Friday, February 15, 2013

Don't Break Our Hearts

What social program is most important to you? Will your heart break if the U.S. slashes its funding in order to continue to pay for a bloated Pentagon budget?

Over the last 24 hours a number of community groups around the country have hand made valentine cards to Obama challenging him to cut the pentagon budget, not programs of social uplift. I've included a few of those pictures here, but you can see them all by clicking onto this link.

With all the talk of fiscal cliffs and tightening budgets when one actually looks at the federal discretionary budget there's a clear cruel irony; we are not broke.

That's right, there's actually plenty of resources to go around. The crisis we face isn't one of economic resources, it's a crisis of economic priority, and there are all to many examples.

When the economy crashed in 2008, largely in part to irresponsible, greedy banking practices that put 10 million homeowners out of their homes, how did the federal government respond? They said the banks are too big to fail and bailed them out to the tune of 800 billion. On top of the 800 billion the federal reserve began to give the big banks no interest loans totally 16 trillion dollars...16 trillion! That's enough to buy every American a home free and clear!

Have banks been held accountable for their irresponsible, felony fraud, a fraud that costs 10 million Americans and counting their homes? No, in fact they were rewarded.

The wars in Iraq and Afghanistan alone have cost over 1 trillion dollars and done nothing to make the world safer. Every dollar spent on that war should be seen as a robbery from our communities. Every multi-million dollar drone dropping million dollar missiles killing poor people abroad represents another school closing, another defunded social program, another debate about whether or not we should provide food assistance to folks who are struggling in the worst economy in 80 years.

There is no fiscal cliff, it's a moral one. Martin Luther King once said that a country that year after year spends more money on the military then it does on programs of social uplift is approaching spiritual death. I often Wonder how Dr. King would react to our current budget priorities if he were alive today.


$339 Million Being Held Back From Struggling Georgia Homeowners

This past Wednesday State Senator Vincent Fort hosted a public hearing on unfair foreclosures and mortgage loans. Around ten other legislators joined Senator Fort for the hearing, which focused on exploring a few basic questions including;

1) Why is the state failing to distribute $339 million(through HomeSafe Georgia) available to assist homeowners faced with foreclosure?

2) Why is Bank of America, and other financial institutions, not maintaining foreclosed homes in African-American neighborhoods, resulting in dwindling home values?

3) Why does Georgia have one of the highest foreclosure rates in the country?

A representative from Atlanta Legal Aid, Metro Fair Housing, and Myself testified at the hearing. The room was packed to standing room only with struggling residents, frustrated lawyers, and housing justice organizers from Occupy Our Homes Atlanta.

The testimony given established a few troubling realities facing Atlanta's hardest hit communities.

1. The Georgia HomeSafe program is a total failure at best, and likely a failure by design. 2% of the $339 million allocated for struggling homeowners has actually been given to struggling homeowners. Do to the heavy restrictions on who qualifies and the long time period it takes to process applications the overwhelming majority of folks that apply get no help.

2. Foreclosed vacant homes in low income communities, especially communities of color, are left to blight and decay, while foreclosed vacant properties in high income communities are kept maintained and beautiful. Metro Fair Housing has done extensive canvassing in Atlanta and their findings suggest an industry standard of disregarding low income vacant homes, leaving them to the elements, while meticulously maintaining in wealthy, mostly white neighborhoods.

3. Georgia's laws, legal system, and social programs have failed to help and/or protect Georgians against predatory lending, felony fraud in foreclosure cases, and the allocation of funds designated to help those struggling with housing.

While it's never to late to ask the politicians  and institutions who have the power to change our broken system, it seemed clear to most in attendance that in order to create the change our communities are starving for we need to take a bold, new, creative direction. Many suggested marching on the Government institution in charge of the HomeSafe Georgia program, Department of Community Affairs, and demanding access to the $339 Million that has already been designated for Georgians that were hardest hit by the housing crisis.

Let's be clear, the $339 million that has been allocated for struggling homeowners in Georgia, if actually given to them, is at best a band-aid; it's not the decomodification; it's not making sure everyone has a place to call home. When things are as bad as they are right now and we've already been given a band-aid, we should not be blocked by bureaucratic and bad intentions from using the ban-aid.

The sad fact is that while HomeSafe Georgia has held back funds that where supposed to go to the hardest hit, many of those who applied for the funds have lost their homes for good.

Tim Franzen

Drama at the Fulton County Courthouse Steps

American Friends Service Committee,Occupy Our Homes Atlanta, struggling homeowners, renters, and community members showed up on the Fulton Country Court steps on Tuesday February 5th as the foreclosure auction was taking place to confront investors and expose a troubling new trend being tested in the Atlanta housing market. Our communities have suffered enough from Wall Street's greed.

