Protesters took to a downtown Bank of America branch and Fannie Mae’s corporate offices in Chicago Tuesday to urge one of the nation’s largest home mortgage servicers and the largest home mortgage investor to change their lending and foreclosure policies. Progress Illinois was there for the action.
Protesters took to a downtown Bank of America branch and Fannie Mae’s corporate offices in Chicago Tuesday to urge one of the nation’s largest home mortgage servicers and the largest home mortgage investor to change their lending and foreclosure policies.
The financial institutions, protesters allege, are servicing predatory mortgage loans and pushing homeowners into foreclosure in order to make a profit.
“These banks that are too big to fail are causing havoc in our communities,” said Toussaint Losier, vice chairman of the Chicago Anti-Eviction Campaign (CAEC), who helped organize the event.
Chanting “Hey, Hey, BofA, how many homes did you steal today”, approximately 100 protesters from Detroit and Chicago marched from Bank of America, at 135 S. LaSalle St., to Fannie Mae's office at 1 S. Wacker Dr., where a small group of demonstrators demanded to speak with the mortgage company’s representatives.
Detroit protesters traveled to Chicago because Fannie Mae, which doesn’t make loans directly but instead buys mortgages and repossesses buildings from lenders, does not have regional offices in the Motor City. Several of the Detroiters are seeking loan modifications and attempted to ask the mortgage investor's representatives to review their foreclosure and eviction cases in an effort to stay in their homes.
“Fannie Mae just blinks and looks the other way as homeowners are being driven from their homes,” said Steve Babson, a volunteer organizer with the Detroit Eviction Defense, who traveled to Chicago with roughly 40 activists to “crack down” on banks that are “running roughshod over people.”
“The Fannie Mae and Freddie Mac policies are letting the banks practice unjust foreclosures and evictions, because they can profit off of foreclosures, which in turn are destabilizing our neighborhoods,” he said. “It’s the banks that trashed the economy. It’s not the fault of homeowners that the value of their homes went down."
Babson called Bank of America, Fannie Mae and Freddie Mac “partners in crime.”
He added that Detroit has seen at least 70,000 foreclosures since 2009, and more than half of those homes, roughly 45,000, are still vacant.
“Even when people qualify for loan modifications, they’re being thrown out of their homes because the bank can profit off of late fees and foreclosure fees,” he said.
Losier said CAEC and the Detroit Eviction Defense are calling on Fannie Mae, which he said has more stringent restrictions than many of the banks when it comes to foreclosure mediation policies, to work with families and approve more loan modifications and reductions to homeowners’ loan principals.
He also said the housing rights groups would like to see Fannie Mae donate vacant properties to charitable or non-profit organizations that, in turn, would restore the structures, keep families in their homes or rent the properties to low-income tenants, instead of selling the properties to high net-worth investors and corporations.
There were 177 vacant Fannie Mae or Freddie Mac-owned vacant properties in Chicago as of May 28, the Chicago Tribune reported in June.
Losier added that the situation is “particularly urgent in Chicago” because Fannie Mae and Freddie Mac, which own or guarantee half of the nation's mortgages and back almost 90 percent of new mortgages, have filed a federal lawsuit against the city’s Vacant Building Ordinance.
Seeking to hold the lending industry responsible for maintaining Chicago’s thousands of vacant properties due to foreclosure, the Vacant Building Ordinance, which took effect last year, requires mortgage holders to ensure a vacant house is secured, the yard is free of trash, the grass is cut and porches are structurally sound. Daily fines for a property in violation can be up to $1,000.
Under the ordinance, owners must pay a one-time vacant building registration fee of $500.
The Federal Housing Finance Agency (FHFA), which regulates Fannie Mae, Freddie Mac and the nation’s 12 Federal Home Loan Banks, filed the lawsuit against the city back in 2011, claiming the government-sponsored enterprises should be exempt from the ordinance because they carry their own, less expensive, property maintenance guidelines for vacant buildings.
