Hi all,

Below is something I researched and wrote for groups fighting foreclosure in Portland OR. Feel free to use it and/or modify it for your area. The idea is to print out the first two pages (one on each side of a sheet of paper) and then let people go to a website for sources.

THE HOUSING CRISIS: WE ARE NOT ALONE

You can’t pay the mortgage or rent without a job. You’re out of work a) because your job was shipped to a low-wage country, and b) because the banks and investment brokers turned healthy economies into gambling casinos.

When their bets turned sour, the politicians bailed out the banks with our tax money. When you lost your job or home, some politicians did nothing. Others called you a moocher. Wall Street, the International Monetary Fund (IMF), and the European central banks propose to fix the economy by imposing austerity on the people who’ve been hit the hardest—which means cutting wages, pensions, and the social safety net.

But wasn’t the housing crisis caused by people buying homes they couldn’t afford?

No. Some people who’ve lost their jobs can no longer afford homes they purchased when times were good. Others were defrauded by predatory lenders.

Aren’t unions and “entitlement” programs the biggest contributors to unemployment?

No. Where unions and social safety nets are strongest (Scandinavian countries, Switzerland, and Germany), unemployment is lowest.

Anyone who works for a living can transition from homeowner to renter to homeless. All it takes is job loss, disability, a medical crisis—or fraud on the part of the banks.

A short history of Austerity:  For many decades, the IMF was the lender of last resort to “Third World” governments that couldn’t pay their debts to the big banks. The condition was always that those governments would impose austerity measures. This meant scrapping development projects and cutting social programs, pensions, and subsidies for food. Malnourishment and mortality rates went up. Nations that had overthrown dictators were forced to repay the debts of their oppressors, who’d flown off to luxurious exile.¹

While continuing to devour what they can of Africa, the poorer Arab nations, Asia, and Latin America, the banks have now turned to Europe and the U.S.²

Spain: 27.5% unemployment as of 12/1/12. 517 foreclosures per day. 6 million homes sitting empty. The government just bailed out one of the banks with ≈4.5 billion Euros. Per Spanish law, even after they throw you out of your home, you still owe the remainder of your mortgage, plus court fees, plus penalty interest, for the rest of your life. There is no rental market to speak of. After evicted homeowners committed suicide, the government imposed a two-year moratorium on foreclosures for people in “extreme hardship.” This will help only a very small segment of homeowners, as being unemployed isn’t enough to qualify.^{3, 4, 5, 6, 7}

Greece: 26% unemployment. Homelessness up 25% per year in the last 2 years. Suicide up 40%. Although much of the problem results from the rich evading taxes, austerity measures were imposed on the poor: pensions cut; public employee salaries cut as much as 45%. The banks will be bailed out to the tune of $64 billion. The government did impose a moratorium on foreclosures, and banks have restructured loans. Renters got no help, even when pensions or salaries were cut nearly in half. ^{8, 9, 10, 11}

Italy:  10.8% unemployment—a record high for that country. 62% of the homeless report being on the street because of job loss or bankruptcy of their small business. Austerity imposed—public payrolls cut, state health care and investments cut, the age of retirement raised. As a result, the economy got worse.

United States:  Real jobless rate—including unemployed, underemployed, and discouraged—14.4% as of 11/30/12. Over 4 million foreclosures completed since 2007. The elderly are at great risk, with an 800% increase in foreclosures since 1975, because of pension cuts and rising medical costs. Vacant homes are being kept off the market. Rents skyrocketing this year: +12.9% in San Francisco, +5% in Portland. ^{12, 13, 14, 15, 16}

The Home Affordable Modification Program (HAMP) was supposed to help 3-4 million distressed homeowners stay in their homes. Only 1 million received permanent modifications. The rest were told they had too little money, too much money, etc. Now the program has been opened to investors who own up to 4 properties. Oregon passed a law requiring lenders to go to mediation if borrowers request it. Lenders are simply ignoring the law. Congress continues to discuss imposing austerity measures on everyone except the rich. Meanwhile, life expectancy for poor people in this country has dropped sharply—but Dick Cheney got a new heart at taxpayers’ expense, despite being over the age limit.^{17, 18, 19, 20}

The rich aren’t just stealing your homes and savings. They’re eating the years off your lives. The politicians you elected do not have your back. They work for the bankers.

