As Senate Democrats this week introduced a bill they say would help struggling homeowners refinance their mortgages, housing activists launched a campaign highlighting the reasons that such aid has so far proven ineffective. “Take Back the Peoples’ Bank,” spearheaded by the Right to the City Alliance, takes aim squarely at Fannie Mae and Freddie Mac, twhich have repeatedly refused to reduce the principal owed by underwater homeowners. Because the government-sponsored mortgage giants collectively control about half of all home loans, organizers have singled them out as a chief barrier to ending the foreclosure crisis.
Demonstrations are being held nationwide this week at the regional offices of Fannie and Freddie. Ninety-nine homeowners from across the country, calling themselves the “Fannie Freddie 99” are traveling to Chicago, Atlanta, LA and New York. The coalition of groups is calling on Fannie and Freddie to grant principal reduction on underwater mortgages and to allow foreclosed homeowners to remain in their properties, either as renters or by purchasing homes at their real value. The campaign also demands that Fannie and Freddie end the controversial practice of selling off large pools of vacant property to private firms at discounted rates.
At a protest in Chicago on Tuesday, activists from regional housing rights groups carried mops and brooms and called on Fannie and Freddie to “clean house” — for starters, by meeting with customers whose mortgages it backs. Families in foreclosure made it into the lobby of Freddie Mac, but regional director John Lucas, Jr. refused a request to meet with them. Instead, homeowners who had traveled from Detroit and Minneapolis gathered outside the building and told their stories.
Alejandra Cruz says that her family’s trouble started when PNC Bank, their mortgage servicer, failed to process an online payment correctly. When the Cruz family was unable to afford the two months of payment demanded as penalty, they fell into foreclosure, and Freddie Mac eventually bought their home in a sheriff’s sale. Alejandra and her brother David were last outside Freddie’s Chicago offices in June as they traveled with a caravan of supporters to PNC’s Pittsburgh headquarters in Pittsburgh to demand a meeting.
Now, after months of negotiations, Alejandra claims that Freddie Mac is all that is standing in the way of getting her home back. Occupy Homes MN, which has been working with the Cruz family, says that PNC Bank is willing to offer a loan modification, but is unable to due to Freddie’s policy against selling a foreclosed home back to its original owner.
“This is not only our problem, it’s an issue that is impacting families across the nation,” said Cruz. Fannie and Freddie have received more than $150 billion in taxpayer funding to remain solvent, and activists argue that as tax payer-owned entities they should be more willing to pursue policies that benefit homeowners. Instead, housing organizers charge, their practices are worse than those of private banks.
Lucinda Adams Vinje, another homeowner from Minnesota, says that she only learned that Freddie Mac had purchased her home when its name appeared on her eviction papers last month. Vinje first went into foreclosure in the spring of 2011, when she and her husband, a Vietnam veteran, were struggling to choose between “paying the mortgage or paying all the other bills that were piling up.” Though she says she was in the process of applying for a loan modification, her home was foreclosed on and sold in May. Vinje claims she was told that U.S. Bank, the mortgage servicer, had purchased the home from itself, and that trying to contact them “basically ate up” the three-month period in which she could have legally reclaimed the property.
“I’m here today because Freddie Mac hid behind U.S. Bank to steal my home,” Vinje told In These Times. “And now I want it back.”
According to Occupy Homes MN, the Vinjes today won a temporary restraining order that will halt Freddie Mac’s eviction action. But housing rights activists say that are continuing to build a “national movement to clean up the dirty policies of Fannie Mae and Freddie Mac.” A convergence in Washington, DC is planned for September 27.
Rebecca Burns is an In These Times contributing editor and award-winning investigative reporter. Her work has appeared in Bloomberg, the Chicago Reader, ProPublica, The Intercept, and USA Today. Follow her on Twitter @rejburns.