Enforce bailout bills, relieve homeowners

Michigan sheriff points the way

By Jerry Goldberg

Published Feb 14, 2009 10:37 AM

The Treasury Secretary will soon announce plans for the federal government to essentially take over the failed mortgage industry. The announcement is expected to include a dramatic expansion of the Troubled Asset Recovery Program, under which the U.S. Treasury will either directly control or have a significant interest in most mortgages, either through the creation of a special federal bank for failing loans or with enhanced federal guarantees to back up failing loans.

This is an extension of a policy already in effect. On July 30 of last year, the U.S. government took over Fannie Mae and Freddie Mac, which own or guarantee at least one-half of all mortgage loans, through the Housing and Economic Recovery Act. That laid the groundwork for TARP. In January the government announced that in addition to bailout gifts of $45 billion each to Citigroup and Bank of America, the government will guarantee $300 billion in bad loans for Citigroup and $100 billion in bad loans for Bank of America.

What this means for workers and poor

Both TARP and HERA contain buried language ignored by Congress, the media and the mortgage industry that potentially offers significant protections for homeowners.

For example, 12 USC 5219 in TARP states: “To the extent that the Secretary acquires mortgages, mortgage backed securities, and other assets secured by residential real estate, including multi-family housing, the Secretary shall implement a plan that seeks to maximize assistance for homeowners and use the authority of the Secretary to encourage the servicers of the underlying mortgages, considering net present value to the taxpayer, to take advantage of ... available programs to minimize foreclosures. In addition, the Secretary may use loan guarantees and credit enhancements to facilitate loan modifications to prevent avoidable foreclosures.”

Section 1403 of HERA amends the federal Truth in Lending Act and places a duty on servicers of residential pooled mortgages to carry out loan modifications or workout plans when the value of the plans would exceed the value to be derived from foreclosing the homes.

These loan modifications mandated by the bailout acts are significant because they force loan servicers to take into account the present value of homes and, especially in the case of HERA, the value of the homes in foreclosure. In almost every part of the country, home values have dropped precipitously, so these laws mandate significant reductions in the principal of the loans. In cities like Detroit, where $150,000 homes are selling for $7,500 after the owners are foreclosed and evicted, these laws virtually mandate turning over the homes to their current owners.

There is no effective mechanism in place, however, for carrying out the provisions embodied in TARP and HERA on behalf of homeowners. It will take a mass struggle to enforce these laws and stop foreclosures.

Sheriff Evans got it right

On Feb. 2 Wayne County Sheriff Warren Evans of Detroit, after examining the bailout bills, stopped all sheriff sales in the county. Sheriff sales are the first step in the foreclosure process in Michigan. There were approximately 500 sheriff sales per week in Wayne County.

Sheriff Evans stated, “The sheriff would violate the TARP by conducting mortgage foreclosure sales. ... The sheriff opens himself up to liability by foreclosing mortgages, or assets as they are defined in the TARP Act, that have been bought by the Secretary. The potential liability would arise if the sheriff ... forecloses a mortgage containing ‘troubled assets,’ thereby violating a homeowner’s right to loan modification, especially where the anticipated recovery on the principal outstanding obligation of the mortgage under the modification is likely to be greater than, on a net present value basis, the anticipated recovery on the principal outstanding obligation of the mortgage through foreclosures.” (www.waynecounty.com/sheriff)

Evans said he would not break federal law by continuing to carry out foreclosure sales.

Sheriff Evans got it right. It’s important for activists throughout the country to express their solidarity with his actions, which are under severe attack from the finance industry and the media. Email your support to Evans’ press secretary at jroach@co.wayne.mi.us. Sheriff Evans’ actions set a precedent for the entire country and provide activists with ammunition to demand that local government bodies that carry out foreclosures in their areas immediately cease and desist.

Goldberg is a Detroit attorney and organizer with the Moratorium NOW! Coalition to Stop Foreclosures and Evictions.

---

Articles copyright 1995-2009 Workers World. Verbatim copying and distribution of this entire article is permitted in any medium without royalty provided this notice is preserved.

