maybe if we mingle with the baggers, some of our ideology will wear off. No kidding we have a lot in common, and these people are searching for answers as are we.
Time to blow off our differences but not our principles. I can accept conservative principles. I can't accept being lied to.
Being Progressive / Populist, I follow the simple rule; do no harm to others. Can the same be said for Conservatives?
True Conservatism is about being fiscally responsible too. Didn't get that from the Bush Administration, and amazingly the Clinton administration did a better job of Growing the Economy.
If we don't join together with our neighbors we will be divided by the SPONSORS of the teabaggers.
We KNOW who they are!
BAMBAM is really busting (his)? balls to tighten rein on banks that have received billins in bailouts.