|Ahjamu Umi, who calls himself "a recovering banker" is one a group of housing activists who have vowed to help homeowners fight eviction. He is pictured here with Annette Steele (at left) and Alicia Jackson, Northeast residents struggling to keep their homes.|
UPDATE: The City issued a vacate order to Alicia Jackson, effective Oct. 25.
A group of Portland housing activists have vowed to prevent homeowners in foreclosure from being evicted. They intend to turn out in force whenever sheriffs show up to evict families from their homes.
The law may not be on their side, but morality and justice is, says Ahjamu Umi, a member of Occupy Northeast's Black Working Group, one of five organizations that have agreed to support homeowners in foreclosure.
They hope to persuade officials to refuse to enforce evictions. That's justified, they say because homeowners were duped by unscrupulous lenders and have been denied legal redress.
"We want Portland to be a sanctuary city, where there are no empty homes," Umi says.
Activists from The Black Working Group and We Are Oregon plan to gather in numbers and block the evictions. Activists from Sisters of the Road, Portland Solidarity Network, Right to Survive and Blazing Arrow will join them in working for a community agreement to keep people in their homes.
"We've looked at 38 different cases and in all of those cases people have been victimized by predatory lending practices," Umi says.
"These are folks who have qualifying credit scores and should have been offered traditional low-interest long-term loans. Instead they were steered into high-risk loan products. In our view, this was part of a scheme to lure people into these high-risk products so their homes would end up in foreclosure."
Umi should know. He worked in the financial sector during the height of the sub-prime lending frenzy, growing increasingly dismayed by what he says were common deceptive practices.
Homeowners trust loan officers to give good advice, Umi says. But lenders make more money from selling higher-risk loans. So they ignored their responsibility to make sure borrowers could repay. They could make a loan, then turn around and sell it the next day.
In Umi's view the fraud perpetrated on homeowners steered into high-risk loans should have led to prosecutions. But faced with the collapse of the U.S. financial system, U.S. political leaders bailed out the banks and took a pass on criminal prosecutions. One concession was a $25 billion settlement.
If the big banks were too big to fail, individual homeowners were too small to save.
"The court system is completely rigged against us," Umi says. "The best we can get is that the illegal foreclosure is rolled back, and then the person has to pay a lot of money or go back into foreclosure."
They Paid and Paid Again
That's what's facing Annette Steele and Alicia Jackson, both longtime Northeast residents whose homes are in foreclosure.
Steele is a 79-year-old grandmother who was talked into taking a sub-prime loan in order to do maintenance on her home. She has lived in her home on Northeast 14th Avenue for 26 years.
"I love my house and I'll do everything I can to keep it," She says.
Jackson is a veteran of Desert Storm and Desert Shield. Her family has lived in its Northeast Portland home since the 1970s. In 2008, when the windows needed repaired, an unscrupulous lender steered Jackson into a sub-prime loan that soon ballooned beyond her ability to pay.
"If you look at these cases, they have paid far more than the houses are worth," Umi says.
Both women looked for help but found none.
Steele says she paid out $35 on three occasions, in an unsuccessful attempt to find a lawyer to fight her corner. She also paid $2,158 to American Homemakers, who promised to help her refinance, but did not give her even a receipt. She's been going to court alone and trying to represent herself for the last three years. Now, out of fear of being evicted, she naps during the day and tries to stay awake all night.
"They told me, 'You're going to be living in a cardboard box on the street,'" she says. "I'm just not going to let them walk in and take it away from me."
Terrified when she got her first foreclosure notice, Alicia Jackson moved out of her home, and turned off the utilities. But after talking to members of the Black Working Group, she moved back home and decided to fight. Part of her property already has been sold to a developer, who has built two row houses next to her home.
|African American Homeownership Fair|
The African American Homeownership Fair will have housing professionals on hand 10 a.m. to 2:30 p.m. on Saturday, Oct. 27, at Emanuel Hospital Atrium, 501 N. Graham St.
Whether you are struggling to avoid foreclosure or interested in buying your first home, more than 50 housing professionals will be available to answer questions, point you to resources and lead workshops. Professionals say that despite the housing crisis, homeownership remains an important way to build family wealth.
Homeowners who have suffered during the economic downturn, and are struggling to avoid foreclosure, will also find free advice and assistance at the fair. Chase foreclosure advisors will be available all day to talk to homeowners with Chase loans. To view the schedule of events visit www.aaah.org
Commissioner Leonard Said No
Jackson didn't realize she'd have to take on Portland City Council. The city refused to turn her water on, citing a rule that they can only turn on water for a homeowner whose name is on the title. Jackson is disputing the foreclosure, but Commissioner Randy Leonard, who is in charge of the Water Bureau, has refused to budge.
"They are hiding behind a rule that they'll only turn water on for a homeowner," Umi says. "The city is taking the side of the bank and serving as an agent for the bank.
"Where is the sense in this? Their option is to have no-one living here and to have it boarded up, deteriorated and blighted, which will bring all the properties around it down. Isn't it better to have Alicia living here and paying her bills and contributing?"
As things stand, Jackson expects police to arrive with an eviction notice at any moment. Armed with her phone, she plans to call in the community activists to help her resist.
The Housing Crisis is Over... Isn't it?
Still, mortgage lenders are back to making record profits. Lending rates are low. And Oregon's foreclosure starts dropped from 1,300 in September 2011 to 64 in September 2012.
Factor in a slow, but upward trend in job openings, and we can all rest easy. The foreclosure crisis is over! Isn't it?
For hundreds of thousands of U.S. citizens, in foreclosure or simply underwater, the foreclosure crisis is a daily disaster. An editorial in The New York Times, Oct. 22, estimates that the mortgage mess has created, "potentially millions of wrongful foreclosures, in which troubled borrowers have not been given a fair shot at modifying their loans and keeping their homes."
Oregon's numbers –stalled by a court decision that said lenders must document every title transfer in county offices— are set to rise sharply.
In April, the Oregon Legislature passed a bill that required banks to stop moving forward with foreclosures at the same time as they are in discussions with homeowners about refinancing. The bill required lenders to sit down in mediation with homeowners who request it, either because they are underwater and struggling or in default. (Oregon Passes Foreclosure Reform with One Tiny Problem: Enforcement)
The Banks Won't Play
About 200 homeowners have requested mediation. But only two government agencies that have home loan programs, Oregon Department of Veterans' Affairs and Oregon Housing and Community Services, are following the mediation law. The five big banks –Wells Fargo, JPMorgan Chase, Citigroup, Bank of America and Ally Financial – say they have no intention of complying.
"They are not participating, because frankly, the punishment is not that great," says Angela Martin executive director of Economic Fairness Oregon. "What we've seen over five years of this financial crisis is that if a program is at all voluntary or lacks teeth, it's just not in the lenders' interests to participate. We cannot get the lenders to invest in the success of our families, our communities or our economy."
Martin hears constantly from Oregonians who can't get a response from their lenders, and in many cases can't even find out who owns the title to their homes.
"There have been countless financial misdeeds at every level with no accountability," Martin says.
Banks Profits are Rising
Homeowners facing foreclosure have many hurdles to leap, just to find out who they should talk to. In Oregon lenders typically used MERS, a computerized mortgage title registration system. At least they did until the July 2012 court ruling that said lenders must record the entire ownership history of a loan in county offices, before initiating a foreclosure outside of a courtroom. The ruling shut down out-of-court foreclosures as lenders took the court route.
Ironically, banks are now posting large profits from mortgage lending. Wells Fargo, the number one lender, made $4.7 billion in the third quarter, up 23 percent from the same period in 2011. JPMorgan Chase, the second biggest lender, made $5.3 billion in the third quarter, up 36 percent from 2011.
Until recently most of the profits are coming from refinancing existing loans, however. The banks remained reluctant to originate new loans. To make lending more appealing, the Federal Reserve is pouring $40 billion a month into the economy. But lenders are refusing to reduce their rates. Most of the current profit comes from refinancing existing loans, although new loans are increasing.
Citigroup's lending however, is down 15 percent. Why? John Gerspach, chief financial officer for the company cited payments to settle lawsuits from shareholders over mortgage debt, the Associated Press reported Oct. 15.
Citigroup "had to set aside more money in case it has to buy back more mortgages from investors who bought them in the run-up to the financial crisis, and now feel ripped off."
Correction: This article was updated Oct. 24 to reflect the different roles activist groups are playing.