Workers World, 55 W. 17 St., NY, NY 10011
Email: ww@workers.org
Subscribe wwnews-subscribe@workersworld.net
Support independent news http://www.workers.org/orders/donate.php

Jobless, facing eviction, a Detroiter checks out

Monday, February 16, 2009

In his despairing leap from his downtown 16th-floor apartment window two weeks ago, Timothy H. Regan, who once worked in finance and human resources for General Motors, ended his life in the shadow of the Renaissance Center.

When a 36th District Court officer opened the apartment door to evict the former clerk on that frigid Jan. 29 morning, he found the living room occupied only by an empty reclining chair and an open window.

The court officer, Cieve Turner, didn't wonder about the window, which had been laboriously unscrewed. He and three other employees closed it, then cleared out the clothing from a walk-in closet in the $956-a-month apartment. As they left the building, they heard sirens.

"Why did he have to put that on my conscience?" Turner wondered later.

Regan's last act, in its suddenness and horror, stamped an exclamation point on a life that might otherwise have ended in an ellipsis, trailing off inexorably in the almost three years since he lost his job. He left behind no wife, no children, no debts, no note or final phone call to either of his two older sisters or his friends. His Detroit friends believed he was moving back to Marine City, his hometown, and gratefully accepted his possessions. On the morning of his death, he even helped move his treadmill to a neighbor's apartment.

His Marine City relatives, including a slew of nieces and nephews who loved their Uncle Tim, thought he was living happily at his Millender Center apartment, enjoying the big city life of baseball games and People Mover rides.

'I was devastated'

"We were supposed to go to a hockey game ... I was devastated. The last time I saw him, he was vibrant and loquacious; that was his personality," said Darby O'Toole, who knew him as a fellow regular at a Detroit brew pub.

Tim Regan was a middle-aged man -- a generous, sweet-faced, well-liked man -- who had no fallback plan when he was terminated by GM in April 2006, and who had too much pride and too few supports to reach for help in the years that followed.

When he became a corporate discard on a much-publicized "Black Tuesday," he couldn't have known how much bleaker the days ahead would be.

For almost three years, he maintained what looked much like his life before -- the one-bedroom Millender Center apartment, the downtown bars where he nurtured friendships, playing darts at the Old Shillelagh, sipping from his numbered mug at the Detroit Beer Co., the acquaintances and friends who laughed with him.

Few of his acquaintances ever heard him complain or express bitterness about the abrupt ending to his career. Friends who would gladly have helped him didn't know how needy he was, as his severance pay, his health benefits and then his 401(k) savings gradually disappeared.

Occasionally, he worked at a friend's machine shop. "Guys have to work," his nephew Kevin Quail said, trying to explain his uncle's sadness. "That's who they are."

But Tim Regan's physical disability -- the odd gait and weakened legs he was born with -- made it difficult for him to get around. A premature baby, he had a mild case of cerebral palsy. That condition had made his work in the RenCen so ideal: He could walk through an elevated tunnel directly from apartment to office, or whip around downtown on the People Mover.

"He didn't really have it in him to go out and look for a job. That just wasn't Tim," said Tia Welser, his sister.

Friends say he was less than two years from qualifying for retirement when he left, at a time when forcing out white-collar workers was still unusual at the Big 3 auto companies. In his human resources job, Regan processed the paperwork of employees being laid off. Then he was one of them.

The disparity between Regan's outward mood and his inward despair came as a shock to many who thought they knew this gentle man, in his baseball cap and with a crooked grin.

"He was always smiling, always happy," said Brian Pittman, a Detroit teacher and one of 30 friends and relatives who gathered to remember him at Regan's favorite bar last week. Pittman, a Millender Center neighbor, spent New Year's Eve with Regan. But the two of them never talked about money or women, both subjects that Regan avoided, often with a smirk and a "whatevvverrr."

In the face of disappointment and loss, he laughed or changed the subject. "He was the kind of person who was competitive. He liked to wait until the last minute. At Christmas, we'd never know if he was going to come or not," said Welser.

The end came after a series of eviction notices and a rap on the door, the knock he was almost surely waiting for. Outside, court officer Turner heard a noise and waited for the door to open. When it didn't, he and his men and an apartment manager walked in.

What remained of Regan's possessions went into a Dumpster downstairs.

He enjoyed independence

The suicide risk for middle-aged men, especially unmarried ones, doubles with unemployment. Augustine Kposowa, a University of California, Riverside, professor, who published a 2001 study on joblessness and suicide, said men over 40 are much more likely to see job loss as an imprint of their own failure.