“Chicago has one of the more respectable vacant properties ordinances in the country,” said Losier.
Also targeted by CAEC, Detroit Eviction Defense and other participants in Tuesday’s protest, including the Chicago Teachers Union (CTU), are Bank of America’s “toxic” interest-rate swap deals that are allegedly pushing cities across the Midwest, including Chicago, into debt.
“As CPS claims a so-called budget crisis, and a budget deficit, there are toxic swap deals with Bank of America that take millions of dollars from our schools, our communities and our families,” said Brandon Johnson, a CTU organizer that participated in the demonstration. “We say enough is enough.”
Here’s more from Johnson and Tuesday’s protest:
In an effort to keep cash flowing during the Great Recession, local government and taxpayer-backed organizations, such as the Chicago Public Schools (CPS) district, negotiated high-interest loans, which they are now locked into, when the economy tanked. If the interest rate, which is anywhere between 3 percent and 6 percent, goes up, banks cover the losses and return money back to the public organization by “swapping” a certain percentage back under interest-rate swap deals.
But after the economy crashed, the Federal Reserve lowered interest rates to less than half percent in an effort to bail out the failing institutions. The banks, however, didn’t drop their interest rates for the public organizations.
As CPS cites a $1 billion deficit, hands pink slips to thousands of teachers and educational personnel, and closes 50 schools across Chicago, 10 interest-rate swaps from Bank of America reportedly take $35 million from the district annually.
Interest-rate swap deals in Detroit are also reportedly taking $50 million from the city every year and, according to Crain’s Detroit Business, take priority over payments to retirees and investors as the city goes through bankruptcy.
“Bank of America has not only been blighting our neighborhoods, has not only been tearing up our communities, but Bank of America has been putting our city further into debt and our public school system further into debt,” said Losier. “They need to renegotiate these loans.”
Losier also alleged Bank of America pushes homeowners into foreclosure and denies them access to the assistance that would keep them from losing their homes. Allegations, he said, which are supported by a Massachusetts whistleblower lawsuit.
Six former Bank of America employees and one contractor filed sworn statements in June, alleging the bank lied to applicants of loan modifications, rejected applications on fraudulent grounds and incentivized bank employees to drive homeowners into foreclosure.
“These big banks are putting profits over people,” Losier said.
According to the Woodstock Institute, as of 2012, nearly one in 10 residential buildings in Cook County were vacant, and roughly 75 percent of mortgages in the county were owned by Fannie Mae, Freddie Mac, and Federal Home Loan Banks.
In 2011, the housing research and policy organization reports, 1,900 homes that were abandoned by their mortgage servicers cost the city of Chicago approximately $36 million in upkeep costs.
Meanwhile, Maria Calvillo said she was removed from her home by sheriffs at gunpoint when she was evicted in June.
“This is very painful, I’m very honest and I paid what I was supposed to pay, but now I’m living on the streets,” said the 55 year-old daycare owner who said she was paying $1,855 for her mortgage payment before she sought a loan modification with Indymac Mortgage Services three years ago
Calvillo alleges the lawyers she hired to help her navigate the loan modification process took $2,000 from her, told her to stop making mortgage payments and “then disappeared.”
Cavillo was denied a loan modification and her house was foreclosed upon in November. Fannie Mae, according to Calvillo, bought the property at auction in December.
“They said I didn’t send the papers they requested from me, but I did everything the lawyers told me to do,” said the Mexico-native who is now homeless and staying with friends and relatives. “I don’t understand how they can do this to me.”
Calvillo joined the group of protesters to demand an audience with Fannie Mae representatives Tuesday, with hopes that the mortgage investor would look into her case. But she was denied entrance.
She added that this was her fourth visit to Fannie Mae’s offices in downtown Chicago, but she has yet to meet with a banking representative.
“Nobody will be honest with me or help me,” she said. “It’s very painful to be living on the streets. They need to review my paperwork.”