During the State of the Union address last Tuesday night, President Barack Obama announced that his administration would be launching a joint investigation into the abusive lending and packaging of risky mortgages that led to the housing crisis.
According to the White House, the goal of this investigation will be to hold banks that broke the law accountable and to help provide relief for homeowners struggling from the collapse of the housing market caused by this wrongdoing.
As a resident of Miami, one of the cities hardest hit by the foreclosure crisis, and a community activist on the frontlines fighting for racial and economic justice, for me the president’s announcement is a welcome development. Last month my organization, the Miami Workers Center, joined homeowners, workers, clergy and state legislators at events in Orlando and Miami to call for precisely such a federal investigation.
In the buildup to the housing crisis, the nation’s largest banks broke the law at every step of the mortgage process – from falsifying loan documents, to knowingly selling these fraudulent loans to investors, to illegally foreclosing on families. Yet, so far, not a single Wall Street executive has been prosecuted for these crimes. Meanwhile, millions of Floridians have been forced to pay the price for the banks’ actions in the form of their homes, their savings and their jobs.
It’s time to make sure that the nation’s largest banks are held responsible for their role in causing the housing collapse, including reducing the massive overhang of underwater mortgage debt left over from the crash. As the president said, “Responsible homeowners shouldn’t have to sit and wait for the housing market to hit bottom to get some relief.”
It is a promising sign of the growing momentum to fix the housing crisis that Republican candidates who had previously talked about letting the housing crisis run its course have instead come to Florida with a different message, this time calling for more action. It should be hard for anyone to campaign in Florida without a plan to reduce the more than $100 billion in underwater debt owed by nearly one-half of the state’s mortgage holders.
The same should be true with our state officials. But when it comes to housing it appears that Tallahassee is out of touch with the experiences of families in Miami and other parts of Florida. Just last week, homeowners and community leaders from FOCUS in Orlando and PICO United Florida testified at the House Civil Justice Subcommittee on HB 213 which would unfairly expedite the foreclosure process and diminish the due process rights of homeowners.
While more than 35 million people watched the State of the Union address, only 15 people watched this bill sail through this subcommittee with the potential for forcing more homeowners onto the streets by limiting their day in court.
HB 213 also provides additional tools for banks to rush through the foreclosure process, from weakening required documentation to rushing evictions by declaring homes “abandoned.”
As a grassroots community organization led by people directly impacted by Florida’s economic crisis, our goal at Miami Workers Center is to keep people in their homes.
Economists from across the political spectrum agree that the best way to stop the housing crisis is by forcing the banks to finally recognize the true value of the loans on their books and write down underwater principal for homeowners. It’s time for action, not just words.
Floridians need President Obama to follow through on his pledge to conduct a full investigation into the mortgage crisis. We need the presidential candidates to clarify what they are going to do to fix the crisis, not just refer to vague solutions. We need Florida Attorney General Pam Bondi to join her colleagues in other hard-hit states and launch a real investigation into the mortgage fraud responsible for the state’s housing collapse. And we need our state representatives to amend HB 213 to protect homeowners’ rights and allow a full and fair judicial process.
Everyday Floridians also have a job to do. We need our citizens and homeowners to stand up and make their voices heard so that special corporate interests do not dictate our public policy. Only then will we begin to see the housing market, our economy, and our communities make a lasting recovery.
Trenise Bryant is a community activist and board member of the Miami Workers Center. She may be reached at 305-759-8717.
Photo: Trenise Bryant