"For older men it is harder," he said. Being a single man without children already put him at risk; the loss of his job added to it. Finally, the failing economy and waves of others' job losses could have undermined whatever hope and confidence Regan did have.

In the days before his death, less than a week before his 53rd birthday, Regan gave away his furniture, his treadmill, his laptop computer.

"We don't have anything," said Welser. "Not even a wallet or his cell phone."

Despite the many people who believed themselves to be his friends, he spent much of his time alone. His sister never pressed him or insisted on visits, because he so obviously enjoyed his independence.

"He didn't like to be told what to do," said Welser, who is 20 years older.

The gentle little man who walked awkwardly and endeared himself to others with kindness and a crooked grin stayed in character until the very end. He was OK. He was fine. He was perfectly happy.

Only the scream of his death gave him away.

You can reach Laura Berman at (248) 647-7221 or lberman@detnews.com.

Mortgage scams still rampant

Mortgage scams still rampant By Eric T. Campbell
The Michigan Citizen

DETROIT — After being forcibly evicted in January, Eugene Moore is fighting to recover his home.

His ongoing battle began in 2004 when he and others in his Northend community signed on with a Birmingham, Michigan, based company called Rym Technologies. Most of the participants were not in foreclosure but many, like Moore, were underemployed and had fallen behind on mortgage payments.

Moore says that he was given $1,500 by Rym Tech to participate in the program and was promised comparable sums for each homeowner he brought in to sign up. What he didn’t know was that Rym Tech was perpetrating a mortgage scam now known as "equity stripping." By 2006 Moore had lost all equity in his home through Rym Tech's "Mortgage Reduction" program and was in a court battle to keep possession of it.

Victims of the deception were promised a free and clear house in five years. Rym Tech promised to invest the equity in their homes in "low-risk" ventures, like apartment conversions in New York and China. Those returns would, in theory, cover fees and back mortgage payments.

more

Minnesota People's Bailout Act introduced in legislature

St. Paul, MN - The Minnesota People’s Bailout legislation was introduced in the Minnesota State Senate and House, Feb. 9. Authored by Senator David J. Tomassoni (D-Chisholm), and Representative David Bly (D-Northfield) the Minnesota People’s Bailout Act is a legislative attempt to protect the interests of low-income and working Minnesotans from the worst effects of the deepening economic crisis in Minnesota and the nation.

Deb Konechne, a leader of the Minnesota People’s Bailout Coalition and a member Welfare Rights Committee said, “The introduction of this legislation is an important step in the effort to protect low-income and working Minnesotans from the ever-growing economic crisis. The act will provide protection from most damaging affects of unemployment, mortgage foreclosures and evictions.”

The bill would extend and expand eligibility for unemployment benefits, create a new public works program to put people to work and put a moratorium on the five-year lifetime limit for public assistance. The act would also prevent the legislature from mandating layoffs of state workers, including workers at the University of Minnesota.

The bill calls for a 2-year moratorium on housing foreclosures. It also would change Minnesota law so that banks and mortgage companies that have foreclosed on rental property be required to honor the existing tenants’ leases.

“Thousands of Minnesota tenants have been made homeless because their landlord was forced into foreclosure. The bank or mortgage company ended the leases of these tenants when reclaiming the building. This is unfair to tenants who, due to no fault of their own, find themselves suddenly homeless,” said Mick Kelly, of the Minnesota Coalition for a People’s Bailout.

“Many of the foreclosed properties in Minneapolis and Saint Paul had supplied affordable rents to low-income Minnesotans. These units must be kept open and available. Banks and mortgage companies that give loans to buyers of these rental properties must accept the responsibility of those landlords. Tenants should not be victimized, first by financially failing landlords and then by the banks and mortgage companies that initiate foreclosures,” said Kelly.

The Minnesota Coalition for a People’s Bailout came together to push for support for the bill in the Minnesota state legislature. The Coalition includes members of AFSCME Local 3800, the Welfare Rights Committee, the Minnesota Tenants Union and others.

“No one in Minnesota should be cold, hungry or homeless as a result of this economic crisis,” said Phyllis Walker, of the Minnesota Coalition for a People’s Bailout and president of AFSCME Local 3800.

