Grace Ross: How Banks are Destroying Our Property Values

Wednesday, June 13, 2012

Grace Ross, GoLocalWorcester MINDSETTER™

Grace Ross, GoLocalWorcester MINDSETTER™

I did not make it down to the most recent auction protest here in Worcester.

The Worcester Anti-Foreclosure Team has been doing outreach and gathering together our neighbors whose homes, money and health have been being swallowed by the banks. On the other hand, review of standard operating procedures show that there are systemic legal violations that the vast majority of the banks engage in.

These auction protests try to slow down or stop the process of having yet another piece of property auctioned by the banks; homes are usually bought back by the mortgage holder themselves –generally for an amount of money more than any private bidder would bid and well more than the properties are probably worth as the banks continue to try to hold onto unrealistic valuations on their books. At the same time, they are destroying our property values with these auctions that constitute essentially fire sales and then emptying the buildings. And the number of auctions is continuing to increase in our beautiful city.

I did not make it to the auction protest because I was reading through legal paperwork to track our attempts to get homeowners’ legal rights honored in our courts.

What I missed was our standard orderly boisterous protest. The homeowners having to once again remind the bank auctioneers and representatives that they do not own the property and that they do not have a right to step on it: that they are trespassing against the wishes of the homeowner. What I missed this time was apparently one of the Worcester Anti-Foreclosure Team’s leaders got shoved by an auctioneer who simply did not want to follow the law and wanted their way.

As standard bank practice, their representatives are supposed to not only auction the property but take advantage of a secondary form of foreclosure in Massachusetts called “entry” – where if they can peaceably and unopposed step on the property, then they can claim to own the property three years from now even if it turns out everything they did for the auction itself was illegal. Auctions we know are fraught with illegalities these days.

Folks were horrified and actually called the police to make sure the auctioneer did not try to escalate the physical force they had tried to exert for rights they do not even have.

I realized this should not be unexpected and we should expect more of this.

We got into this mess because the largest financial institutions growing at the time were mortgage companies. They had figured out how to get chartered and either lobby their way or legally pressure their way into not being covered by the same regulations that had regulated banks by law for decades. Therefore they could write a type of mortgage that when they finally got adjudicated in Massachusetts, became clear had been illegal all along.

Those subprime mortgages, as we know them, when they finally got in front of our Supreme Judicial Court, the judge pointed out that these mortgage contracts had never been legal by our standards. We actually require fairness in our lending practices. That means a mortgage that is signed for thirty years that the homeowners enters into in good faith, that banks should have also entered in good faith to carry out that contractual relationship for thirty years. Turned out all the criteria they had created to go along with these loans – which they conveniently didn’t properly inform homeowners of when people were at their mortgage closing – actually made it impossible for most people to honor them for more than a few years. There was an inherent dishonesty when mortgage companies knew they had made these mortgages unaffordable. That was the first piece of bullying.

And when they got told it was illegal, they still had to be taken to our Supreme Judicial Court a few more times.

Finally Massachusetts and other states had to make them so undesirable that now subprime mortgages are mostly not written any more. Our local community banks were never legally allowed to write these loans in the first place but they were not the big kids in the playground.

So stopped from that, the big lender CEOs still tried to collect on those mortgages and sold them off to banks that are regulated. Then when the biggest banks sank the world’s economy, they claimed they were too big to fail; they used all those ill-gotten gains to lobby and pressure their way into more money than you and I could ever conceive – trillions and trillions of dollars in loans and bailouts and promises based on the backs of the good faith and credit of the people of the United States.

Now we are finally beginning to get laws changed. When we get a good law changed that might protect, say, the financial well-being of a municipality, they sue back. Or they just continue to ignore their legal requirements like the ones they agreed to in the settlements with the Treasury last spring, April 13th of 2011. Or when supposedly forced to follow standard legal practices in the most recent settlement with the Attorneys General and other federal agencies, they just keep doing the same thing.

They supposedly committed to no longer signing legal documents and swearing to their veracity to use them in court. Well, I could give you dozens of those affidavits all signed since these legal settlements – still signed without personal knowledge and including all sorts of illegalities they never even bother to check on, let alone change their procedures.

Finally now in Worcester, as we have begun to win in Housing Court, we have had cases where they just broke into people’s houses and threw their stuff all in the dump because they did not want to have to evict people through court as they are legally required.

Or they changed somebody’s locks and conveniently “emptied out” their valuable possessions while the homeowner fought to get let back into the premises because they had never been legally evicted out of them.

So today is just another in the long string of bullying actions.

We finally learned our rights: that the bank’s representatives or auctioneers do not have the right to step on someone’s property because they would be trespassing. Now they are getting physical. And when they file their documents at the registry of deeds, they simply lie that they stepped on the property “unopposed and peaceably” even though we were there protested and they were told not to.

Don’t be surprised, of course. They figured out how to bully our entire economy and our neighbors with these illegal mortgages and then claiming they were too big to be allowed to fail, they bullied our federal elected representatives into bailing them out.

Somewhere in the midst of that they got exempted from a whole other set of laws: you and I could have our documents subpoenaed by an Attorney General considering suing us but apparently the biggest banks even got themselves exempted from the subpoena-powers of Attorneys Generals as well!

We are going to win this battle: so we are all covered by one set of rules for all of us.

But in the meantime there is still going to be a lot more of pushing us around; we just have to figure out together how to push back.