THE PEOPLE RESPOND

On September 17, 2011, the Occupy movement took over Zuccotti Park in NYC. By October 9, the protests had spread to 82 countries. The encampments were eventually removed by police, using batons and tear gas. ²¹  

On November 14, 2012, anti-austerity strikes erupted across Europe. Workers took to the streets in Spain, Greece, Portugal, Italy, Belgium, Germany, France, and the U.K. The police met them with batons, tear gas, and rubber bullets. ²²

Here in Portland, we need to recognize that we’re in all this economic mess together—homeowners, renters, and the homeless. We should demand:

1) Criminal prosecution of the banksters

2) A moratorium on foreclosures

3) Police protection for people, not corporate profits

Need help? Want to get involved? Call 971-266-4311.

^1-22For a list of sources, see this article at www.weareoregon.org.

SOURCES

¹Klein, Naomi, The Shock Doctrine, 2007

²Wolff, R.D., “Austerity: Why and for Whom?,” http://www.rdwolff.com/content/austerity-why-and-whom

³NY Times, “In Spain, Homes are Taken But Debt Stays,” 10/27/10, http://dealbook.nytimes.com/2010/10/28/in-spain-homes-are-taken-but-debt-stays/

⁴NY Times, “A Foregone Foreclosure,” 7/18/12, http://www.nytimes.com/2010/10/28/world/europe/28spain.html?pagewanted=all

⁵NY Times, “The Don Quixote of the Spanish Crisis,” 8/22/12, http://latitude.blogs.nytimes.com/2012/08/22/the-don-quixote-of-the-spanish-crisis/

⁶NY Times, “Unemployment in Spain Exceeds 25%,” 10/26/12, http://www.nytimes.com/2012/10/27/business/global/jobs-data-underscore-rajoys-woes.html

⁷Al Jazeera, “Spain unemployment hits record levels,” 12/4/12, http://www.aljazeera.com/news/europe/2012/12/2012124192857939301.html

⁸Washington Post, “Greece’s unemployment rate rises again,” 12/6/12, http://www.washingtonpost.com/business/greece-jobless-rate-up-to-26-percent-as-recession-continues/2012/12/06/1ff8537e-3f93-11e2-8a5c-473797be602c_story.html

⁹International Business Times, “Poverty, Homelessness, and Suicide: Greek Citizens Bludgeoned by Austerity,” 8/24/12, http://www.ibtimes.co.uk/articles/376988/20120824/greece-prime-minister-antonis-samaras-bailout.htm

¹⁰Athens News, “When foreclosure looms,” 7/2/11, http://www.athensnews.gr/issue/13450/44177

¹¹NY Times, “Greek Government and Public at Odds over New Cuts,” 9/5/12, http://www.nytimes.com/2012/09/06/business/global/greek-government-and-public-at-odds-over-new-cuts.html?pagewanted=all

¹²Portal Seven, http://portalseven.com/employment/unemployment_rate_u6.jsp. This site charts unemployment rates from 2000 to present.

¹³CNN Money, “Foreclosures fall to lowest level since 2007,” 1/18/12, http://money.cnn.com/2012/01/12/real_estate/foreclosures/index.htm. “While the declines seem like good news for the housing market, where a flood of foreclosed homes has depressed home prices, much of it is due to processing delays caused by fall-out from the "robo-signing" scandal that broke in late 2010.”

¹⁴NY Times, “Facing Foreclosure after 50,” 7/19/12, http://www.nytimes.com/2012/07/19/us/foreclosure-rates-surge-for-older-americans-aarp-says.html.