“The banks and corporations are getting billions of dollars to survive the economic crisis. Meanwhile, working people are being laid off in massive numbers. The People’s Bailout legislation will take basic steps in the interests of the people of Minnesota,” said Walker. “The Minnesota legislature must show that it represents the people of this state by passing this act and taking other concrete steps to protect Minnesotans from the worst effects of this crisis.”

from fightbacknews

MN Coalition for a People's Bailout

Wayne County's Sheriff Evans Stops sheriff's sales

Statement from Sheriff Warren Evans
Watch it on YouTube at: http://www.youtube.com/watch?v=gv9_TII3bXo

Today I will be stopping all mortgage foreclosure sales in Wayne
County, beginning with the sale that was scheduled for this Wednesday.

I am doing so because its my opinion that recently enacted federal laws
provide protections for homeowners facing foreclosure.

To proceed with sales without assuring that homeowners have been able
to avail themselves of those protections would put me in a position of
violating federal law.

The Troubled Asset Relief Program known as TARP that was approved by
Congress last fall requires the Secretary of the Treasury to implement a
plan to mitigate foreclosures.

That includes encouraging servicers of mortgages to modify loans to
enable homeowners to stay in their homes.

Federal law preempts state law, which means the TARP provision preempts
Michigans foreclosure law.

That, in turn, means foreclosures cannot move forward until efforts to
modify the mortgages of homes covered by TARP have been exhausted.

As a result, I have determined there are sufficient legal grounds for
me and for other sheriffs in Michigan to halt mortgage foreclosure
sales.

I cannot in clear conscience allow any more families to lose their home
through foreclosure sale until Im satisfied they have been afforded
every option they are entitled to under the law to avoid foreclosure.

There is no way to immediately determine which of the approximately
300-400 homes that come up for sale each week in Wayne County are
covered by TARP protections and which are not.

As a Constitutional officer & officer of the court, I have both a legal
and moral obligation to make sure that all legal remedies have been
exhausted before a homeowner loses their home.

Since homeowners lose their rights to a property once a foreclosure
sale is complete, the only fair course of action is to halt the
foreclosure sales. As a result, the foreclosure sales that have been
held every Wednesday and Thursday are being discontinued.

My office will work with lenders and with homeowners facing the threat
of foreclosure to make sure that homeowners are being provided every
option they are entitled to under the law to avoid foreclosure.

Mortgage modifications could include acquiring a lower interest rate,
forgiveness of past defaulted payments, reduction of the monthly loan
payment or perhaps the lowering of the loan principle, to give just a
few examples.

Any of these modifications could mean the difference between families
keeping their homes or being forced out of them.

After speaking to and meeting with lawyers who represent foreclosed
homeowners and mortgage lenders, I have come to understand that very few
homeowners have been able to avail themselves of this financial life
raft.

In other words, many of the properties that come to the Sheriffs sale
each week likely are covered by the TARP. But we have no way of knowing
which ones. And we have no way of knowing which of those covered by the
TARP actually have been provided any assistance under the program.

As a result, I am halting all foreclosure sales. And I am urging all
Michigan sheriffs to join me in implementing this moratorium on
foreclosure sales.

In doing so, they will assure that Michigan homeowners have every
opportunity to renegotiate their mortgages before they are subjected to
foreclosure proceedings.

MORATORIUM NOW COALITION SUPPORTS WAYNE COUNTY SHERIFF WARREN EVANS’ APPLICATION FOR GOVERNOR GRANHOLM TO DECLARE MORATORIUM ON FORECLOSURES IN WAYNE

Press Release

MORATORIUM NOW! COALITION TO STOP FORECLOSURES AND EVICTIONS

23 East Adams, 4th Floor, Detroit, MI 48226

FOR IMMEDIATE RELEASE January 27, 2009

Contact: 313-319-0870

MORATORIUM NOW! COALITION SUPPORTS WAYNE COUNTY SHERIFF WARREN EVANS’ APPLICATION FOR GOVERNOR GRANHOLM TO DECLARE MORATORIUM ON FORECLOSURES IN WAYNE COUNTY

DENOUNCES GRANHOLM’S REJECTION OF APPLICATION AS LEGALLY INDEFENSIBLE AND AN AFFRONT TO POOR AND WORKING PEOPLE

ANNOUNCES PLANS FOR DEMONSTRATION AT STATE OF STATE ADDRESS,

TUESDAY, FEBRUARY 3, 2009, 6:00 PM AT THE STATE CAPITOL

The Moratorium Now Coalition to Stop Foreclosures and Evictions fully supports Wayne County Sheriff Warren Evans’ effort in applying to Gov. Jennifer Granholm for a Declaration of a State of Emergency in Wayne County and the imposition of a six-month on Moratorium on Foreclosures in Wayne County to meet the crisis.

