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Mike hopes to see the world turned upside down through local communities banding together for social change, especially churches which have recognized the radical calling to be good news to the poor, to set free the prisoners and oppressed, and to become the social embodiment of the reign of God on earth as it is in heaven. He lives with the blessed memory of his wife, in Durham, NC, and has three adult children living in three different states. He also shares his life with the Mt. Level Missionary Baptist Church in Durham, the faculty and students of Shaw University Divinity School in Raleigh, NC, and the faithful fans of Duke and Baylor Basketball in his neighborhood.

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Tuesday, December 14, 2010

Pillars of the Home Mortgage Business: Fraud, Lies, Theft, and Greed

I know everyone in the home mortgage business is not a thief and liar.  Let me make that plain.

Yet it is clearly the case that the ongoing foreclosure explosion has become a money-and-power-grab by banking executives and major shareholders who will stop at nothing to make sure they don't lose a dime on their crappy mortgages, no matter how many families they have to put out on the street.  First it seemed they were simply unprepared for such a large number of mortgages going underwater.  Then it seemed they were disorganized and careless about people's paperwork.  Of course there was the disingenuous worry about "moral hazard," as if the real moral hazard had not been perpetrated by the financial system that speculated and cast away all standards in order to create more and more billions of mortgage backed securities.  Eventually it became clear that even the mortgage foreclosure cases that were progressing were not undergoing due diligence.  Then cases of "mistaken" foreclosures began to pop up more and more.  Finally, banks began to admit the ways they have been breaking the law in order to prevent loan modifications and recourse against foreclosure proceedings.  What is emerging is a coordinated and willful theft of homes from average homeowners.

So this week organizers from all over the country have converged in Des Moines, Iowa, for a summit on ending the ongoing bank misconduct and lawlessness in home foreclosures.  Gerald Taylor and I represent North Carolina United Power at this meeting, along with people from coast to coast who are fed up with the impunity of banks in the current financial crisis.  Like me, you may wonder, "Why Iowa?"

There are two reasons to meet in Des Moines.  First, Iowa Citizens for Community Improvement have a long history of making a difference for working people who are being abused by the powerful.  They are hosting our gathering.  Second, Iowa Attorney General Tom Miller is the lead lawyer for the national investigation into illegal banking activity in the foreclosure crisis.  He will meet with our group to discuss the ongoing investigation and the possibilities for working together toward a just resolution of this crisis for all parties.

We want three major elements for a just solution. 
  1. Hold banks accountable for real, transparent loan modifications with borrowers before any foreclosure proceedings, including lowering rates, to keep families in their homes.
  2. Mandate principal reduction for owner-occupied homes as a first-line modification tool.
  3. Include remedies for homeowners who have lost their homes to be reinstated as homeowners or financially compensated for the effects of this unlawful, corrupt system.
 We will not solve it with one meeting, but we hope to see another vital step this week.


Shaun Harr said...

These three demands are exactly what the mortgage lending industry needs to realize will help to end the free fall of housing prices in the most troubled neighborhoods. As more and more foreclosures occur in a given neighborhood the median price of homes drops. The banks are unable to recoup as much of the balance of the mortgage and end up losing a higher percentage of money.
Not only is working with families so that they can stay in their homes the "neighborly" thing to do, it is the very thing that will help to stabilize the housing market and help the economy to correct itself.

MIchelle said...

OMG!! This is horrible that banks would fraudulently take people's homes. That would mean that the banks are participating in the increase in foreclosure and the decrease in property values. When homes are foreclosed upon; property values decline which exacerbates the economic crisis.

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