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Banks Get Bailed Out, People Get Thrown Out

Morrigan Phillips
Date Published: 
November 1, 2008

Early in the morning on September 22, before most people had left for work, an unusual scene was unfolding on a quiet street in the Mattapan neighborhood of Boston. Police, television news crews and dozens of people carrying colorful signs and banners, were gathering in front of a quiet home on Duke Street. Breaking the early morning calm, Steve Meacham, a tenant organizer with the Boston group City Life/Vida Urbana (CLVU), began leading a picket in the chant, “JP Morgan you’re no good, get out of our neighborhood.” The scene was an eviction blockade, the eleventh organized this year by CLVU. This time it was for Frances Louis and her family. Of the 11 blockades, nine have successfully stopped evictions after foreclosure. On this day, as at other eviction blockades, some people came prepared to be arrested in defense of Frances’s house by chaining themselves to the front steps.

Through the cracks in the window blinds Frances and her children stood looking out on the picket. Frances had kept her youngest son home from school. “I said, ‘This will be a learning experience for you. This is your homework.’” Frances’s children were worried about what having the blockade would mean, but she told them, “This is either going to help you in the long run or hurt you, and—guaranteed—this will help you. No matter what, you will remember that this movement was in front of your house.”

The day turned out to be a victory for the blockaders and a reprieve for Frances and her family—the constable said he would not be coming to their house after all.

The eviction blockades have played pivotal roles in influencing banks to negotiate with tenants living in foreclosed homes. The blockades have also effectively highlighted the effects these post-foreclosure evictions will have on Boston communities. By the end of the year the foreclosure rate in Boston is expected to be double and even triple that of last year. Given that many homes in Boston are double- and triple-occupancy buildings, displacement due to post-foreclosure evictions could encompass as many as 5,400 individuals and families. In the current political context of the financial crisis and its consequent federal bailout, the blockades have also created an opportunity for broader public discourse about who is truly at fault for the crisis and what real solutions are out there for homeowners.

Bank tenants The blockades are part of a campaign housed by City Life/Vida Urbana, called the Bank Tenant Association, to stop post-foreclosure evictions in the Boston area by making use of a toolbox of tactics including blockades and court solidarity. “The Bank Tenant Association is a group of tenants of little buildings and homes all over the city that are owned by the banks due to foreclosure,” said Steve Meacham. He noted that half the people who attend meetings are former homeowners, and half are tenants living in foreclosed buildings.

Steve is one of the key organizers working with bank tenants, connecting them with resources to help fight their evictions. “When the housing crisis hit, we understood that there was a whole other arena of response to the crisis that hadn’t been addressed,” he explained. “There were a lot of organizations doing home-buying counseling—there were a lot of organizations doing foreclosure counseling. But no one was doing anti-eviction work after foreclosure.” So far CLVU has been able to stop 95 percent of post-foreclosure evictions for people who join the Bank Tenant Association.

Since 1973, CLVU has been working in Boston neighborhoods helping residents to organize and protect their homes from displacement due to gentrification. Drawing from experience in labor organizing, CLVU makes use of tactics such as picket lines and collective bargaining. Collective bargaining by tenants associations has protected thousands from unfair and prohibitive rent increases. These experiences and CLVU’s connection to local labor unions have given the organization considerable support among workers and bolstered their campaigns. It has also meant that CLVU and Bank Tenants Association have a wealth of successful experiences to draw on in organizing to stop post-foreclosure evictions.

Joining forces in court, or “court solidarity,” is an early step CVLU and those in the Bank Tenant Association are using to stop evictions. “The goal is to get even half the people faced with eviction after foreclosure to say, ‘I’m not moving. I want to go to court.’ If they just said that much, the whole thing would grind to a halt,” Steve explained. “Jury trials take a lot of time and energy, and with hundreds of people making the demand, the banks would find the situation untenable.” At each Bank Tenant Association meeting volunteer lawyers explain the foreclosure process and options tenants can use in court to buy time before eviction.

Tenants also try to negotiate with banks by offering to pay rent or to buy their homes at the actual appraised value. “The banks are going to become the biggest landlords in Boston. They don’t want that,” Steve said. “It’s in their interest to sell these houses. Not being able to evict means they would sell thousands of properties at bargain basement prices to occupants or community development corporations. So we would transform a terrible, terrible situation into a golden opportunity.” Most tenants using the court system or bank negotiations usually avoid eviction, precluding the necessity of a blockade. But when those options fail and a bank moves forward aggressively with an eviction, tenants and organizers discuss holding a blockade.