¹⁵The Oregonian, “Apartment rents rise and vacancy falls in year’s second quarter,” 7/5/12. http://www.oregonlive.com/front-porch/index.ssf/2012/07/apartment_rents_rise_and_vacan.html.

¹⁶San Francisco Examiner, “San Francisco housing market looms bigger than ever,” 7/17/12, http://www.sfexaminer.com/local/2012/07/san-francisco-housing-market-booms-bigger-ever.

¹⁷Aol Real Estate, “Has HAMP Gotten Any Better at Helping Distressed Homeowners?,” 8/15/12, http://realestate.aol.com/blog/2012/08/15/has-hamp-gotten-any-better-at-helping-distressed-homeowners/.

¹⁸Realty Trac, “HAMP Program Opening Up to Real Estate Investors,” 3/8/12, http://www.realtytrac.com/content/videos/hamp-program-opening-up-to-real-estate-investors-7066.

¹⁹The Oregonian, “Lenders not engaging in Oregon foreclosure mediation program,” 8/29/12, http://www.oregonlive.com/front-porch/index.ssf/2012/08/lenders_not_engaging_in_oregon.html.

²⁰NY Times, “Life Spans Shrink for Least-Educated Whites in the U.S.,” 9/20/12, http://www.nytimes.com/2012/09/21/us/life-expectancy-for-less-educated-whites-in-us-is-shrinking.html?pagewanted=all.

²¹Washington Post, “Occupy Wall Street protests go global,” 10/15/11, http://www.washingtonpost.com/world/europe/occupy-wall-street-protests-go-global/2011/10/15/gIQAp7kimL_story.html.

²²Reuters, “Anti-austerity strikes sweep Europe,” 11/14/12, http://www.reuters.com/article/2012/11/14/us-spain-portugal-strike-idUSBRE8AD00020121114.

Wells Fargo's Crimes Against Women (and Everybody Else)

I was asked to speak at the demo on April 23 in front of Wells Fargo, San Francisco. Below is an expanded and updated version of my remarks.

I was asked to speak here on how Wells Fargo's policies affect women in particular. Before I address that issue, I should say that for the last quarter century I've been working with people who became disabled through motor vehicle accidents, on-the-job accidents, or serious illnesses. First they lost their health, then their jobs and health insurance. After they depleted their life savings, they lost their homes. Seeing one person or family go through this is pretty upsetting. Hearing the same stories for 25 years, in the so-called “richest country in the world,” is enough to make my head explode.

Situations like this don't occur in civilized countries. A friend of mine who spent half her life in Europe says they have social safety nets over there. Disabled people may not live as well as they did when they were working, but they aren't thrown out on the street. Now, of course, it's not just the disabled who are likely to lose their homes.

This brings me to the issue of Wells Fargo's crimes against women. I'm sure you've heard that Wells specifically targeted black and Hispanic communities with subprime loans. Women got the same treatment. According to the Consumer Federation of America, although women and men have roughly the same credit scores, women were 32% more likely to receive subprime loans than men. This was true across the board—within every income and ethnic group. According to Maria Poblet, executive director of Causa Justa (Just Cause), the majority of foreclosures have been on female-headed households.

Men are more likely to divorce or otherwise abandon their families during times of high unemployment, so it should be no surprise that the fastest-growing segment of the homeless population consists of women and their children.

The elderly have also been targeted, and the majority of the elderly are women. If you're on Social Security and need a quick loan to fix your car or pay the 20% of your doctor's bill that Medicare isn't covering, you can get a “direct deposit advance” from Wells. They then take money out of your directly deposited Social Security check until you've paid them back. The catch is that they charge 274% annual interest. One out of four bank payday borrowers are on Social Security.

Wells Fargo has also financed some of the largest payday lenders in the U.S. Even when they aren't making the payday loan themselves, they're still sucking up a percentage of the profit.

