Occupy Foreclosures Q & Ain HPN Blog
Occupy Wall Street has chosen foreclosures as one of its priority issues to take grassroots action on in our communities. There are many tactics being proposed and tried. Project REconomy offers recommendations for the movement in Oregon based on our research, advice from our attorney network, and our experience fighting foreclosures in the state. We hope this helps protect activists, support the movement, and bring about strategic actions and powerful outcomes.
Note: These recommendations are specific to Oregon, a non-judicial state for foreclosures. They may or may not apply in other states, please check to see what laws apply in your area.
What are the risks for activists of occupying abandoned foreclosed homes in Oregon? What outcomes have you seen with this tactic?
The first question we ask with every action is “What is the intended outcome?” With home occupations, the main risk is that it is trespassing. The result usually is eviction, jail and bad press for the activists involved, not for the bank. Usually these results are not what folks are looking for. From community to community, the results will vary.
It is important to remember the banks really don’t want the homes, they want the foreclosure that triggers multiple payoffs on the loan. Therefore, the question is always why they do not work with us if they don’t want the homes. It is an issue they call “Moral Hazzard”. They don’t want anyone to know about their casino wins and want to look like the victim to keep public opinion spinning on their side.
Our research shows that a foreclosure is 46% more profitable for the banks than if the homeowner kept paying on the loan. It is not in their economic best interest to work with homeowners, which is also why about 1% of people who apply for a loan modification actually get a permanent one. Most of the “trial modifications are stall tactics for the banks who hit the homeowner with a surprise foreclosure after months of faithfully making payments.
Why are we seeing people use these tactics elsewhere in the country?
Real estate and foreclosure laws vary state to state. Our recommendations apply mainly to Oregon, where we live and work. Oregon has very specific laws for foreclosures. When we took a trip last month to Michigan we saw very different tactics. Michigan does not have the mature foreclosure laws to stop foreclosures beforehand so community solidarity and direct action becomes a model of choice to fight the banks and they are getting some good outcomes. In Oregon things play out very differently and we have not found home occupations to be very effective, but the good news is that we can easily fight foreclosures beforehand and keep families in their homes for years while the banks play their silly games.
How could occupying foreclosed properties undermine ongoing anti-foreclosure work?
Unfortunately we are still battling the perception in the media and in the public that homeowners are at fault for many foreclosures because they “bought more than they could afford.” Without wide public support for homeowners facing foreclosure and without an understanding of what is really going on with the banks, bad press could turn the tide for the worse. When we are seen being arrested for resisting foreclosure the banks often come out looking like they are “just doing their job” and we don’t get a chance to expose the systemic fraud of the banks. In Oregon we have had much better luck with beating them in the courts and demanding audits of county documents to show how big banks have been breaking Oregon law and cheating our counties out of millions in revenues for over a decade by not recording loan transactions in the counties. These actions start to tell the real story of who caused these problems, who profits from them, and who is hurt (all of us.)
How could occupying foreclosed properties with the permission of the homeowner work in the favor of big banks and hurt homeowners?
This is another issue. We are exploring getting permission from homeowners that have abandoned the property to give such permission. Some legal and liability issues arise. For example, if anyone is hurt in the house, the homeowner could be sued. In addition, who would keep the insurance up? A property could be deeded over to an organization that takes responsibility. This is a temporary situation unless the organization wants to fight for a workout with the banks and then make adjusted payments.
What about when big banks do a “workout” with an individual family because of a grassroots pressure campaign to “Save Suzie’s home?”
We often see the banks under pressure because of a grassroots campaign to stop Suzie’s foreclosure come forward and give a trial modification to the homeowner, promising a permanent fix within 3 months. The homeowner and grassroots action group think they have a solution and won. The bank gets massive positive press attention for being the good guy. Then the bank stalls the permanent modification, drags the process on for 9 to 18 months and foreclose on the homeowner when they least suspect it. By this time the grass roots group is usually gone. It is a very sad ending and the banks make out like bandits.
The other part of this is that the problems with foreclosure are systemic, not just an “oops” here and there where the banks “missed something.” These types of campaigns give banks an easy out by saying “sorry” and then “fixing the problem” when of course the real problem is the way the banks have done business for over a decade and these problems affect all of us. That is the story the big banks don’t want exposed.
How do foreclosures affect renters?
Many rental property owners have refinanced their properties on an adjustable rate mortgage that has adjusted up and now the rents no longer cover the payments. If the property can’t cover the difference somehow they are stuck because there is no way to refinance. Thus, the rental property ends up in foreclosure and the tenants are often evicted with little or no notice. We had one family that called us in tears after being evicted for the third time. The single mother of three children was distraught about the situation. She had never missed a rent payment and she was having to move her children to a new school for the third time. New national data shows that 8.3 million Children are being effected by foreclosures and about 1/3 of those are in rentals.
Another way foreclosures impact renters is by driving up rent prices. As families are increasingly displaced from the homes they used to own they are forced into the rental market, which drives up demand and prices.
Los Angeles County put in a new law that did not allow tenants to be evicted. This is an avenue worth considering in all our communities.
How do foreclosures affect the homeless?
The foreclosure crisis creates a devastating cycle: homeowners are priced out of their homes, often through jobs loss, and become renters. Renters are priced out of rentals because of the flood of newly renting families due to foreclosure, and the people who were just making it as renters before this mess are becoming homeless. Those who were houseless to begin with now face a difficult time getting any community help with shelter, food or other basic needs because of increased demand on an already shrinking, overburdened safety net and a community that doesn’t know what to do.
What else have groups in Oregon tried? What other strategies does Project REconomy recommend?
- Canvassing – Project REconomy can provide Occupy members with lists of foreclosed properties in their county. These doors can be knocked on and given literature about help available. Project REconomy offers phone training on how to approach these homeowners in a productive manner. Remember, fear and shame are a huge issue here. We are seeing huge momentum in Oregon by standing together, stopping or delaying hundreds of foreclosures and giving families their power and dignity back in these situations. By delaying a foreclosure families gain valuable time to save money for transition.
- Teach-Ins – We have several teach-ins ready to be given by leaders in your community. They are designed to educate the wider community about what is really going on with foreclosures and how we can stop foreclosures in Oregon. We offer training, materials and support if you are interested in putting one on in your community for whatever size group.
- County/city ordinances – Work with your local civic leaders to create ordinances that fine the banks leaving homes abandoned up to $1,000 per day. The banks won’t pay these fines willingly but counties have the right to foreclose on any party that has outstanding debt with them for over a year. This needs to be researched and can get leverage to get the banks to turn properties over to land banks in a community for community use. This has a lot of potential that we are just starting to dig into.
- Moratoriums – Project REconomy is working with leaders from other parts of the country to find the best way to pursue local or national foreclosure moratoriums. The steps outlined above all help pave the way for these larger solutions. We will keep you updated about what our researchers and attorney network are learning about how to implement moratoriums here in Oregon.
How can Project REconomy support the efforts of Occupy groups to work on foreclosure issues?
Project REconomy is here to partner with Occupy groups to share our research and experience, help coordinate foreclosure actions statewide, train and support local leaders, and do whatever we can to support actions that have the potential to bring forward positive intended outcomes. Our mission is to stop foreclosures and one of our goals is to build the movement for economic justice in our region. We recognize that Occupy is a leading voice, and the grassroots power that is needed to take the foreclosure fight out into our communities to make local lives better.
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