The last time Wall Street devised a plan to make mountains of money off our homes it ended catastrophically. They’re back with a new plan and literally buying up our homes with millions of dollars at every foreclosure auction.

As the auction began we started playing a giant game of monopoly in front of the courthouse steps. Each game piece represented a private equity group that's been snatching up foreclosed properties in Atlanta(many of which are occupied). We also held a press conference where four home owners who have faced or are facing foreclosure told their story.
At on point an investor was so angry at our presence that he came down from the steps, stomped through our custom monopoly game and assaulted me.

The wave of foreclosures that has swept metro Atlanta for the last few years shows few signs of slowing down. This Tuesday just like the first Tuesday of every month, hundreds of homes will be auctioned off to the highest bidder on the Fulton County courthouse steps as part of the monthly foreclosure auction. The Blackstone Group along with a growing number of private equity firms, hedge funds, and other institutional investors with deep pockets will have representatives there lining up to purchase up these homes at a discount. Their plan is to convert these homes into rental properties, package and trade the leases on Wall Street, and eventually sell off the properties once home prices go up. This scheme will permanently fragment our communities after the same people destroyed them with subprime loans.

The need to provide a return to investors will cause the price of rent on these properties to go up, and potential dominance of local markets will leave very little competition to challenge those prices, further decreasing the availability of quality affordable housing that Atlanta is starving for.

Additional Media-
Blackstone youtube video:

Former APD Detective is Fighting for Her Life, as GMAC and US Bank Drag tTheir Feet

Jacqueline Barber is not only fighting to stop US Bank and GMAC from taking her home, she’s also fighting cancer and back on full chemo treatments. Thousands of people all over the country read about Jacqueline’s story last October and responded. Countless phone calls and emails were sent to GMAC and US Bank officials. Protests were organized in front of US bank branches. Thousands signed Jacqueline’s online petition.

When US Bank and GMAC finally responded, they said they wanted Jacqueline to make an offer on the house, which she quickly did, offering the same price US bank was willing to sell it for on the courthouse steps.

Jacqueline and some of her supporters were so motivated to end this long struggle that they flew to Minneapolis in December, and marched to US Bank’s headquarters to deliver their petition, which over 23k people signed, and pressure US Bank and GMAC to do the right thing.

GMAC and US Bank continue to drag their feet with a response. Meanwhile Jacqueline Barber is literally fighting for her life. Jacqueline has been advised by her doctor that stress will increase the risk of complications with her cancer. The stress of not knowing what is going to happen with her home has taken a serious toll on Jacqueline Barber’s health.

We are encouraging folks to call GMAC and US Bank and ask them to do the right thing, sell the house back at the price they purchased it on the courthouse steps.

US Bank Contact: Richard Davis, US Bank CEO: (612)482-0218
GMAC Contact: Susan Fitzpatrick, Communications Director 215-734-4400
                        Dana Dillard, GMAC Mortgage Senior VP: (214)874-2269

Tuesday, February 5, 2013

In the wake of one the greatest financial disasters in modern times, you'd think we'd have learned our lesson

Every day it seems a new report comes out praising the ongoing housing recovery. In Georgia, home prices are up 5 percent over last year, a year in which we also had one of the highest foreclosure rates in the country. Seems a little odd, doesn't it? That's because the "recovery," as they're calling it, is fueled almost entirely by Wall Street private equity, hedge funds, and the Fed's unwavering support. That's right. After creating a massive bubble in home prices that eventually burst and caused our economy to go into a tailspin, these guys have decided to come back for more, and figured out a way to profit off their destruction -- by turning foreclosed homes into rentals and securitizing the rental income.

Many are claiming this is as the recovery we need to get the economy going again -- the "private sector solution." The argument goes that investors snapping up these homes and fixing them up does more for the community than letting the houses just sit there, blighting the neighborhood and lowering values. Sure. That argument might have made sense for the pilot program Fannie Mae launched last year. In that bulk auction deal, investors had to agree not to sell the properties for a designated period of time. Many of the homes were occupied with tenants, and vacant homes had been on the market and not sold for at least six months. Of course, that deal proved too restrictive for most Wall Street types, leading the sale in Atlanta to eventually fall through.

The Blackstone Group, the biggest player in the new REO to rental market, has spent $2.5 billion in the last year purchasing 16,000 homes, a number that amounts to over $100 million per week. Property records show that many of the homes Blackstone has acquired in Fulton County over the last few months were purchased on the courthouse steps at the monthly foreclosure auction, or through short sales, when a lender agrees to accept less than the amount owed on a sale. The vast majority of these homes are not empty, but in fact occupied by homeowners who fell behind during the great recession. The sale often represents the last nail in the coffin of foreclosure in Georgia, a non-judicial foreclosure state where there is very little opportunity or time to make good once a homeowner falls into default. Blackstone, operating under their subsidiary, THR Georgia, buys the homes for cash, usually at deep discounts from the principal balance owed on the mortgage.

Take one of the homes they snapped up at the November auction as an example: THR purchased the Southeast Atlanta home at auction for $90,000. The principal due on the mortgage that was foreclosed upon was $219,300. If banks were willing to offer principal reduction on these inflated mortgages down to the same price they are willing to sell at auction, many homeowners would likely be able to afford their payments, and stay in their homes for years to come, contributing to the stability of the neighborhood. Instead, homeowners are getting a flier posted on their door the day after Blackstone purchases it, offering them the opportunity to rent the home they once owned. Meanwhile, the deep pockets of firms like Blackstone allows them to outbid virtually everyone else in the market- eliminating any chance of owner occupants looking for a new home, to get a good deal while prices and interest rates are low.
Blackstone has partnered with Dallas-based Riverstone Residential, the nation's largest third party property management company, to form "Invitation Homes." In a 3-minute commercial for Invitation Homes posted on the company's website, Jonathan Gray, head of global real estate at Blackstone, claims that "there are 12 million single family homes for rent in America, but it's not done on an institutional basis." The market has traditionally been dominated by 'mom and pop' investors, most with fewer than a couple dozen properties. Many landlords build relationships with their tenants, and the communities in which the homes are located. They hire local contractors to do maintenance work, and spend the income generated from rent back in the local economy. That's not how Riverstone operates. Their website touts the array of services they offer in-house for property owners, from contracts with telecom and utility providers, and exclusive partnerships with suppliers, to in-house screening and debt collection. Riverstone is a one-stop shop for property management.

Probably the most disturbing of all is the partnership between Riverstone and credit reporting agency, Experian. Riverstone entered into an agreement last year with Experian Rent, to turn over real time payment history on all of their residents to be compiled into a national database. A press release Experian put out when the deal was announced stated that "by furnishing resident rental payment history data to Experian RentBureau, Riverstone will immediately enhance the effectiveness of its rental collections while decreasing bad debt levels and encouraging proactive rental payment practices among its residents, leading directly to increases in net operating income (NOI) and the bottom line." This kind of data will help Blackstone and other large firms to eliminate some of the doubt and uncertainty around renters and their stability to investors. For the average renter however, the consequences could be detrimental. Gone are the days of calling up your landlord to let them know rent will be there on the 7th instead of the 1st this month. As more and more Americans live paycheck to paycheck, and wages continue to decline or remain stagnant, paying rent a few days late could lead to a negative credit score, impacting their ability to secure resources and move up the ladder of the middle class. Jonathan Gray wouldn't know much about that though. He made $36.5 million in 2011. His boss, Blackstone CEO Stephen Schwarzman, made $148.5 million. This new plan further grows the disconnect between Wall Street and Main Street, and the difference between the 1 percent and the 99 percent.

Interestingly enough, purchasing single family homes isn't Blackstone's only recent foray into the housing market. In the lead-up to the crash, Blackstone's hedge fund group, Blackstone Alternative Asset Management, chose to bet against the subprime market, purchasing credit default swaps and collecting billions in profits when the cards fell. Blackstone's hedge funds are now spending millions purchasing those very same subprime mortgage bonds for pennies on the dollar, betting on home prices going up, leading more homeowners to refinance and reinstating the value of these junk bonds. It's a constant game of speculation for Wall Street, which culminates in bubbles being created, the rich getting richer, and communities losing control over the places they live.

In the wake of one the greatest financial disasters in modern times, you'd think we'd have learned our lesson. Like they say, fool me once, shame on you. Fool me twice, shame on me. Maybe what we need this time around are solutions that help people find long-term housing stability, instead of chasing short-term fixes that will land us right back where we started.

Shabnam Bashiri
Guest Writer

Friday, February 1, 2013

Keeping Pittsburgh Beautiful

The Pittsburgh community is arguably one of the hardest hit communities from the economic crisis in the Atlanta metro area. The historic African American community very intentionally targeted for some of the cities worst predatory loans from the late 90's to 2008. The result; the community was essentially stripped of it's wealth and left half empty with one of the highest unemployment rates in the city.

Today about half of the homes in Pittsburgh are vacant, many of them are beyond repair. There a few remaining businesses and jobs are scarce. The empty lots in Pittsburgh have proven to tempting outsiders who are looking for a place to dump trash, tires, and other junk. These piles continue to lower the esteem and aesthetic of the community.

American Friends Service Committee has partnered with Occupy Our Homes Atlanta and residents of Pittsburgh to facilitate mutual aid clean up days and establish "no dumping" zones. This week we just finished up our fourth clean up project, and while this community has a long way to go, it's been gratifying to engage in an activity that has immediate results.

Our hope moving forward is to organize a block by block skills bank and begin to match community skills with community needs. In this fashion we hope build a stronger culture of mutual aid in Pittsburgh.