Patrick plans to aid subprime loan victims

Boston-Bay State Banner
July 19, 2007

In an effort to provide help for homeowners facing foreclosures in the ongoing subprime loan crisis, Gov. Deval Patrick unveiled last week a new $250 million home mortgage assistance program that would provide counseling as well as fixed rate financing.

Rather than using taxpayer money, Patrick said funding for the program will mostly come from Fannie Mae, the federally sponsored housing corporation that provides mortgage assistance to low- and middle-income homeowners. Fannie Mae will provide roughly $190 million, while MassHousing, the state’s affordable housing bank, will supply $60 million.

“For many Massachusetts homeowners, the subprime crisis has turned the American dream of homeownership into a nightmare,” Patrick said in a prepared statement. “Too many of our residents were put into loans they couldn’t afford. This innovative mortgage loan program will give some of our most vulnerable citizens a fighting chance to keep their homes.”

Subprime or “second chance” lending targets borrowers who cannot qualify for lower interest rates because of their credit history. These sorts of mortgages often begin with a low initial interest rate that resets after two years to a higher adjustable rate.

A recent report by the Center for Responsible Lending predicted that 1 in 5 subprime loans will end in foreclosure.

According to the Association of Community Organizations for Reform Now (ACORN), the nation’s housing crisis includes as many as 2.2 million homes at risk of foreclosure following a decade of subprime lending the group categorized as “reckless.” Last year, lenders filed 1.2 million foreclosures against homeowners behind on their mortgages — 300,000 more than the previous year.

This year, about 1.5 million foreclosure filings are expected.

In 2006, there were 15,887 foreclosures filed in Massachusetts, the 25th highest amount in the country. So far this year, Suffolk County has seen an increase in the number of homeowners who lenders have actually foreclosed.

A study by ACORN found that there have been 263 foreclosures during the first five months of 2007, compared to only 103 in 2006. These foreclosures have largely been concentrated in Dorchester and Roxbury.

State officials were careful to describe this new program as only one part of a multifaceted solution. Patrick’s new program is geared toward those with modest income burdened by unaffordable loans.

Borrowers are eligible if they are no more than 60 days behind on their mortgage payments and have a credit scores no lower than 560. Late mortgage payments must be a result of a resetting of homeowners’ interest rates, not their own actions, like refinancing.

Under the program, housing agencies are expected to negotiate on behalf of each homeowner who qualifies and press lenders to restructure their loan rather than pursue a foreclosure, a costly process for both lenders and borrowers.

Yet in spite of this new program’s benefits, it is unclear how many will actually qualify.

Mattapan resident Deborah Nicholas, 48, and her husband have used up nearly all their income and savings to pay their mortgage. But when they prepared to refinance their mortgage, they found that their lender had overestimated their income on paper and their broker had added additional charges to their loan. He had also appraised their home for more than its actual value.

“We will definitely go into foreclosure,” said Nicholas. “We cannot refinance and [the rate is] going to adjust. We have been doing it for the six months and we are paying all the time. I cannot continue working 80 hours a week.”

After learning of her inaccurate paperwork, Nicholas began working on ACORN’s predatory lending campaign. Though the organization has not been able to help her case, she has remained committed to helping others who have been victims of predatory lenders.

“[Lenders] take advantage of people who cannot read well, cannot speak well,” Nicholas said.

According to Chris Leonard, campaign director for ACORN’s Boston chapter, many borrowers encouraged by subprime lenders to refinance find themselves in situations like the one Nicholas faces.

“Governor Patrick seems to be proactive in taking on this problem of mortgage foreclosures, but a lot of people might not qualify for this [program] because they have refinanced,” said Leonard. “The lenders always push people to do this, even to where you see it written into mortgages and people wondering why they got a check for $10,000.”

While Massachusetts may be taking the lead on mortgage assistance, Leonard pointed out that it remains one of only a handful of states that does not require a court hearing prior to the finalization of a foreclosure. Nationally, ACORN is calling for the Federal Reserve to increase its regulation of mortgages.

“It’s wonderful to provide assistance to families that are in crisis, but we need to stem the tide through regulation,” explained Caroline Murray, director of the Anti-Displacement Project, based in Springfield, Mass. “We need to stop lenders that are engaging in these practices before they trap more families.”

Murray said that the city of Springfield has one of the highest rates of foreclosure in the state. Because of the city’s aging housing stock, predatory lending affects families looking to renovate older homes along with new homeowners.

“Out here, you will see lenders come into a neighborhood and go door-knocking for customers,” said Murray.

Steve Meacham, a tenant organizer with City Life/Vida Urbana, believes that new legislation needs to protect both homeowners and tenants. According to Meacham, up to 60 percent of recently foreclosed properties are not owner-occupied buildings, and he wants to see some protection put in place for tenants when an absentee landlord seeks to displace them because of foreclosure.

“What we need is a public program that assists nonprofits that want to buy buildings that have been foreclosed on, particularly affordable buildings where tenants are organizing to resist displacement,” said Meacham. “Then you can get a local community development corporation (CDC) with government money to buy the building at an affordable price, rather than having everyone get kicked out when the building gets auctioned off. People can stay in their homes and the CDC can turn it into an affordable building, limited equity condos or cooperative housing.”

Hub delegates learn, teach at Atlanta forum

Boston-Bay State Banner
July 5, 2007

ATLANTA — Nearly 100,000 youths and social activists from across the world, including about 100 Bostonians participating in the Northeast Freedom Rides, converged in Atlanta last week to participate in the 2007 United States Social Forum.

