United States:The fight against foreclosures

April 4, 2009

"You want to haul us out to jail? Fine. Let the world see how government has been ineffective", Bertha Lewis, chief organiser for Association of Community Organizations for Reform Now (ACORN), told the February 17 New York Times.

"Politicians have helped banks, but they haven't helped families in the way that it's needed, and these families are now saying, enough is enough," Lewis said.

Across the United States the economic crisis is hitting hard. Over the past decade, millions of home buyers were encouraged by banks and mortgage lenders to take out high-risk subprime loans. Typically, lenders failed to reveal the hidden fees and future interest rate increases involved.

Now, as mortgage foreclosures reach record levels, working-class people in the US are beginning to fight back.

On February 18, ACORN launched a Home Staying campaign in eight US cities as a tactic to stop foreclosures. Baltimore ACORN's Foreclosure Fighters co-chair Louis Beverly explained: "Once they have your home, there's nothing you can do except to resort to civil disobedience."

Ohio Democrat congressperson Marcy Kaptur aligned herself with the wave of these direct actions sweeping the country.

In a January 29 speech to the congress, Kaptur said: "So I say to the American people, you be squatters in your own homes. Don't you leave."

Kaptur told the February 17 NYT: "I'm thrilled that the American people are rising up and exercising the power that Wall Street has taken away from them."

The subprime mortgage crisis has thrown thousands of US citizens out of their homes, turning some suburbs into ghost towns and forcing others into tent cities and shanty towns.

ACORN estimates that up to two million families may face foreclosure in the next two years. Realtytrac.com estimates there were 5.3 million foreclosures filed in 2007 and 2008. Today, in Detroit, the foreclosure rate in some suburbs sits as high as 17%.

In 2002, ACORN reported predatory subprime mortgages were taking over the mortgage market. In a 2006 report, ACORN pointed out: "African American and Latino homebuyers were disproportionately targeted for high cost loans, even when they had comparable credit scores to white homebuyers."

Some concessions have been made to campaigners. These include some councils adopting a process of mandatory mediation before foreclosure proceedings begin. In California, a 90-day moratorium on foreclosures has been implemented, backed by ACORN.

Those fighting foreclosures have also supported a campaign that calls on tenants to demand banks trying to foreclose on a mortgage "produce the note". Due to the crisis, many institutions have struggled to produce proof of the loans' original conditions.

Even some sheriffs, who have the authority to evict home owners, have refused to carry out their "obligations" on behalf of the banks.

The sheriff of Wayne County, Michigan, suspended all evictions from February 2 until the Obama government intervenes as it has promised. Wayne County has had more than 46,000 foreclosures in the past two years.

Richard Jones, sheriff of Butler County, Ohio, told the February 17 NYT: "This is a cold place in the winter and I will not give people a death sentence for not paying their debts.

"These are human beings, responsible middle-class people who fell on hard times, and I just can't toss them out onto the streets."

Despite the importance of the response, many questions still remain about US President Barack Obama's plan to rescue home owners with a US$275 billion package.

The March 6 US Socialist Worker said: "Even if the Obama housing plan meets its objectives, millions of homeowners will be left out. According to Zillow.com, only 25 percent of homeowners have home values high enough to support refinancing under the new plan. Furthermore … owners with sub-prime loans that [giant mortgage lenders] Fannie [Mae] and Freddie [Mac] didn't insure, aren't eligible for the program."

Moreover, Obama's plan doesn't help people who have already lost their homes.

Christopher Mayer, professor of real estate at the Columbia Business School, told the March 4 NYT: "The refinance portion of the plan is set up so it provides the least help for the people who need it most… We're missing an opportunity to help many more Americans."

The Bail Out The People campaign has called for a moratorium to be imposed on all foreclosures for a five-year period. If the federal government doesn't act, then the decision should be made by state governors, the group says.

During the Great Depression, 26 US states applied moratoriums, allowing many families to remain in their homes under court-imposed conditions. At the time, the US Supreme Court ruled that the right of people to their homes in times of public crisis takes priority over contracts with financial institutions.

Baltimore City councillor Bill Henry told a January 29 ACORN town hall meeting that after "hoping for change" for the better part of a year, now is the time to start seeing some real change.

According to the February 5 SW, Henry said: "They cannot be bailing out the people at the top of the pyramid before they take care of those at the bottom."

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