Report: Program aids Wall Street, hurts communities
New York [September 9, 2014]— Today, in coordinated actions in more than 10 cities including Los Angeles, San Francisco, Boston and Chicago, community organizations and struggling homeowners rallied at local offices of the U.S. Department of Housing and Urban Development (HUD) to call for a halt to a controversial program, that auctions off delinquent loans to investors until problems with the program are fixed.
The community groups released a new report, Vulture Capital Hits Home: How HUD is Helping Wall Street and Hurting Our Communities that details how the HUD Distressed Asset Stabilization Program (DASP), created in 2012, is auctioning pools of delinquent loans to the highest bidders. The groups say these sales are detrimental to neighborhood stabilization goals such as homeownership preservation and affordable housing. The report was researched and authored by the Center for Popular Democracy and the Right To The City Alliance.Read more
American Homeowners Skeptical and Hopeful Following Announcement of Bank of America Mortgage Settlement
Record $17 billion agreement to include relief for consumers, while help from previous settlements slow to arrive
Washington [August 21, 2014]— The U.S. Department of Justice (DOJ) and Bank of America have reached an agreement, the two parties announced today. The settlement, which includes nearly $17 billion in fines and damages, is the largest-ever resolution between the federal government and a company. The agreement comes after months of negotiations between the bank and the DOJ over the wrongdoing that led to the mortgage crisis.
Homeowners and advocates throughout the country are expressing skepticism, mixed with hope, that the billions of dollars of relief for homeowners included in the settlement will reach the families who desperately need it. The settlement agreed upon calls for about $7 billion in such relief.Read more
Homeowner assistance from $13 billion deal yet to materialize substantially, groups seek answers from Justice Department
Washington [July 28, 2014]— A group of community organizations from throughout the country submitted a Freedom of Information Act request this week to the U.S. Department of Justice (DOJ), seeking specific answers to questions related to the November 2013 DOJ settlement agreement with JPMorgan Chase. The request for information comes at a time when the department has recently announced a similar settlement with Citigroup and is reportedly in ongoing negotiations with Bank of America.
The FOIA request asks the DOJ to provide detailed information on how the settlement is actually being implemented; along with the demographics of who is getting relief from the settlement and correspondence between the department and the appointed monitor, Joseph A. Smith, assigned to oversee the implementation of the settlement.Read more
As news breaks of another settlement between the Department of Justice (DOJ) and a major U.S. bank, Citigroup, homeowners throughout the country are asking whether promised relief will arrive.
Many homeowners are concerned and skeptical this morning. More than six months after the DOJ settled with JPMorgan Chase, help has yet to come. Last week, struggling homeowners in 14 cities delivered a letter to Attorney General Eric Holder, asking for his personal intervention on behalf of consumers.
"I never thought in a million years that I would be in this position of fighting Citibank to save my home of 18 years,” said Houston, Texas homeowner Robin Crawford. “We all used our taxpayer dollars to bailout the very same banks not willing to help stop foreclosures. Wall Street bankers should be criminally charged for taking the very homes that we worked so hard to keep."
The $7 billion Citigroup settlement includes a $4 billion civic penalty and $2.5 billion in debt relief to homeowners.
“During the past year since the $13 million JPMorgan Chase settlement was announced, struggling homeowners and community advocates representing them have been waiting for the help that was promised,” the letter to Holder states. “It has yet to arrive and the bank has not announced any new relief programs. Nor have their been any new modifications. Instead, Chase and their competitors are often transferring servicing rights to newer mortgage companies not covered by recent or future settlements.Read more
In actions planned in 14 cities, struggling homeowners and advocates will deliver letters asking for help promised in settlements
Nationwide [July 8, 2014]— As the U.S. Department of Justice reportedly continues negotiations with Bank of America, CitiBank and other major banks regarding possible record-breaking settlements, struggling homeowners in 14 cities are heading to U.S. Attorney’s offices, delivering a letter to Attorney General Eric Holder. The letter requests that Holder personally intervene to ensure that the terms of previous mortgage settlements are fully implemented and that future settlements provide greater relief to the consumers harmed by the foreclosure crisis in the first place.
