Anti-Foreclosure Activists Put BlackRock in a Hard Place

Sarah Jaffe October 30, 2013

NYCC activists raise a flag, and some heck, outside the headquarters of investment firm BlackRock on October 30, 2013 in New York City. (Sarah Jaffe)

The pink gran­ite on the floor and walls of Black­Rock­’s New York City head­quar­ters at 52nd Street and Park Avenue pro­vid­ed excel­lent acoustics for the protest chants that echoed through it Wednes­day after­noon, as mem­bers of New York Com­mu­ni­ties for Change (NYCC) and the Home Defend­ers League took the invest­ment man­age­ment com­pa­ny to task for suing Rich­mond, Calif. after the city pledged to use emi­nent domain to save its res­i­dents from foreclosures.

A lot of these com­pa­nies try to hide under cov­er of dark­ness,” Skipp Rose­boro, one of the NYCC mem­bers at the action, told In These Times. We’re try­ing to call atten­tion to their actions.” 

NYCC mem­bers made up a good part of the 30 or so peo­ple who walked in a pick­et line through BlackRock’s lob­by, wav­ing NYCC flags and hold­ing signs that declared The big banks took our homes away through preda­to­ry lend­ing. Now, we’re tak­ing them back.”

Jean Sas­sine of Queens Vil­lage held a let­ter from the Home Defend­ers League to Black­Rock CEO Lau­rence Fink, whose $75.8 mil­lion salary makes him the high­est-paid finan­cial ser­vices CEO in the coun­try, and who admit­ted before a crowd at a pub­lic event ear­li­er this month that if some­thing was not done about wage com­pres­sion” and fore­clo­sures, we’re going to have a greater have’ and have-not’ society.” 

Mr. Fink knows that keep­ing neigh­bor­hoods togeth­er should be a pri­or­i­ty but has decid­ed to fight the city of Rich­mond,” Sas­sine declared in the lob­by of Black­Rock, his words echo­ing off the gran­ite and from the mouths of his col­leagues in the peo­ple’s mic” style of crowd rep­e­ti­tion. He has decid­ed to make Black­Rock a leader in doing the wrong thing.”

The protest was just one of sev­er­al actions tak­ing place across the coun­try on Wednes­day, coor­di­nat­ed by the Home Defend­ers League in sol­i­dar­i­ty with Rich­mond and its under­wa­ter home­own­ers. The city of Rich­mond has put forth a plan to seize 624 homes under its right of emi­nent domain — which requires the city to pay mar­ket val­ue for the homes. Because this mar­ket val­ue is less than the mort­gages on the homes, which banks have refused to write down, this action would allow the city to sell the homes back to the home­own­er at a low­er rate, there­by low­er­ing their mort­gage pay­ments and pre­vent­ing foreclosure. 

The approach has its crit­ics even among pro­gres­sives — polit­i­cal writer David Dayen has not­ed at the New Repub­lic and Salon that the pri­vate, for-prof­it firm pro­vid­ing cap­i­tal for the plan, Mort­gage Res­o­lu­tion Part­ners, is in the game to make mon­ey, and has an inter­est in help­ing the many home­own­ers who are under­wa­ter, but cur­rent, on their mort­gage pay­ments rather than the worst-off ones who are seri­ous­ly delin­quent. Even in Rich­mond, where they are tak­ing homes with both up-to-date and delin­quent pay­ments, they’ve been crit­i­cized for look­ing at quite expen­sive homes.

But the let­ter NYCC brought for Fink and Black­Rock, pro­vid­ed to In These Times by NYCC, notes that banks could avoid hav­ing the prop­er­ties seized if they would nego­ti­ate mutu­al­ly ben­e­fi­cial res­o­lu­tions” with home­own­ers and the com­mu­ni­ty by dis­cussing what a fair pur­chase price for the loans would be in a vol­un­tary sale. Emi­nent domain, in oth­er words, is the stick now being bran­dished by Rich­mond to get banks to come to the table and nego­ti­ate — since the car­rots of major fed­er­al bailouts did­n’t work. 

As Dayen has writ­ten, the banks and finan­cial enti­ties in ques­tion — Black­Rock, PIM­CO, and Wells Far­go among them — have dug in their heels and sued the city rather than accept the offered price. Fink argues that pre­vent­ing fore­clo­sures is not an appro­pri­ate pub­lic pur­pose for emi­nent domain. Instead, he sug­gests that cities use the priv­i­lege in ways that were for the bet­ter of the whole than the few,” as when L.A. tore down a neigh­bor­hood to build Dodger Sta­di­um in the 1950s. Con­ser­v­a­tives and the finance indus­try, Dayen notes, are ready to take this fight all the way to the top —pos­si­bly to the Supreme Court. 

