Since the real estate bubble burst, conditions for a national fight against foreclosures and evictions have seemed ideal. “Too big to fail” banks have refused to offer homeowners struggling with high mortgage payments any meaningful relief, despite receiving billions of dollars in public bailouts. More than one in five home mortgages in the country are “underwater” —with the mortgage greater than the market value of the home—resulting in about $700 billion in negative equity. Overall, more than 4 million homes were lost due to foreclosure between 2006 and 2011. In response, community organizations in cities throughout the country ramped up their work to keep families in their homes through local direct action.
Yet even though all of these elements were in place, no broad-scale movement to address the foreclosure crisis had captured the public spotlight.
That changed with the dramatic emergence of the Occupy movement this past fall. The movement provided an opportunity for a broader, coordinated approach to the foreclosure problem. Occupy set its sights firmly on abuses by the banking system and pointed to foreclosures as a main grievance. This winter, a national call to “Occupy Our Homes” and join in anti-foreclosure and anti-eviction efforts became a popular proposal for one of the movement’s next steps.
In recent months, Occupy Our Homes has given community groups that have organized around housing issues for years a chance to link with a unified, national effort and to share knowledge gained from local fights. The Occupy movement, in turn, has benefited from joining forces with anti-foreclosure and anti-eviction organizers. While Occupiers’ arguments about inequality and corporate greed may sometimes seem abstract, the foreclosure issue has allowed activists to make their complaints about the U.S. economy more concrete. It gives the Occupy movement an opportunity to stake out a specific realm in which change can take place.
Even more importantly, it makes clear the stake that ordinary Americans have in challenging the power of financial titans. By offering a chance for people to connect their personal troubles with larger social issues, Occupy Our Homes is creating an opening for the millions of Americans facing distress over their housing situations to join in collective action.
From Counseling to Advocacy
In Minneapolis, Jewish Community Action (JCA)—a social and economic justice group that works to build ties between Jewish and black communities—began in 2007 to focus on the flood of foreclosures. In areas including the city’s Northside neighborhood, JCA volunteers and local residents have gone door-to-door to identify at-risk homeowners and connect them with foreclosure and tenants’ rights counseling. Moreover, they have pushed banks both to renegotiate individual mortgages and to change their institutional practices in order to minimize foreclosures.
JCA is able to go beyond the steps that foreclosure counselors are willing to take. “What counselors won’t do is engage in advocacy,” says Vic Rosenthal, JCA’s executive director. “We are in a position to generate a hundred phone calls or a hundred emails to a bank executive saying, ‘This person is trying to stay in her home. We’re calling on you to do a modification.’ That’s made a difference sometimes. We’ve been able to get some postponements of sheriff’s sales and some loan modifications.”
Rosenthal believes that pressure created by the Occupy movement has given greater leverage to organizations such as JCA. “It has made groups like us look much more reasonable,” he says. “It’s provided more space for us to push a little harder. And the banks seem to be thinking differently about the demands that we’ve been making for years.”
Building a National Network
Other groups that have long been engaged in community organizing to fight foreclosures and evictions—including New York Communities for Change in New York City and the Alliance of Californians for Community Empowerment in Los Angeles—saw the burst of energy created by the Occupy movement as an occasion to link together. After a national conference call among organizers, the participants formed Occupy Our Homes, a loose-knit clearinghouse for information on local grassroots efforts. For a debut, they chose December 6 as a unified day of action. Activists in 25 cities joined in home occupations or solidarity marches on that date.
Since then, the network has maintained the OccupyOurHomes.org website and has worked to share strategies from different groups. The site includes powerful stories from individuals and families struggling to keep a roof over their heads. “These stories inspire people who might not otherwise have the knowledge that regular people can fight back against the banks and win,” says Matt Browner Hamlin, one of the central organizers of the effort.
One such story involved U.S. Marine Corps veteran Bobby Hull, of Minneapolis. Hull and his family had been in their home since 1968 and were considered pillars of their community. “As with many other people, he got sick and then got behind on his payments,” says Browner Hamlin. Hull did get together the money he owed, but at that point the bank would not negotiate with him. “When our national day of action rolled out on December 6, he decided to occupy his home and refuse to leave,” Hamlin says. “The community rallied around him.”
Hull and a local group called Neighborhoods Organizing for Change (NOC) held press conferences, circulated petitions, and made headlines with protests at Bank of America. Finally, in late February, the bank agreed to renegotiate his mortgage. Browner Hamlin explains, “A few weeks ago, Bobby was talking about how, even if he wins, he is not going to stop doing this organizing because it’s so important. I think it’s indicative of a pathway to victory: communities rallying together around homeowners and putting their feet down to say, ‘We are not going to have another eviction in our neighborhood. We’re not going to let that happen.’”
A Range of Tactics
In addition to telling stories of individual successes, OccupyOurHomes.org trains organizers via conference calls and provides resources to new participants looking to get involved. By providing a common hub for local struggles all over the country, it is able to share best practices from the anti-foreclosure and anti-eviction movement.