“During the past year since the $13 billion JPMorgan Chase settlement was announced, struggling homeowners have waited for relief,” the letter to Holder states. “However, relief from the Chase Settlement has yet to arrive. The bank has not announced any new relief programs. Nor has there been a noticeable increase in new modifications. Instead, Chase and their competitors are often transferring servicing rights to newer mortgage companies not covered by recent or future settlements.”Read more
Struggling Homeowners Skeptical of Justice Department, Bank of America Deal
Relief from $13 billion JPMorgan Chase Settlement yet to materialize
Washington [June 16, 2014]— As recent news reports indicate that the U.S. Department of Justice (DOJ) is negotiating a potentially record-breaking settlement with Bank of America over the wrongdoing that led to the mortgage crisis, homeowners and advocates expressed skepticism that the billions of dollars of relief for homeowners reportedly included in the settlement will reach the families who need it.
“$17 billion is a lot of money. I wonder if there will really be any help for my family and families like mine, or will it be just another set of broken promises?” said Grace Alexander, a Newark, New Jersey homeowner with a mortgage from Bank of America.
Organizations representing struggling and “underwater” homeowners say that help from last year’s record $13 billion settlement with JPMorgan Chase has yet to arrive. While the bank has not announced any new relief programs, its website does offer information about the most recent settlement.
And housing counselors and homeowners have not noticed any new waive of modifications. Rather, they say, Chase and other major banks seem to be seeking to get such loans off their hands by transferring servicing rights to newer mortgage companies not covered by major mortgage settlements.
"Even with the landmark settlement, I have not received any principal reduction on my mortgage,” said Pina Orsillo Belgrano, a realtor and entrepreneur from Seattle, Washington. “JPMorgan Chase intentionally misled me, and the modifications they offered me never included principal reduction and only reduced my monthly payments by $40." Belgrano says she has struggled for years to get Chase to agree to a sustainable modification. Organizers from Washington Community Action Network and the national organization Home Defenders League forwarded her case along with other examples of the kind of borrower needing relief to officials at the U.S. Department of Housing and Urban Development (HUD) and DOJ, but her loan was instead sold from Chase to a new servicer.
“On paper, the Chase settlement had better consumer relief than the earlier National Mortgage Settlement, in that it requires the kinds of modifications that restore home equity and keep families in their homes, mostly principal reduction,” said Kevin Whelan, National Campaign Director of the Home Defenders League. The earlier settlement between the federal government, 49 state Attorneys General and five major banks allowed the banks to provide most of their relief in ways that still put families out of their homes—like short sales—or through business practices they would have engaged in anyway, like writing off second mortgages that are worthless if a first mortgage goes bad.
“There was public debate on whether the JPMorgan Chase settlement was too big or two small and anger over the fact that it was tax deducible,” Whelan said. “But now folks are wondering if it was simply a work of fiction.”
Years into the foreclosure crisis, many homeowners who suffered now well-documented abuses at the hands of major banks have lost their homes to foreclosure. The JPMorgan Chase settlement contained provisions that allowed the bank to get credit toward its settlement amount by helping such families through donating or selling properties at a discount and financing new mortgages for homeowners who had lost their homes.
Sergio Ceballos Aguilar hoped that such provisions would help him reclaim his home. A longtime Minneapolis resident, Ceballos says he was sold a predatory loan by JPMorgan Chase, a loan he attempted to have modified five times. He was foreclosed upon and evicted from his home while attempting to negotiate a modification—a practice, restricted under the National Mortgage Settlement and now illegal in Minnesota, called “dual-tracking.” Public pressure including dramatic protests by the group Occupy Homes Minnesota and support from his City Councilmember raised Sergio's case into the national spotlight around the time of the JPMorgan Chase settlement. In the midst of significant media exposure, bank officials began actively negotiating with Sergio—only to stop drop contact and stop responding before working out an agreement.
"I want to be able to support my children with stable housing on the street they grew up on,” Ceballos said. “All we ask for is a fair negotiation, to sell my home back to me so that I can continue to pay for my home. It is terrible that JPMorgan is pulling the same trick on our country that it is pulling on me! First they negotiate, then they retreat before sealing the deal.”
Last week, the California Reinvestment Coalition (CRC) publicly urged the DOJ to require Bank of America to disclose who is helped under the consumer relief provisions of a potential agreement with the bank and who is not. The CRC called on the DOJ to require Bank of America to publicly disclose homeowner race, ethnicity, and census tract level data for people who seek assistance under the reported $5 billion in homeowner relief that may be included in the settlement.