Wells invests in for-profit prisons. You probably know that the U.S. imprisons more people than any other nation. We've got less than 5% of the world's population and over 23% of its jail and prison inmates. Over the last 30 years, the number of women prisoners here has increased by 800%. In other words, women are the fastest-growing segment of the prison population.

Wells is a major investor the two largest for-profit prison corporations, the GEO Group and Corrections Corporation of America (CCA). Here's how these corporations work: CCA recently sent letters to 48 states, offering to buy their prisons in exchange for a 20-year management contract, plus an assurance that the prisons would remain at 90% capacity. Even if the crime rate went down, the state would be contractually obligated to provide a steady stream of inmates, and pay for them with your tax dollars.

Guards in private prisons are poorly-paid and poorly-trained, and they don't have unions. According to Amnesty International, imprisoned women in the U.S. are subject to humiliation, rape, and even physical torture. Private prison food is even worse than the food in public prisons, and the medical care is often non-existent. But that's good for the bottom lines of the GEO Group, CCA, and Wells Fargo.

When I told a neighbor about the lack of medical care in prisons, he said, “Lots of people on the outside don't have medical insurance.”

“Yes,” I replied, “but if they're having a heart attack, they can always go to the emergency room. If you're in a cell the guards might just leave you there.” Many people have died this way.

Around one million prisoners of both sexes work in call centers, slaughterhouses, or textile factories, and get paid somewhere between 93 cents and $4.73 per day. They get farmed out to Fortune 500 companies like Chevron, Bank of America, AT&T, and IBM. Another plus for the bottom line, for all these companies and Wells—but not for the American worker, whose wages are being undercut, not just by Chinese slave labor but by slave laborers right here at home.

With all these lucrative investments, 2011 was a banner year for Wells Fargo. Yesterday, April 24, they voted to give CEO John Stumpf an annual salary of $13 million, plus additional compensation worth $7 million.

Foreclosure update: Sen. Shields responds

During the Christmas holidays, I received a phone call from Senator Shields. He was concerned that I had not been aware of his efforts to change the rules on foreclosures, and subsequently sent me an email outlining the work that the legislature had actually done and that he and his colleagues were proposing to do.

If passed, the bills would protect homeowners who have been subjected to the most egregious practices in the past. They would not allow banks to let you go through the process of mortgage modification and, while you think you are in compliance with everything they've asked of you, simultaneously foreclose under your nose. They would stop the banks from charging excessive fees and require pre-foreclosure mediation, etc. I have copied his email below, and request that you read and consider what he says. Together we can discuss whether these bills are worth supporting. And below his email, I have given my own opinion:


First, Sen. Shields:

"The legislature actually did pass SB 628 in 2009, that bill dealt with requiring a meeting prior to foreclosure...at least in its original form.  Here's a link to what that bill and HB 3630 from 2008 did:

http://dfcs.oregon.gov/ml/hb3630.html

"In the 2011 session, we passed SB 827 (summary attached) in the Senate, but it died in the 30-30 split House.

"But perhaps the biggest advance was removing the exemption banks enjoyed from being subject to the state's Unfair Trade Practices Act, which was a relic of 16 years of Republican control of the Oregon House.  It allows the banks to be sued by the Attorney General and/or individuals, if they engage in fraud.  We passed that in the Feb. 2010 session over fierce objection by the big banks. See here:

http://activerain.com/blogsview/2106700/what-if-homeowners-use-tools-like-oregon-house-bill-3706-to-fight-back-

"and here:

http://www.davidsugerman.com/2010/02/24/oregon-legislature-provides-consumers-with-tools-to-fight-bank-fraud/

"I have been a close partner in the foreclosure coalition that includes Economic Fairness Oregon, SEIU Local 503 and the Oregon Law Center (Legal Aid).  We decided through democratic means to go forward with the following bills.  Unfortunately, the group decided to take a different route than the one you proposed.  I encourage you to work closely with We Are Oregon, an SEIU 503 partner, to help steer the direction of the coalition.

