OAKLAND, CA - Dozens of homeowners, activists, and leaders gathered at the Alameda County Superior Courthouse steps Thursday, calling on policymakers to act to halt foreclosures. They braved the wind and rain, chanting, “Foreclosure, three-closure, two-closure, none, we won’t stop until justice is done.” One woman carried a sign with an image of Dr. Martin Luther King, Jr. that read, “Don’t Foreclose on My Dream.”
Organizers said the protest was held ahead of the Martin Luther King, Jr. holiday, underscoring the significance of the American dream and homeownership rights.
“Dr. King spoke of economic justice and that includes not losing your home en mass,” Preeti Vissa, community reinvestment program manager at the Berkeley-based Greenlining Institute, which organized the event.
According to recent research from the Greenlining Institute, 2.5 million homeowners nationally, have lost their home since 2007. The group estimates that the number could balloon to 13 million in the next four years, if no legislation is passed.
Ethnic communities are bearing the brunt of the foreclosure crisis. Eight percent of blacks and 46 percent of Latino homeowners have been foreclosed on, according to a recent national study by researchers at Princeton University.
An underlying reason for the disparity is that ethnic communities were also disproportionately targeted for predatory loans and practices.
Karina Oricio, who was at Thursday’s rally, says Latinos with limited English skills were especially impacted and targeted. Homeowners like her parents.
Oricio says her parents refinanced their Redwood City home in 2006 and were promised their variable interest would not affect them. At the time, there was no one to translate for them. Their monthly payment dropped from $2100 to $1200, but eight months after that, it spiked to $5000 a month, she says. By July 2008, they could not keep up with the payments, and had already spent down their savings. Oricio says they asked their lender Countrywide (now owned by Bank of America) for a loan modification, but never heard back. Her parents eventually lost their home.
Vissa says the loss of a home is particularly devastating for minorities, because a greater percentage of their wealth is invested in their homes, compared to whites. According to research by Greenlining, Latinos invest 66 percent of their wealth into their homes, and African Americans invest 63 percent compared to about 38 percent for whites.
“If as a minority, you lose your home, you can see how quickly wealth can be drained,” she said.
Homeowners say they want to see legislation passed that halts foreclosures and helps struggling homeowners.
As a start, Assemblyman Mike Davis (D-Los Angeles) says California should ban balloon payments (large, up-front lump-sum payments required by some lenders) and pre-paid penalties (fees borrowers pay a lender when they repay a loan before its scheduled time of maturity). Texas and Vermont have already banned such practices.
Davis says he is disappointed that California hasn't passed such legislation already, considering the state has the fourth highest foreclosure rate in the country. Five California cities -- Modesto, Stockton, Merced, Riverside, and Vallejo – are among the 10 cities nationally with the highest number of foreclosures.
“This is not an attack on any one entity, but in the spirit of Martin Luther King, Jr., injustice anywhere is a threat to justice everywhere,” he said
Anger at the banks among the homeowners was also palpable. The event even included a mock auction of Goldman Sachs CEO Lloyd Blankfein’s condominium. Goldman Sachs received a total of $12.9 billion from the bailout. Despite receiving hundreds of billions of dollars in taxpayer money, homeowners have faulted banks for failing to modify a significant number of loans.
Fred Villasenor, executive director for Community Child Care Council of Santa Clara County, shared protestors’ frustration at the banks.
“The bank bailouts have been a sham,” he said. “Homes are being auctioned. They’d rather sell them to the vultures here next to me rather than lower the interest for families. The Obama Administration needs to change this.”
Thea Cushman, who lost her Antioch home in 2009, says banks need to do more to help struggling homeowners.
Cushman, 65, says she tried to modify her home loan for a year with Wells Fargo, but the bank denied her application without explanation. She says she eventually went to U.S. Modification Corp., a private company, that promised to help her. She paid them $4000, but received no help, and hasn’t been able to get any of the money back.
Cushman currently lives in an Oakland apartment with her son, a veteran who served during Operation Desert Storm and now suffers from severe anxiety. The mother and son will face uncertainty again soon. The apartment building has been foreclosed on and is up for auction this month.
“I don’t know where I will go,” she said. “This is just too nerve-wracking.”