From Bail Out the People
The recent revelations of massive fraud in the processing of foreclosures by major banks demonstrates the urgent necessity of activists to press the demand for an immediate declaration of a two year moratorium to halt all foreclosures and evictions in the U.S.
The foreclosure suspension announcements by the GMAC, JPMorgan Chase and Bank of America are to give them time to clean up their acts. But the revelations of this massive fraud by the some of the country’s largest financial institutions is symptomatic of the overall foreclosure crisis devastating the working class.
Virtually every government program announced to help homeowners with modifications is collapsing. The programs are based on the premise that the same banks that will not even take the time to properly carry out foreclosure activity — which is their primary concern — will treat borrowers who seek modifications in a fair manner when they request modifications of their loans. Borrowers are stymied by the fact that the lenders either have no one to answer the call, or when they do, the banks routinely deny the modifications in violation of their agreements with the government to carry them out. For example:
- On August 20, 2010 the New York Times reported the demise of President Obama and Treasury’s Making Home Affordable Modification program. The article reported that of the 3 million households who were intended to benefit from the program, only one-sixth had actually had their loans modified.
- In July, 2010, the Michigan State government announced it had received $184 million from the government for the Hardest Hit Homeowners Program, a program intended to keep unemployed workers in their homes. While the funding for this program has increased to $500 million, the program has been a dismal failure thus far, with only 230 homeowners of the 30,000 expected to qualify being helped.
- On August 10, 2010, the Center for Responsible Lending published the following snapshot of foreclosures in the United States. The Center reported that 2.8 million foreclosures were projected for the year 2010, and 9 million for the years 2009-2012. Foreclosures starts increased 162% between the years 2006 and 2010, a direct product of the high unemployment devastating the working class. The total lost home equity wealth due to nearby foreclosures for the years 2009-2012 was expected to be $1.9 trillion.
It is immediately necessary for the federal government to declare a national two year moratorium on all foreclosures and evictions during which payments are set based on homeowners’ ability to pay and the principal is reduced to the actual value of the homes. With the majority of home loans now either owned or backed up by the federal government through Fannie Mae, Freddie Mac, or the FHA, the president has the authority and responsibility to declare such a moratorium by executive order. The time is ripe for housing activists to organize and press this demand everywhere in light of the current revelations. Sign the online petition in support of this demand at: http://www.bailoutpeople.org/moratoriumpetition.shtml.