Governor Granholm’s summary rejection of this request is an affront to the poor and working people in Wayne County suffering every day from the foreclosure epidemic that is destroying our communities. Last week the Detroit News, citing Realcomp, reported that the median sale prices of homes in Metro Detroit due to foreclosures fell to $57,000 in 2008, a 46.3% decline from 2007’s median sale price of $108,100. In the City of Detroit, the median sale price for homes dropped to an astonishing $7,500. Despite the false pronouncements of “loan modification programs” by many banks and mortgage companies, foreclosures and evictions are continuing unabated in Wayne County. Every day seniors as well as unemployed workers are being thrown out of their homes.

Jerry Goldberg, an attorney who defends individuals facing foreclosure, and a member of the Coalition, stated: “Governor Granholm’s statement that she does not have the legal authority to declare a moratorium is absolutely incorrect. In fact, under Michigan law pursuant to MCL 10.31, the governor is invested by Michigan law with the power to declare a State of Emergency in times of great public crisis either in a particular locale on application of a mayor or Sheriff, or statewide; and to promulgate reasonable rules, orders and regulations ‘necessary to protect life and property or to bring the emergency situation within the affected area under control.’ In Walsh v City of River Rouge, 385 Mich 623 (1971), the Michigan Supreme Court held that the emergency powers to invoke and act on a State of Emergency were exclusive to the governor.

“In Russell v Battle Creek Lumber Co., 265 Mich 649 (1934), the Michigan Supreme Court upheld the emergency moratorium statute, Act No. 98, Pub. Acts 1933, which with subsequent amendments placed a five (5) year Moratorium on foreclosures in Michigan during the 1930’s depression.

“The Michigan Supreme Court adopted the ruling of U.S. Supreme Court in Home Loan & Building Loan Ass’n v Blaisdell, 290 US 398 (1934). In that case, in upholding a Minnesota Moratorium on Foreclosures, the U.S. Supreme Court held that upon a declaration of a State of Emergency and pursuant to a state’s police power during an emergency economic crisis, a moratorium on foreclosures was constitutional, and that a state’s power to protect the health and welfare of the people during crises essentially superseded the contract clause of the constitution. In Makar v Peoples Wayne County Bank of Dearborn, 284 Mich 489 (1938), the Michigan Supreme Court again upheld the constitutionality of the Michigan Moratorium Act, which had been in effect for four years when this case was decided. The Court noted in upholding this Act that one of its purposes was ‘to prevent valuable property from being sold at distress prices occasioned by an economic emergency and to give mortgagors a chance to preserve their equities.’ ”

The Moratorium Now Coalition will be demonstrating in Lansing at the State Capitol on Tuesday February 3, 2009, at 6:00 p.m. when Governor Granholm gives her State of the State address. For transportation information call 313-887-4344. Coalition website is moratorium-mi.org.

Draft Emergency Bail Out the People Program

Bail Out the
People Movement
FIGHBACK CONFERENCE
Draft Working Paper
Realizing the Fightback—Some Perspective and Plans

The following was adopted at the Jan. 17 Fightback Conference in NYC. It is a work in progress.

Contents
Phase 1: Establishing a fightback program
Phase 2: May Day— a possible turning point in the fightback
Phase 3: March on Washington, D.C. for Jobs
Convening a People’s Assembly
Proposed Campaigns •Mobilizations •Draft Fightback Program
1. Campaigns
A. Organizing the unemployed on a mass basis
B. A People’s Assembly
C. Support and expand Moratorium Now!
D. Solidarity with immigrant workers
E. Recruiting an army of volunteer organizers

Link to Draft Emergency Bail Out the People Program