Embat­tled home­own­ers like Sas­sine can’t hope to match the resources Black­Rock and the rest of the finance indus­try can bring to bear, so they’re hop­ing a bit of pub­lic sham­ing will help. Black­Rock is not a com­mer­cial bank. They don’t have store­fronts that reg­u­lar peo­ple vis­it,” he said, so it’s hard­er for every­day peo­ple to under­stand their role in the ongo­ing mort­gage cri­sis. Black­Rock does­n’t issue loans — instead, the com­pa­ny is an investor in finan­cial prod­ucts backed with Rich­mond mortgages. 

Sas­sine got involved with NYCC because his own Queens Vil­lage home is in fore­clo­sure. He works in the film indus­try, which means his employ­ment is often tem­po­rary to begin with, and mon­ey has been tight since the finan­cial cri­sis. We got into trou­ble when I got laid off at the same time as my wife need­ed surgery,” he told In These Times. We had to choose between pay­ing the mort­gage and health insurance.” 

He thought that JP Mor­gan Chase, who owned his mort­gage at the time, would be able to work with him so that he could keep pay­ing, so he applied for a mort­gage mod­i­fi­ca­tion. Over the next five years, he says, Chase gave him every rea­son in the book why his appli­ca­tion was­n’t accept­ed: Your sig­na­ture’s expired, you did­n’t sign on the cor­rect line, we need new tax returns, we need a new pay stub” — and his own health deteriorated. 

Some­where in there, his mort­gage was sold to Wells Far­go, some­thing he said he was­n’t noti­fied of until just recent­ly, when his mort­gage ser­vicer, a com­pa­ny called Ocwen, told him that Wells Far­go had turned down his mod­i­fi­ca­tion request. Wells Far­go also took the lead on the law­suit that Black­Rock and oth­ers joined against the city of Richmond.

Sas­sine thinks the law­suit is most­ly for intimidation’s sake. They want to scare cities out of being proac­tive [through] lit­i­ga­tion,” Sas­sine said. To show the giant com­pa­ny that they’re not scared, he and oth­er home­own­ers fac­ing fore­clo­sure ral­lied around the coun­try to bring Black­Rock­’s part in the cri­sis into the light. Rich­mond might be the first city tak­ing action, but the fore­clo­sure cri­sis con­tin­ues to affect peo­ple like him all over America.

The pro­test­ers were final­ly chased out of the build­ing after about 20 tense min­utes, with secu­ri­ty guards grow­ing increas­ing­ly more hos­tile, rais­ing their voic­es and threat­en­ing peo­ple with arrest, as they wait­ed for police to arrive. The guards flat­ly refused to ask a Black­Rock exec­u­tive to come accept the let­ter from Sas­sine on Fink’s behalf, say­ing He’s not going to come down with all these peo­ple here.”

Accord­ing to Zack Lern­er, an orga­niz­er with NYCC, one guard told the group that an exec­u­tive might have met with them if they’d only been one or two peo­ple, but not the whole crowd. Yet, Lern­er said, Black­Rock has refused to meet with indi­vid­ual home­own­ers to dis­cuss their under­wa­ter loans — so they brought a large group to make their point heard. 

To Mimi Pierre John­son, a Long Island res­i­dent who final­ly got a mort­gage mod­i­fi­ca­tion from JP Mor­gan Chase after sev­en years of fight­ing, pre­serv­ing com­mu­ni­ty is the entire point. The peo­ple are going to win!” she told the crowd after they exit­ed the lob­by. Ask Jamie Dimon!” 

That last, of course, refers to the record $13 bil­lion set­tle­ment that Dimon and Chase agreed to pay to the Jus­tice Depart­ment to set­tle inves­ti­ga­tions into the mort­gage-backed secu­ri­ties the com­pa­ny sold before the 2008 finan­cial crisis.

John­son told me that keep­ing peo­ple in their homes and pre­vent­ing fore­clo­sure ben­e­fits every­one involved. The banks get rid of tox­ic mort­gages, the home­own­ers get to stay and the city con­tin­ues to receive tax rev­enue instead of deal­ing with blight­ed, vacant, bank-owned homes. That’s plen­ty of com­mu­ni­ty ben­e­fit, she thinks, to jus­ti­fy using emi­nent domain if the banks won’t come to the table. “[Rich­mond’s plan] should be win-win for every­one,” she said.

Sarah Jaffe is a for­mer staff writer at In These Times and author of Nec­es­sary Trou­ble: Amer­i­cans in Revolt , which Robin D.G. Kel­ley called The most com­pelling social and polit­i­cal por­trait of our age.” You can fol­low her on Twit­ter @sarahljaffe.
Limited Time:

SUBSCRIBE TO IN THESE TIMES MAGAZINE FOR JUST $1 A MONTH