Stopping in Providence, R.I., and Washington, D.C., along the way, the Boston caravan brought three busloads of activists to the forum, many of them high school students.

Battling temperatures over 100 degrees, local youth made their presence felt with creative chants that highlighted issues of police brutality, gun violence and political oppression.

“There were thousands of different issues represented, but all of us [are] fighting,” said Carlos Moreno of the Roxbury Environmental Empowerment Program (REEP). “It was powerful to see how different we are but how we can still come together as one.”

As they marched through the streets of Atlanta, activists also drew attention to the proposed privatization of the city’s only public hospital as well as service cuts to the MARTA public transportation system. By marching past these locations, local organizers sought to point out local examples of structural adjustment, an economic program that forces governments to cut funding for basic services and allow private companies to buy public utilities. The original march route had also included a protest at City Hall against the planned destruction of public housing, but city officials had rejected this plan.

Following the march, the social forum began with an opening ceremony and concert at the Atlanta Civic Center. The five-day forum brought together over 10,000 people from across the country under the banner: “Another World is Possible, Another U.S. is Necessary.”

In addition to being a political event, the forum gave activists a place to socialize, learn about each other’s issues, refine organizing skills and coordinate broader campaigns. The Atlanta gathering drew its inspiration from the World Social Forum, an international assembly that has been convening since 2001.

Thousands attending the social forum took part in panel discussions, documentary screenings and cultural performances. Forum participants, including some Boston-area activists, also hosted hundreds of workshops on a range of issues, including climate change, immigration reform, male supremacy and anti-war activism.

Last Thursday, Dorotea Manuela of the Boston May Day Coalition helped to lead “The Great American Boycott, Immigrant Rights and May Day 2007.” Her workshop focused on the need for the U.S. and other Western countries to ratify the 2003 United Nations Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families.

She explained that the U.S. government has refused to see people who come to this country as migrants protected by international law. Instead, they are described as immigrants, denying them needed legal protection. She also helped circulate a petition calling for an immediate end to raids and deportations by the Department of Homeland Security.

The following afternoon, Cheryl Lawrence, a tenant organizer with City Life/Vida Urbana, also helped to lead a workshop titled “Best Practices in the Struggle for the Right to the City.” Sharing a panel with other housing rights activists from across the country, she described how the Jamaica Plain-based organization fights gentrification by forcing landlords to collectively bargain with tenant associations on rents.

Though Lawrence had originally turned down the opportunity to attend the social forum, she left Atlanta with a renewed commitment to fight for the rights of all people.

“When you really begin to see and understand how oppression hurts individuals and hurts communities, I just think that you can’t tolerate it for anyone,” she said. “Black people can’t tolerate the oppression that Latinos suffer around immigration, and Latinos can’t tolerate the oppression that black people face … The queer person’s issue is the straight person’s issue. Women’s issues are men’s issues. We have to demand that everybody has a place at the table.”

Moreno, of REEP, was surprised to hear that while youth activists in San Francisco organize around similar issues of youth violence, they are more willing to use confrontational tactics when demanding change from City Hall.

“While we have been working with city councilors to show that youth need $8 million for summer jobs, they work outside the system to pressure the mayor to get the youth what they need,” he said.

Moreno was happy to see so many young people at the forum, but Mission Hill resident Rafael Feliciano was disappointed by the turnout. Though teens and young adults definitely constituted a significant portion of those at the social forum, Feliciano expected to see a stronger youth presence.

“I did get to learn about a lot of youth groups that are doing amazing work,” said Feliciano. “But with any sort of political change, I always think of youth as being in the forefront, so I expected to see more [at the social forum].”

An informal meeting on Saturday morning between longtime activists and young organizers, however, impressed both Moreno and Feliciano. In a circle of several dozen teens, former Black Panther Party leader Kathleen Cleaver, Young Lords Party founder Jose “Cha-Cha” Jimenez, and American Indian Movement member Ward Churchill spoke candidly with those several generations younger about their experiences as activists during the 1960s and ’70s.

“It was interesting to hear how in the ’60s young people were doing community work because it needed to get done, when it wasn’t a nine-to-five job,” said Moreno. “It used to be that it was cool to help your people. That is what I want to bring back with me to Boston.”

For Feliciano, “meeting these people that I read about and watch on documentaries … was amazing.”

“It was so ridiculous to hear them speak personally and it will be something that I will never forget,” he said. “But the most amazing part was speaking to people who are doing the important work all across the country but don’t get any attention. Those people are so beautiful because of how much they care about the people of this country.

“Seeing so many people [doing] the work that I do tells me that I’m not alone,” he continued. “And if there is a real revolution that I don’t have to be that scared, that there are other people behind me in a huge group.”

It was these kinds of informal conversations that most Boston-area activists found particularly rewarding.

Following her encounter with tenant leaders from other parts of the country, Mattapan’s Alice Shroud found significant similarities, regardless of geography.

“The struggle we have with the landlords to stop these big rent increases is not just in Boston, Atlanta or New York City. It’s all over,” she said. “Everyone is fighting for the same social justice.”

Conditions in the South, the poorest region of the country, figured prominently in multiple workshops and panel discussions. Indeed, Atlanta was designated the host site of the social forum because of its historical connection to the civil rights movement and other progressive movements.

Moreover, the city’s Southern location also drew a strong contingent from the Gulf Coast. Rosalyn Johnson of Mattapan appreciated the opportunity to speak one-on-one with people from New Orleans. Noting the serious problems of gentrification and displacement caused by Hurricane Katrina, Johnson said that in Boston, “we take a lot of things for granted.”

“We need to do some serious movement in regards to housing,” she said.