The Community-Wide Impact of Foreclosures

Our office took a call this week from a sobbing mother of three. “We’re being evicted for the third time, and we’ve never made a late payment.” She was a hard working single mom, exhausted and distraught at the prospect of moving out of her rental and facing the costs and stress of moving her three children again. Lisa’s story is becoming increasingly familiar as rental properties are foreclosed on and tenants are often the last to know. In fact, a new study shows that 8 million children are impacted by foreclosures nationwide, 1/3 of them in rental situations. Eviction is not the only new challenge renters face in this housing market. As homeowners become displaced, they compete with renters, raising demand and prices for rental homes. As rental prices rise, low-income folks who were barely scraping by find themselves unable to pay rent and are forced to become houseless—maybe moving in with friends or family, a shelter, or being forced onto the streets. This hurts our houseless community members as our limited “safety net” strains to meet growing needs, leaving many without the basics to survive.

You may think that the foreclosure issue only impacts struggling homeowners. The painful reality is that foreclosures hurt all homeowners, renters, and the houseless in a community-wide cycle of devastation. Actual foreclosures have displaced 4 million families nationwide, in Oregon 1 in 73 families got a foreclosure notice in 2011 alone. Yet even homeowners who aren’t struggling to pay their mortgage are being impacted as their home values are driven down by the foreclosure crisis, the drastic drop in home values has left 31% of American homeowners owing more than their homes are worth. The bottom line is that we are all in this together. Foreclosures harm everyone in our communities, from the wealthy to the houseless. We can, and must, take action together to stop them.

Organizing homeowners and community allies to fight back against foreclosures is already having a ripple effect in our communities. Oregon homeowners are fighting back together, resulting in case law that benefit everyone. A 2011 landmark court ruling, the McCoy ruling, set powerful legal precedent resulting in 75% of pending foreclosures in the state being dropped. Community members are also getting involved. There is a growing campaign in Oregon to call for audits of county mortgage records, a crucial first step toward recovering lost county revenues, stopping fraudulent foreclosures and building a case for foreclosure moratoriums. As we expose big bank fraud and stop foreclosures statewide, the result is more families stay in their homes as we work for long-term solutions to the cycle of destruction caused by foreclosure in our communities.

Because someone was there to listen, offer support and connect her to resources in the community to help her family through the transition, Lisa now knows she is not alone. Because homeowners are learning their rights and working together to stop the foreclosures that displace families like Lisa and her children, fewer families will have to experience these painful disruptions.  Together we are creating solutions at the community level to keep families in their homes, keep housing affordable, and take care of our community. To do something right now to fight foreclosures nationwide, sign our petition to end punitive mortgage rules that hurt homeowners. To join the fight against foreclosures in Oregon, register for our weekly InterOccupy call “Oregon Occupy Foreclosures” at www.InterOccupy.net.

Michelle Glass is communications director for Project REconomy, an Oregon non-profit who has led the fight against foreclosures in Oregon since 2009. They offer resources to know your rights in a foreclosure, research and attorney referral to fight back, and action campaigns to change policy and protect Oregon communities. To learn more, or to get resources to fight your foreclosure, go to www.ProjectReconomy.org.