The Default News

Source: David Shankbone

Drawing inspiration from the Occupy Wall Street (OWS) movement, homeowners facing foreclosure are fighting back. Their weapon of choice: protest.

In La Puente, Calif., for instance, Rose Gudiel recently backed down OneWest Bank (formerly known as subprime lender IndyMac) and Fannie Mae (FNMR) after the companies refused to lower the mortgage payments on her family’s home and moved to foreclose. As part of the campaign, which drew support from OWS offshoot Occupy LA, Gudiel and hundreds of protesters rallied in front of the Los Angeles home of OneWest CEO Steven Mnuchin.

In Washington, a 71-year-old woman was joined by activists in moving to block loan servicer Ocwen Financial (OCN) from evicting her and her husband, along with their nine children and 50 foster kids, from their Seattle home. She has won a temporary reprieve.

Staying put

Grassroots organizations linking local residents, housing advocates and others are also springing up around the country to resist foreclosures. No One Leaves! of Springfield, Mass., uses tactics ranging from property blockades to legal proceedings in helping residents who have been foreclosed to stay in their homes. And earlier this month a network of groups called Right to the City Alliance mobilized anti-foreclosure protesters to march on Bank of America (BAC)’s Boston headquarters. A similar demonstration this month targeted Wells Fargo (WFC) in San Francisco.

In New York, where OWS protesters continue to camp out in Manhattan’s Zuccotti Park, Organizing for Occupation is also encouraging “non-violent direct action” to stop foreclosures. The group earlier this month hit on a novel way to temporarily halt the work of a Brooklyn foreclosure court — singing:

Theatrics? Of course, but not empty ones. Banks and loan servicers continue to resist modifying mortgages for struggling borrowers. And despite President Obama’s announcement of new debt-relief measures for homeowners, government efforts to slow the foreclosure tide have largely failed. The U.S. Treasury Department’s Home Affordable Modification Program and related federal anti-foreclosure initiatives have permanently reduced loan payments for a meager 0.1 percent of homeowners whose properties are worth less than their mortgages.

That’s no surprise considering that the feds have willfully let large financial institutions flout federal rules for programs like HAMP. With the government turning a blind eye to such abuses, banks and servicers have continued to falsify foreclosure documents despite a slew of federal and state investigations into these “robo-signing” incidents.

Another factor that may be driving the social resistance to foreclosures — growing public sympathy for OWS. A recent poll shows that nearly 60 percent of Americans back the protests.

Homes: A pressure point

Foreclosures are a natural hot-button for OWS, which is trying to refine its agenda. First, millions of people remain “underwater” on their mortgages. That represents a large constituency potentially receptive to public campaigns to stop home seizures.

Source: David Shankbone

Third, as the White House’s renewed emphasis on foreclosures makes clear, political leaders are loathe (especially in an election year) to dismiss the issue out of hand. So this is one area where public pressure can make a difference. And as the action of individual homeowners already shows, bankers fear the widespread antipathy that foreclosures provoke.

Fourth, housing debt is perhaps the greatest single obstacle to economic recovery because of how it inhibits consumer spending. As a result, among the best ways to boost the economy is to push lenders to forgive debt.

Finally, as financial pundit Mike Konczal notes, zeroing in on foreclosures allows OWS to make common cause with community, faith-based and other activist groups that have been working on behalf of homeowners since the financial crisis started. He writes:

It also allows Occupy Wall Street to tap into already existing networks of foreclosure fighters. It is a type of demand that is actionable without leaving the movement looking powerless by asking Congress to do anything –- these battles can be fought now. And it ultimately gets at the banks in a way occupations normally don’t –- banks may or may not feel that they aren’t appreciated enough by these protests, but they’ll definitely be mad if someone is disrupting their foreclosure mills through occupation and refusal to leave.

No doubt. Whatever the merits of the government’s latest foreclosure plan, it seems many homeowners are no longer content to wait for the feds or banks to cooperate.

Source: Alain Sherter, Business Journalist
Occupy Wall Street, Homeowners Ally to Fight Foreclosure

Many thanks to Jaril Tudio, from Bank of America, for providing the following information.