Frances’s fightFrances’s fight to keep her home came to the blockade point after months of frustrating work trying to get the bank to negotiate. Frances is trying to purchase her home back from the bank at the appraised value. She made an offer of $200,000 on the house, and JP Morgan countered with a price of $244,000, still well below the outstanding loan balance of $350,000. The Neighborhood Assistance Corporation of America (NACA) has approved Frances for a loan, but with conditions. They want her to pay rent for a period of time so the family can rebuild its credit. Meanwhile Frances is being considered by another bank for a new, unconditional loan. But JP Morgan didn’t want to wait, and didn’t want to take the family’s rent.

Three years ago Frances’s mother, Yvonne Price, took out a mortgage for just over $400,000 to purchase the home, which the family had been renting for two years. Originally the mortgage payments weren’t much more than the rent had been. A year later, though, with interest rates on the rise, the monthly mortgage payment began to go up, increasing potentially to $4,000 a month. Facing mounting medical bills and mortgage rate increases that were outstripping their income, the family fell behind. The foreclosure notice first arrived in January 2008, and Frances and her mother started attending Bank Tenant Association meetings at CLVU within days of receiving the notice. “I saw a news clipping about City Life and thought they could help us out, so I started going to the meetings right away,” Frances said.

The mortgage on Frances’s home was an adjustable rate mortgage through EMC Mortgage, a subsidiary of Bear Stearns. At the time, Bear Stearns was one of the largest international investment banks in the world. But like other global financial giants, it began to fall as a result of the financial crisis brought about by the mortgage debacle. To prevent what many said would be a catastrophic market crash if Bear Stearns were to go bankrupt, JP Morgan Chase, with the aid of the Federal Reserve, acquired Bears Stearns for pennies on the dollar.

Since the collapse of Bear Stearns, the mortgage crisis has only worsened. Third-quarter foreclosures rose in 2008 by 70 percent over the same period in 2007. In a dramatic response to the crisis, the US Congress came to Wall Street’s aid with a $700 billion-plus bank bailout package. Meanwhile, little aid is making its way to homeowners who, like the banks, are struggling with the rise in interest rates. Unlike the banks, however, most homeowners are not responsible for the failure.

Way overpriced“People didn’t go out into Roxbury and buy more house than they could afford, which is often the charge. They went out and bought any old house. Some ramshackle triple decker—hardly a palace—was way overpriced, and they didn’t have any choice but to buy it because there was nothing that wasn’t overpriced,” Steve explained with a note of exasperation in his voice. “When they said to the bank, ‘I want to buy it, but I can’t afford it,’ the bank said, ‘Don’t worry, we’ll refinance you.’ But contrary to the banks’ expectations, values decreased rather than increased as interest rates rose. Suddenly people were living in homes valued at half the price they originally sold for—halving the banks’ assets and leaving homeowners to pay off a mortgage valued at twice the actual value of their homes.”

Frances, like many homeowners facing foreclosure and eviction, sees the bailout as rewarding the architects of the failure. “I think they are a bunch of greedy, selfish people. All those banks get bailed out. Doesn’t matter what they did, they get bailed out—and people get thrown out. They don’t care about the little people; they care about filling their pockets. It’s really unjust to put all these people in this predicament.”

On October 22, the very day NACA approved Frances for the conditional loan, she was served with another 48-hour eviction notice. With the aid of Soledad Lawrence, another tenant organizer at CLVU, she went to housing court to seek an emergency restraining order (the tactic had worked once before when the bank made its first move to evict the family). Meanwhile, a network of supporters was put on alert. If the judge failed to issue Frances the restraining order, they would converge on her home for another eviction blockade. The judge, however, granted Frances the restraining order until November 5, giving her the time she needs to shore up financing on her home.

“The movement’s growth and its success in gaining acceptance for anti-eviction work have been beyond our wildest dreams,” Steve said. “Eight months ago the idea of stopping evictions after foreclosure was nowhere.”For Frances and the seven other families on the eviction alert list, the future remains uncertain. More blockades are likely, and each week Bank Tenant Association meetings are growing in size. But Steve is optimistic and obviously full of energy when he says, “We think we can defeat the banks in the sense of getting them to abandon post-foreclosure evictions. It’s amazing to even think about this.”

At the very least, this movement has made the community stronger, empowered people who were left feeling hopeless, and raised up a model for other communities.

Morrigan Phillips is an activist and organizer, recently of Washington, DC, currently residing in the Jamaica Plain neighborhood of Boston, Massachusetts. In Boston she is working on HIV/AIDS issues and continues to coordinate organizing efforts with friends and cohorts all over the US. More information on eviction blockades: