WHO: Occupy Fights Foreclosures
WHAT: Open letter to California's State Senators and Assembly Members: Homeowners Bill of Rights Must Be a Strong Levee Against Coming Economic Tsunami
June 24, 2012
Dear California State Senators and Assembly Members,
We are Occupy Fights Foreclosures, a collection of foreclosure activists in Southern California who meet face to face with families who are suffering through intense trauma, fear and desperation trying to save their homes from the foreclosure machine.
Broken-hearted fathers and mothers call us at all hours of the day and night, often in tears of frustration and grief. They've exhausted their savings and every ounce of energy. They've almost universally complied with every repeated request from the bank and are still being thrown out of their homes by this machine of fraud.
We know banks used fraud as a business model to reap unprecedented profits and bonuses. The banks' fraud model has resulted in a scorched earth of foreclosures that are clearly illegal, according to San Francisco County's own audits.
And we are only mid-way through this financial crisis.
We understand what's at stake here.
There is a man-made financial tsunami coming:
- Banks have started foreclosure on more than 8.5 million homes across the country since the start of the financial crisis in 2008.
- About 70 percent of foreclosed homes have been repossessed by the banks — only about 30 percent have been auctioned or sold. That means there's a huge backlog of bank-owned homes not yet on the market.
- About 11 million homeowners are underwater — the recent AG settlement will address only about 1 million of those.
- Currently, 2.8 million people are 60 days or more behind in mortgage payments.
- Although the press is reporting increases in loan modifications, banks are simultaneously dramatically ramping up foreclosures — Bank of America has a goal of 10,000 foreclosures a day, almost double its rate of a month ago.
- California leads the nation in the highest number of foreclosures with 142,000 this past year. Florida, a distant second, had 92,000.
- Over the last 5 years, the number of CalWorks families without a permanent place to live has grown by 98 percent.
- Between 2007 and 2010, the number of welfare recipients in CA grew 27 percent, compared with only 13 percent in the rest of the country.
To face this oncoming onslaught, we need a strong levee. The Homeowner Bill of Rights has the potential to be that strong levee. Current language gives homeowners strong protections from the abuses of dual tracking. The bill enables homeowners to demand banks verify the debt and empowers homeowners to stop sales when they have a reasonable belief that the bank has failed to comply with the law. It also gives recourse for families who've been victims of fraud to sue banks directly for the abuse.
Considering that the audit done by the San Francisco Assessor-Recorder's office showed that almost all foreclosures had suspicious documentation or legal violations, this private right of action is long overdue.
For the bill to be strong, we must reinforce these pillars, not weaken them:
- The private right of action must be expressed, not implied.
- There must be no safe harbor for the five big banks that signed the settlement agreement. Borrowers must be able to sue them if they've violated an individual's dual track or due process rights.
- There must be no unfair or undue hurdles for homeowners to bring cases, such as posting a large bond or having to prove a very high standard.
- The goal is not litigation. If borrowers can sue, lenders will be more likely to comply with the law and there will be fewer violations.
Housing is a huge domino in the economy. Foreclosures and their economic fallout are what got our state budget into this mess. If we do not build strong levees to hold back this coming surge, the economic catastrophe will swamp everyone, not just homeowners. If the bill is weak, it will be as if it does not exist at all. Like the flimsy levees in New Orleans, a weak bill will do nothing to stop the onslaught.
We call on you to represent the people of this state and build the strong levees we need to hold back this bank-made economic tsunami.
Occupy LA's Occupy Fights Foreclosures
Statistics from RealtyTrac, CoreLogic, LA Times, HuffPost Business, CalculatedRisk, Public Policy Institute of California