Local organizers operating under the umbrella of the Occupy movement have pursued a variety of tactics to address housing issues. In California, a collection of groups including Occupy Petaluma, Occupy Los Angeles, and Occupy Santa Cruz have advocated Foreclosure Prevention Zones (FPZs). Within these zones, activists organize, advocate for, and support those facing foreclosure and eviction. Homeowners in FPZs have held weekly vigils and conducted newspaper and radio interviews publicizing their plight. They have also pressured bank executives and local politicians to embrace the area’s FPZ, giving these officials an opportunity to publicize their commitment to stop evictions and to negotiate with underwater homeowners. Petaluma Mayor David Glass has called the FPZ effort in his town “a model of mutual respect and cooperation that has delivered mileage.”
Occupy Petaluma organizer Tim Nonn says that that Occupy and housing activists in California are also trying to give FPZs legal weight. They are fighting county-by-county to show that, owing to spotty paperwork, the lenders cannot prove they actually own the mortgages and, therefore, do not have the right to foreclose. “We’re going to ask county recorders to get an injunction against foreclosures,” Nonn explains. “We’re working with county recorders and district attorneys across the state. We feel like we could have a de facto moratorium [on foreclosures] in a few months.”
Miami-based Take Back the Land has embraced yet another approach. In addition to direct action to keep families in their homes, the South Florida activists—invoking the idea that housing is a human right—have reclaimed foreclosed and vacant properties and moved homeless families into them. “We’re liberating that land for human beings and for our communities to use,” says founder Max Rameau. He believes that foreclosed and abandoned properties should be put into community land trusts, which would be democratically controlled and would serve as a long-term source of affordable housing. Rameau cites populist land reform movements in South Africa and Brazil as inspirations for more radical occupations. With public housing being demolished in many parts of the United States, Take Back the Land’s message is resonating, and the organization is expanding to cities such as Rochester, N.Y., and Madison, Wis.
Connecting to Policy
Although it is an informal network with few resources and no official staff, Occupy Our Homes has been remarkably successful at forging local anti-foreclosure and anti-eviction efforts into a national movement. Ultimately, the foreclosure crisis demands not only direct action in individual cases, but broader policy solutions as well. Several proposals are on the table.
Economist Dean Baker, co-director of the Center for Economic and Policy Research in Washington, D.C., advocates a “Right to Rent” policy, through which underwater mortgages would be converted into leases. While banks would reclaim ownership of foreclosed homes, families could stay in their homes as renters, paying market-rate rent, for a substantial period of time—up to five years. Baker estimates those rents would be 40 to 80 percent lower than mortgage payments based on inflated housing prices.
In addition to keeping people in their homes, “Right to Rent” would keep neighborhoods from being blighted by vacant, boarded-up homes, and it would cost taxpayers nothing. Perhaps most important, since banks tend to avoid becoming landlords, it would give them significant incentive to renegotiate mortgages rather than foreclose.
“It’s a really great bargaining chip,” says Baker, “because it means that banks can’t just move through a foreclosure and have a house free and clear.”
It’s similar to the strategy used by City Life/Vida Urbana in Boston, which works to keep people in their homes by fighting evictions rather than foreclosures.
Organizer Steve Meacham says they’ve kept over 100 families in their homes by using this strategy. “It’s hard to take five people doing loan modifications and bring them together in one fight because their situations are so different…We engage people in making the same demand from their pre-foreclosure status right up through their eviction. That demand is, ‘I want my house back at its real value.’”
This demonstrates what is likely the best tool for keeping struggling homeowners in their homes: principal reduction to bring the amount of a mortgage loan down to the home’s current market value. Banks have been reluctant to implement principal reduction, because it means decreasing the value of an asset on their balance sheets and could cut into profits if it sets an example for people still paying on the full amount of their original mortgage loans. Yet some states’ attorneys general, including California’s Kamala Harris and Massachusetts’ Martha Coakley, are pressuring the banks—and mortgage assistance agencies Freddie Mac and Fannie Mae—to reduce the principal on underwater mortgages.
Some finance experts are beginning to favor this approach as well, since it minimizes long-term damage to the economy. In November 2011, Amherst Securities senior managing director Laurie Goodman told New York Times columnist Joe Nocera that “the extent to which a home is underwater is the single best indicator of whether the homeowner will default. The only way to change the imbalance between the size of the mortgage and the value of the home is to reduce principal.”
In late February, Congressional Progressive Caucus co-chairs Raúl Grijalva (D-Ariz.) and Keith Ellison (D-Minn.) called upon Edward DeMarco, acting director of the Federal Housing Finance Agency, to write down mortgage principal and provide partial “debt forgiveness” for Freddie Mac and Fannie Mae mortgage holders. Given that these two agencies own or guarantee more than half of the nation’s mortgages, such a policy would have far-reaching implications, if implemented.
Responding to those who say that it’s unrealistic to expect such action in Washington, Rep. Ellison contends that the boundaries of the possible could quickly shift with enough community pressure. “I can’t tell you how many times we’ve seen someone say, ‘Oh, it’s not realistic. It’s not going to happen,’” Ellison argues. “Then, somebody is able to muster a lot of community support, and all of a sudden people start getting reasonable.”
“We think legislation is an important part,” he adds, “but right now, we’ve got to create the political will that will drive that legislation. You can think of Congress as a sail attached to a mast, and the progressive movement as the wind. I don’t care how big your sail is and how shiny it is, the boat’s not going anywhere unless the wind is driving it.”