City Pages: Occupy Minnesota fights the banks

Perhaps more "social justice" than civil rights & privacy, but we don't have a specific forum for that.

If you've read much of the local news, as I have, and interpreted each story in isolation, it's easy to get a picture of a bunch of nutball freeloaders occupying foreclosed buildings after their former owners have been given the boot. In the past, that's mostly what these stories have involved -- owners move out, squatters move in, squatters get arrested and/or evicted, life goes on.

The Occupy Minnesota has "occupied" foreclosed homes with a different purpose in mind -- not just saving individual homes for the owners but also working to effect changes in the system that drives foreclosures. Behind the scenes, they've actually accomplished a lot politically.

As former real estate brokers (mostly 20+ years ago), my wife & dealt with lenders in a number of foreclosure situations and generally found them hopelessly intransigent. Our interest then usually involved salvaging a seller's credit by arranging a short sale, but almost universally lenders prefer to lose more money later (usually lots more) than being flexible on the front end of a problem.

The article is worth a read from the beginning to the end. What they did definitely beats trying camp out on the plaza below the Hennepin County gov't center through a Minnesota winter.

City Pages: Occupy Minnesota fights the banks: Organization builds a tight-knit national community while preventing foreclosures

But Occupy Minnesota quickly found itself locked in a cumbersome fight with police over the right to set up tents in the plaza. By early November, activists saw the writing on the wall, and made a strategic shift to focus on embattled homeowners facing foreclosure. This would enable Occupy to help people with concrete needs, as well as provide a place to stay when the Minnesota winter arrived.​

"When you're on the plaza, it's a big tent and you're fighting for anything and everything, and fighting big systems that are embodied by these huge buildings all around you," explains Espinosa. "Zooming in to one individual really humanized it and touched people on a personal level."​

 

I couldn't agree more. I personally attempt to avoid all short-sales on homes mortgaged with Bank of America, as they are hopeless. The larger the bank, the dumber they are, but BOA is a big, fat, lazy welfare queen with a gift for working the corporate welfare system, but absolutely no interest in turning an honest buck on their mortgages. Their employees are lovely human beings, but none of them have the power to make a short-sale go through, and every single one of them has the power to foul it up. Since they're all human, short-sales inevitably become fouled up.

From my end, the biggest problem I see is that the bank doesn't realize that the slower they are to approve a short-sale, the harder they drive down the value of the home in question. Every month that passes is 10,000 dollars, right off the top. The second biggest problem is that the banks hire lazy, dishonest people to appraise homes. Many appraisers don't even get out of their cars when they appraise a short-sale. They don't look inside or in the back yards, they don't look at electrical panals, gutters, roofs, heating systems, etc. As a consequence they almost always appraise high. This makes the properties virtually unsellable, because the bank's price is hopelessly out of line with what the market will bear.

The third biggest problem is that the larger banks toy with borrowers who just need minor mortgage adjustments. In many cases the banks could save the mortgages by foregoing a payment or granting a slightly lower rate. They are so foolish to jerk these clients around for months, rather than simply compromising and saving the mortgage. By the time the desperate client has been tormented by the bank for a year or more, he relishes seeing the house lose value. I've seen former home owners who were absolutely jubilant to witness their former home sold for 40 percent of its previous value. They feel vindicated. If the bank had treated them decently then they would still be in their home, making improvements, making repairs and making payments.