Foreclosure settlement no consolation for losing your home

By Michael Crenshaw, Genevieve Goffman, Nabeeh Mustafa, Jordan Benning, Greg Margolis, and Kari Koch. The authors are the co-founders of Housing is for Everyone (HIFE), a community network creatively organizing to directly address issues of housing, land, and community control of resources.

The banks have gotten off the foreclosure hook for illegally and fraudulently foreclosing on people's homes. In neighborhoods around the country homeowners were being run through an automated system that illegally processed foreclosures, robo-signing. Often, these families were then evicted from their homes, losing the wealth they had built in those homes.

The Oregonian reported earlier this week that five big banks have settled to pay $1.5 billion for illegally robo-signing mortgages into foreclosure. This amount is spread out nationally across nearly a million defrauded homeowners, and in Oregon amounts to $1480 per affected homeowner. Compare the settlement amount to the median price of a home in Portland at $225,000, and the average loss of wealth for each foreclosure nationally at $131,200 (PDF).

That is a net loss of $129,720 per homeowner because of “[the] lenders practice of fraudulently approving foreclosure paperwork without reviewing the case file, known as robo-signing, and other mortgage abuses common at the height of the foreclosure crisis,” as the Oregonian reported.

This settlement comes at a time when the profits of these banks are at all time highs: Wells Fargo recorded $4.9 billion in profits last year, Citi took in $7.5 billion, and JPMorgan led the way with $21.3 billion. This settlement is small change for some of the world's largest banks, and it is a cruel gesture to those who have had their homes taken out from underneath them.

This is not just money lost from families. This is money drained from our neighborhoods, which means it is critical resources drained from our tax base, schools, and the public commons. While our whole community is affected, the loss of wealth from the housing crisis disproportionately affects people of color. Historic communities of color have already experienced eviction in North and Northeast Portland, leading to vast displacement of communities, home-poaching development, and increased gentrification. This is not a problem that $1480 can solve.

The settlement price tag does not begin to heal the suffering of experiencing the foreclosure process and an unjust eviction from your home. This settlement is a slap in the face to families that are fighting to keep their homes and were evicted by armed police.

Meanwhile, the bankers that fraudulently took these homes sit in high rise offices downtown and continue to process foreclosures.

We need foreclosed homes returned to families, or if that is not possible, the full wealth of those homes returned. The mortgage industry is a mess, and while some homeowners are getting checks, many are still living in their homes but underwater, owing more than the home is worth because of bloated bank-driven prices.

To keep families in their homes, we need principal reduction on the bloated mortgages, and a moratorium on evictions until the full scope of the banks' fraud can be determined.

This settlement is too little, too late to save people's homes. These banks need to pay the real cost of poaching millions of dollars out of our neighborhoods and taking it back to Wall Street.

This is not just money lost from families. This is money drained from our communities and our neighborhoods, which means it is critical resources drained from our tax base, schools, roads, and the public commons. This settlement comes at a time when the profits of these banks are at all time highs: Wells Fargo recorded $4.9 billion in profits last year, Citi took in$7.5 billion, and JPMorgan led the way with $21.3 billion. This settlement is small change for some of the world's largest banks, and it is a cruel gesture to those who have had their homes taken out from underneath them.

The settlement price tag does not begin to measure the pain and suffering of the foreclosure process and an unjust eviction from your home. This settlement is a slap in the face to people who are fighting to keep their homes. It is an insult to families that were evicted by armed police.

Meanwhile, the bankers that fraudulently took these homes sit in high rise offices downtown and continue to process mortgages.

What we need is those homes returned to families, or if that is not possible, the full wealth of those homes returned to families. The mortgage industry is clearly a mess, and while some homeowners are getting checks, many are still living in their homes, but underwater, owing more than the home is worth because of bloated bank-driven prices.

To keep families in their homes, we need principal reduction on the bloated mortgages, and a moratorium on evictions until the full scope of the banks' fraud can be investigated.

This settlement is too little, too late to save people's homes. These banks need to pay the real cost of poaching millions of dollars out of our neighborhoods and taking it back to Wall Street.

About Housing is for Everyone (HIFE): HIFE emerged from the successful home defense and anti-eviction movement in Portland united around three principles: Everyone has a right to shelter that is safe and livable, stop foreclosure, unjust evictions, and no more empty homes in our communities. HIFE is currently working with nearly 20 families to publicly defend their homes against unjust eviction.

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