"Here is a summary of the bills the coalition decided to pursue.  We considered yours, and I also argued for some other approaches, including making banks prove they had the right to foreclose in court, making Oregon a judicial foreclosure state.  We debated and debated and after that fairly democratic process, the group decided to move forward with the following bills:

"1) Ending the foreclosure dual track.

The dual track is a common situation of that happens when the lender simultaneously pursue loan modification or loss mitigation and foreclosure. The harm occurs when the homeowner is lead to believe the foreclosure sale has been postponed while they complete the loss mitigation review only to be surprised to learn their home was foreclosed.  This is most similar to the bill the Senate passes last session, SB 827. 

"2) Mortgage servicing rules.

These business conduct rules set a standard of good faith and fair dealing, restrict excessive fees and require a single point of contact for borrowers in default. This is most similar to SB 826 from last session.

"3) Pre-foreclosure mediation.

Requiring a review of loss mitigation options in the presence of a neutral third party has proven to be one of the most effective steps states can take to help avoid foreclosures and put both lenders and borrowers in a better financial position. So far, 24 states have adopted some form of pre-foreclosure mediation.

"4) A reintroduction of SB 827.

"I have also enclosed a summary of the first three bills and an endorsement form from Economic Fairness Oregon if you and the petitioners want to sign on.  I know these bills are not what you wanted.  You and the petitioners can decide for yourselves on whether you'd like to work to pass these bills or go another route.  We can use all the help we can get. 

"You can also help to get like-minded people elected against the wishes of the powerful mortgage-banking industry.  The Bus Project is an easy way to plug in to work on electing more progressive representatives:

http://busproject.org/

"I apologize that I didn't communicate as well as we should of.  I take full responsibility for that.

"As always, if I can ever be of service, please don't hesitate to call at 503-231-2564 or email here at my campaign address or at sen.chipshields@state.or.us."

Please note that I was unable to figure out how to link Sen. Shields' summaries of bills to this blog post. If you want those links, please email me.

And now, my comments:

My concern is that the existing and proposed legislation still leave an awful lot of people out in the cold--literally. To paraphrase the late Justice Harry Blackmun, they tinker with the machinery of foreclosure. In the meantime, we have an economy emergency here in Oregon, and everywhere else in the U.S. Millions of people have lost their jobs due to the actions of Wall Street, the big banks, and the multinational corporations. Others have lost their jobs due to illness and/or disability. (Millions of others are one major illness or one layoff away from homelessness.) These people have no way of paying a modified mortgage. Tinkering with the machinery doesn't help those who need it most. 

The current real unemployment rate, per the Bureau of Labor Statistics, is 16.2%. As others have noted, the foreclosure rate is actually higher than it was during the Great Depression.

As we all know, the banks and Wall Street have been bailed out. After exporting tens of thousands of American jobs to China, GE CEO Jeffrey Immelt was named Obama's "jobs czar." And during the last session of the U.S. Congress, Obama pushed through three new "free trade" agreements which would export even more jobs to low wage countries. When he made his speech demanding that Congress pass these agreements, Mr. Immelt stood up and applauded wildly. The point I'm trying to make is that our jobs aren't coming back any time soon. We are looking at a permanent underclass of low-wage and unemployed workers, and an increasingly large homeless population.

The proposal I've made--and the petition many of you signed--asks the legislature to think outside the current rules that box them in. A moratorium on foreclosures isn't a new idea. Many states enacted it during the Great Depression.

In the petition we also asked the state legislature to take over empty homes and fix them up in conjunction with groups like Habitat for Humanity, and make them available as affordable housing. Sen. Shields' aide said that the state can't afford it. I don't know whether Oregon could find the money somehow, but clearly this is way beyond what they would consider. IMO, we need to support the Occupy people who are taking matters into their own hands.

There is nothing sacrosanct about our predatory system of home mortgages. In Europe the government helps disabled or unemployed people stay in their homes rather than kicking them out into the street. Call it socialism if you like. I call it doing unto others.