Concerned Citizens Ask Sen. Hagan to Stand with Homeowners
Two words that will make almost any homeowner cringe: "eminent domain," the ability of a government to seize private property, usually land, for improvement of some kind. Though typically used for expanding roads and installing sidewalks in a neighborhood, one community in CA is using it to save homes.
Action NC members visited Sen. Hagan to urge her to support this game-changing move.
Karen Evans, staff assistant to Sen. Hagan, met with Action NC members on Tuesday, the 23rd, to discuss the foreclosure crisis and what the Senator can do to help. Kay Hagan sits on the Senate Committee on Banking, Housing & Urban Affairs and has promised that her goal is "...making sure our country's mortgage system is both robust and stable so that hard-working families are able to achieve the American dream of homeownership."
Cora Little, of Hoskins Mills Community, presented staffer Evans with a letter from Action NC, signed by over 50 other organizations representing tens of thousands of concerned citizens. This letter urges Sen. Hagan to be wary of banking regulation proposed by the industry that would cut local governments' ability to declare eminent domain.
So, why is the banking industry freaking out over eminent domain?
It turns out, if a lender or investor refuses to work with a homeowner, a government can step in and offer to help resolve the issue. If the investor still refuses to help the homeowner, the city can declare eminent domain and seize the property from the investor, giving it to a lender who will refinance or otherwise modify the loan and keep hardworking Americans in their homes.
The reason local governments can use eminent domain is because, as homeownership decreases, so does the tax base the city or town relies on to provide services. If enough people are evicted, a town could be forced into bankruptcy. Detroit, MI, once a booming industrial hub of the country, is now a hollowed out shell and has been forced into just such a position. The foreclosure crisis constitutes an "emergency situation" in many cities and can cripple local economies.
Terry Johnson, Action NC member from Salisbury, NC, spoke about her own struggles as her lender, Bank of America, forced her into bankruptcy. Now that the Republican-led NC General Assembly has cut federal unemployment insurance, Terry will lose the meager income that was sustaining her bankruptcy payments. Terry hopes that Sen. Hagan will do something for the estimated 20 million Americans who, like her, are stranded without hope of suitable employment.
Lowell Faison, another member of Action NC and Precinct Chair of Precinct 128, spoke eloquently about the havoc wrought by unchecked mortgage speculation on Wall St. The same people who crashed our economy are not only influencing regulation but are more powerful now, by an estimated 25%, than they were in 2008. He also presented Evans with a copy of the news story of Richmond, CA.
According to this report, "If banks reset Richmond’s underwater mortgages to fair market value, homeowners would save an average of over $1,000 per month on their payments. If those savings were spent on local goods and services, it would generate about $170 million in economic stimulus and create at least 2,500 jobs."
The way forward is clear. Mortgage resets, principal reduction and loan modification are the only means by which the American housing market can reverse the nose-dive it took in 2008. SIFMA, the Securities Industry and Financial Markets Association, has threatened the city of Richmond, whose city council voted 6-0 in favor of using eminent domain, with "redlining" which is to say, a slowing of investment and lending. The Mayor of Richmond would not be intimidated however.
"We’re not going to be intimidated by these Wall Street folks,” said McLaughlin, a former teacher who has been mayor since 2006. “It is pretty outrageous to hear them opposing this. They’re the ones who caused this crisis in the first place. And they don’t have a solution. The city has every right to do this.”
Karen Evans assured Action NC that this matter would be brought to Sen. Hagan's attention. Action NC members assured her, "We will be following Sen. Hagan closely on this issue."
Pictured (left to right): Dr. Robbie Akhere, ANC member Terry Johnson, Precinct 128 Chair Lowell Faison, staffer Karen Evans, ANC member Cora Little and Action NC organizer Jean Busby.