Last week the jobs report came in better than expected with 103,000 jobs created in September. Another surprise in the report was the significant upward revisions, which added 99,000 jobs to what was previously reported in prior months. For instance, last month the jobs report showed zero job creations and now that figure has been revised to show 57,000 jobs created. Once again, these aren’t great numbers—but they are better than originally thought, and they tell us that the economy is not in a recession.

When good or better than expected economic news hits the wires, like it did with Friday’s jobs report, investors often move their money out of bonds and into stocks in an attempt to take advantage of these gains. And that’s a big reason why we saw bonds and home loan rates worsen late last week, as evidenced in the chart below.

Chart: Fannie Mae 4.0% Mortgage Bond (Friday, October 7, 2011)

Below is the economic report calendar for this week, October 11 – 14, 2011.

Asian Real Estate Association of America (AREAA) started their inaugural conference with the Yin Yang, a symbol; polar opposites that complement forces interacting within a greater whole, as part of a dynamic system.

On the positive side, AREAA’s goal is to promote and sustain homeownership. On the negative side, that seems near impossible, especially with the lack of flowing capital. And in true Yin Yang fashion, AREAA advices people to make decisions not from emotions but from data. With that said, let’s review three general session topics.

First … capital
With lack of national capital, AREAA suggests working with international investors. Yet, because the process is buying process is foreign to them, it’s important to increase communication by teaching them how the U.S. Securitization process works.

Second … ethics and homeownership
AREAA suggested reviewing how people look at buying a home, primarily because consumers lack trust for lenders, servicers and brokers. To stress that point, one speaker mentioned Suze Orman’s comment on how consumers don’t have support …

It is obvious that the government cannot save them. It is obvious real estate, the stock market, and all those things are not going to save them…. The past few years have been a vivid example of, “if you don’t save yourself, nobody else will.” In terms of the government, it’s obvious that jobs have to be created.

At that point, you have the choice of foreclosure, deed in lieu of foreclosure, or a short sale. You should call up the financial institution that holds your mortgage, and if you really cannot afford the payments on this house, you should immediately put it up for a short sale. If a bank will not allow you to do a short sale, then foreclosure or deed in lieu of foreclosure are your options. If your banks still refuses to work with you on any level, then walk away.

Is it valid to say owning a home is just a business decision? If so, what are the ethical implications to the market? (We’ll have to analyze that question during another post.)

Third … owning a home is an aphrodisiac
Love that quote from Fannie Mae’s Dwight Robinson. He also correctly stated, Americans have one thing in common; we want to own a home. It’s a place for security, to raise a family, and to be connected to the community.

What I appreciated about AREAA’s morning session is that many speakers acknowledged consumers desire to seek the “American Dream” from people they trust, yet people don’t trust their Lender (who put them in the bad loan) which causes them to not trust their Servicer (who is trying to modify the loan).

CSR, managing the triple bottom line: financial, social & environmental

To help regain consumer trust I recommend all mortgage default companies (lenders, servicers, outsourcers, brokers, notary, property preservation, title, escrow, lawyers etc) embrace one to three elements of CSR.

CSR elements could include: cause marketing, supplier diversity, community outreach, CSR reporting, creating co-operative CSR efforts with suppliers by embracing social causes that could benefit consumers.

For example, they could create financial literacy programs, or donate a property for low-income housing, or create green and sustainable educational programs.

No doubt the picture isn’t perfect. The market place still doesn’t match up. Yet, what’s positive about this conference is that the leaders are finally embracing the consumers point of view. Plus, they’ve realized that when for-profits, non-profits, government sectors works together they share a desire to give consumers a hand up, to find ways to regain consumer trust, to not let the “American Dream” die. Amen.

Recently I hosted a webinar for The Force, a division of DS News.

The webinar featured the following four leaders within the mortgage default industry, and together we talked about Corporate Social Responsibility (CSR), and how their sector is embracing one element of CSR — community outreach.

CSR, managing the triple bottom line: financial, social & environmental

Synergistically each connects with one goal — to engage in community outreach.

2011-08-10 13.01 FORCE Webinar_ Community Outreach