James Parks
By James Parks
AFL-CIO Senior Writer
In Atlanta—one of the areas hardest hit by foreclosures—residents who are about to lose their homes demanded last week that Big Banks like Wachovia/Wells Fargo reform their policies and protect homeowners on the brink of homelessness.
More than 200 people, including community groups, clergy and labor and government leaders, attended a hearing at an Atlanta church and listened to area residents about to lose their homes explain the Big Banks’ role in the foreclosure crisis. The hearing was sponsored by the Atlanta Fighting Foreclosure Coalition and the AFL-CIO.
In often moving testimony, several Atlanta residents told how they had worked hard to build a life for themselves and their families only to have their dream dashed by losing their homes to foreclosure.
One witness testified his bank told him he was so far behind on his mortgage that he would need to win the lottery to catch up. An Atlanta Legal Aid worker said all the biggest banks jumped in with both feet into the subprime mortgage business.
AFL-CIO Executive Vice President Arlene Holt Baker, one of a panel of leaders who heard the testimony, said:
Foreclosure is not an equal opportunity tragedy. People of color are disproportionately hurt in part because we’re also disproportionately likely to have lost our jobs. But an even uglier factor is that we have been targeted—chosen—for the dangerous lending practices by big banks almost guaranteed to result in disaster.
The hearing comes as the issue of rising foreclosures is being hotly debated across the country, focusing new attention on the role of the Big Banks. The number of U.S. bank foreclosures reached a record high in the second quarter of this year, according to the research firm RealtyTrac.
Last week, a coalition of seven New York City unions and community groups, joined by city Comptroller John Liu, told some of the biggest banks that received hundreds of billions in taxpayer bailouts that it’s time to help out homeowners facing foreclosure.
The city of Memphis and Shelby County, Tenn., filed a federal lawsuit last December against Wells Fargo, alleging “unlawful, irresponsible, unfair, deceptive and discriminatory” lending practices by the bank in Memphis and Shelby County violated the Fair Housing Act. Between 2000 and 2008, loans made by Wells Fargo in predominately black areas of Shelby County were eight times more likely to go into foreclosure than loans in white areas, even though Wells Fargo made nearly four times as many loans in mainly white communities, according to the complaint.
Therese Bowen told the Atlanta panel that after she was given two subprime loans, her first mortgage payment jumped from $800 a month to $1,200. Bowen is now facing eviction. Here’s Bowen:
Wells Fargo bought my house at foreclosure for $34,000, yet they would not allow me to stay in the home and get a loan modification, even though I have a good income and I could afford to catch up on the missed payments if they would let me. Instead they are evicting me from my home, and it will likely sit empty for two years and be one more boarded up house in the neighborhood.
Seniors also are vulnerable to unscrupulous lenders, said Barbara Easterling, president of the Alliance for Retired Americans and a panel member. One-third of people facing foreclosure are seniors, she said.
Many retirees dedicated their whole lives to one company. There was a promise made that if you worked hard, you would have a retirement you could count on. But that promise got broken. Too many companies gambled away their pensions and savings. Our government just stood idly by, like the lookout man at a bank robbery.
One such senior is Gloria Sims, a 74-year-old retiree. She testified that a Big Bank gave her and her husband an adjustable rate mortgage they cannot repay on their fixed retirement income.
But Easterling said seniors do not care only about themselves.
We worry about our children and grandchildren in these difficult times. We want them to be able to find a good job and a place to live, be able to start a family, and have a safe and secure retirement when their working days are done.
Immediately after the hearing, participants headed to the Wachovia/Wells Fargo downtown Atlanta branch to demand that the bank modify home loans, inform tenants in foreclosed homes of their rights and expand access to affordable loans to communities in need.
With much of the Atlanta media covering the action, four of the panelists—Holt Baker, Atlanta-North Georgia AFL-CIO President Charlie Flemming, Georgia State Sen. Vincent Fort and the Rev. Timothy McDonald—met with bank officials to discuss the foreclosure crisis.
As of May 2010, some 182,067 mortgages issued by Wells Fargo alone were eligible for the federal Home Affordable Modification Program but the bank had only permanently modified 40,579 mortgages. Wachovia has an additional estimated 31,084 eligible mortgages but had only permanently modified 1,211 or 4 percent. Wells Fargo and Wachovia merged on December 31, 2008.
The participants called on Wachovia/Wells Fargo to:
- Improve participation in the federal Home Affordable Modification Program (HAMP) program to achieve a 100 percent loan modification goal.
- Reduce principal balances, reduce interest rates and make home loans affordable.
- Protect tenants in foreclosed homes.
- Stop high-interest short-term lending. Although not available in Georgia, Wells Fargo’s Direct Deposit Advance program charges fees equivalent to about a 120 percent annual percentage rate.
- Expand low-interest lending to meet the crucial need for affordable and accessible credit in poor and minority communities.
The other panelist at the hearing was John Eaves, chairman of the Fulton County (Ga.) Board of Commissioners.
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Re-Posted from the AFL-CIO Now Blog
Posted July 24, 2010 at 8:00 am, in From AFL-CIO
