DownWithTyranny!: California Attorney General Kamala Harris' Idea For A Homeowners Bill of Rights Is A Step In The Right Direction

This year, one of the most important initiatives for progressive legislators-- in Washington and in the states-- is to work on creating housing security by holding the Wall Street banksters, who the Obama Administration and DC's Conservative Consensus have largely let off the hook, accountable. The whole housing market, as crucial as it is for the economy and for a genuine recovery, is based on rigged gambling schemes and needlessly over-risky investments. A corrupt corporate culture-- largely embraced by a lazy and pitiful mass media-- of blaming the victim for criminal failures among the elites is no way to bring about either Hope or Change. The government must act-- urgently-- to help Americans keep their homes and to keep families off the street. Led by Congressional Progressive Caucus co-chairs Raul Grijalva and Keith Elison, progressives are gearing up to make this an issue that will have to be dealt with. Last week, for example, Jerry Nadler (D-NY) called out Edward DeMarco, the Acting Director of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, to write down principal amounts for struggling homeowners. Keep in mind that together Freddie Mac and Fannie Mae own or guarantee more than half of all mortgages in the country. And DeMarco has faced calls for his resignation for refusing principal reduction, sometimes called “debt forgiveness,” for Freddie and Fannie mortgage holders. Nadler:

The nation is still facing a tremendous obstacle to economic recovery: some 12 million Americans owe more money than their homes are worth. After so many homeowners have been taken advantage of and afforded little opportunity to extricate themselves from financial ruin, it is critical to provide the justice and relief that we can. Mr. DeMarco must do everything within his power to provide that justice. Write downs on mortgages will keep struggling Americans in their homes, provide relief for middle class families, and save taxpayer money through preventing foreclosures.

A growing number of Congressmembers and progressive candidates are speaking out along the same lines-- especially in states hardest hit by the mortgage meltdown... like California. Blue America-backed Dr. Lee Rogers, running against incumbent Republican Buck McKeon in California's 25th district is taking a hard line on helping homeowners. This is in distinct contrast to McKeon's mortgage dealings, taking bribes from Countrywide mortgage and then voting for TARP.

"Washington bailed out Wall Street, their campaign contributors, but they didn't do anything for Main Street, the taxpayers. The thought that bailing out the 'too big to fail' banks would result in palpable benefit to the average consumer was a fallacy. After the bailout, banks implemented tighter standards on credit, they came down hard on underwater homeowners, and they charged massive fees to people who couldn't afford them. We need federal policies that help taxpayers. The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, should be writing down principal amounts for struggling homeowners, and adjusting interest rates and duration to more favorable terms. These measures will actually save taxpayers money by preventing foreclosures and it keeps people in their homes.

"Another troubling event is what states are doing with their share of the $25 billion nationwide mortgage settlement agreement. Instead of helping struggling homeowners with their payments, some states are putting that money into the general fund using it for their deficits. Virginia received $479.6 million, but $69.7 million is going to help the state's budget shortfall. Missouri and Wisconsin governors have said they intend to use about 20% of their settlements to plug holes in their budgets. The diversion of these funds away from their intended use, homeowners who were taken advantage of by the countries 5 largest banks, is unacceptable. This is homeowner money and should be returned to homeowners."

On a state level, here in California we may not have anything positive we can expect from the governor's office but Attorney General Kamala Harris has been kicking up some dust about a Homeowners Bill of Rights that has more teeth than what we're hearing from most places. This is a letter, in part, she sent out to voters a few days ago:

This week, I stood with Assembly Speaker John Pérez and Senate President pro Tem Darrell Steinberg to introduce the California Homeowners Bill of Rights, which will bring fairness and transparency to mortgages in our state.

Today, I’m writing to ask your help with this work. Powerful special interests will oppose closing the mortgage loopholes that hurt homeowners. We need your help to get this bill to the governor's desk.

...We have all seen the results of a mortgage process that is stacked against the homeowner. From Stockton to Boyle Heights, from San Bernardino to Sacramento, our families and communities are suffering from a foreclosure crisis. We need a mass movement to make calls, write letters, and mobilize Californians on their behalf.

Last month, we extracted an $18 billion commitment from the banks for California. That was a life preserver for underwater homeowners. Now we must fundamentally reform our broken mortgage system.

Wednesday she announced six bills designed to protect homeowners and tenants against predatory lending practices and illegal foreclosures.

Her proposed legislation included one provision sure to be fiercely opposed by lenders-- a $25 fee paid by loan servicers every time a notice of default is recorded. The fee would be deposited into a fund to finance the prosecution of real estate fraud in California, Harris said.

On Tuesday, Harris also intensified her fight against Fannie Mae and Freddie Mac, the government-backed mortgage giants, over their foreclosure procedures.

In California the entities control more than 60 percent of the mortgage market and were not part of the $25 billion national settlement announced earlier this month.

While the big banks suspended foreclosures for a period after it emerged that officials had been filing irregular paperwork to evict homeowners, Fannie and Freddie have refused to suspend any foreclosures.

Harris called on them to halt foreclosures until they had undertaken a study into whether reducing the size of loans, rather than forcing homeowners in mortgage arrears to leave their properties, was a better course of action.