The Home Defenders League is a national organization fighting against foreclosures and for a just resolution to the mortgage crisis including mass principal reduction for underwater homeowners.
FOR IMMEDIATE RELEASE: May 8, 2014
Saqib Bhatti, Nathan Cummings Foundation (312) 860-9917; email@example.com
TJ Helmstetter, Center for Popular Democracy (973) 464-9224; firstname.lastname@example.org
Download report: http://diversity.berkeley.edu/underwater-america-report
NEW REPORT: Housing Crisis Far From Over; Study Ranks Top 100 Cities Hardest Hit
Authors Recommend Principal Reduction Strategies Including Reverse Eminent Domain
(NATIONWIDE) — A new report shows that the problem of widespread “underwater mortgages homeowners stuck in loans for more than their home is worth--persists in many communities across the country.
The report “Underwater America: How the So-Called Housing ‘Recovery’ is Bypassing Many Communities” published on Thursday, May 8th, by UC Berkeley’s Haas Institute for a Fair and Inclusive Society identifies the nation’s most troubled hot spots: the cities, metro areas and communities where the highest proportion of homeowners still have negative equity, or are “underwater.” The report’s authors argue that market forces alone will not bring the recovery to these severely impacted communities, and call for local or federal intervention to reduce mortgage principal.
In the first report of its kind, the authors analyze negative equity and foreclosure data together with race and income data, at a zip code level, as well as city and metropolitan area. The report uncovers the depth of the housing problem that persists in these hard hit communities, as well as how the legacy of predatory lending has meant a disproportionate negative impact on African American and Latino communities. One in ten Americans lives in the 100 hardest hit cities where the number of underwater homeowners range from 22% to 56%, the report says.
"'America Underwater' demonstrates that neighborhoods in all regions of the country – from Milwaukee to Memphis, Atlanta to Las Vegas, and beyond – are continuing to suffer with more than one fifth of homes currently underwater in the 15 hardest hit metropolitan areas with populations over one million," said Professor Gregory Squires, one of the five authors of the report and the chair of the Department of Sociology at The George Washington University. "The failure of a wide array of federal programs to stem this tide has caused many desperate local communities to consider bold action, including the use of eminent domain, to purchase these loans at current market value and refinance them to help millions of at-risk families to save their homes. These local laboratories of democracy may well signal a nationwide social movement that will put the financial crisis behind us.”
Industry data show that many American homeowners are still severely underwater and at risk of losing their homes. Despite home prices rising in many parts of the country, the total value of owner-occupied housing still remains $3.2 trillion below 2006 levels. At the end of 2013 more than 9.8 million American households, representing 19.4% of all mortgaged homes, were still underwater on their mortgages. Underwater homeowners are significantly more likely to default on their mortgages than homeowners with positive equity.
This report identifies where these homeowners are concentrated and which zip codes (identifying 395 zip codes in 23 states), cities and metropolitan areas are hardest hit.
The Ten Hardest-Hit Major Cities
|City||Percent of Homes Underwater||
|Miami Gardens, FL||43%||726|
|North Las Vegas, NV||43%||2648|
The 15 Hardest-Hit Major Metropolitan Areas
|Metropolitan Area||Percent of Homes Underwater|
|Las Vegas, NV||35%|
|Virginia Beach, VA-NC||25%|
|Kansas City, MO-KS||24%|
|St. Louis, MO-IL||24%|
RECOMMENDATIONS FROM THE REPORT
1. Loan holders—banks, government sponsored enterprises (i.e., Fannie Mae and Freddie Mac, which are regulated by the Federal Housing Finance Agency, FHFA), and investors—should reduce the principal on underwater mortgages to current market values.
2. If loan holders are unwilling or unable to reduce the principal on underwater mortgages to current market values, they should allow these loans to be purchased by publicly-owned or nonprofit entities that are willing to restructure them with fair and affordable terms.
3. Local municipalities should use all options at their disposal to facilitate the goal of resetting mortgages to current market values, including the use of “reverse eminent domain” (the program proposed in Richmond, California and elsewhere) to acquire mortgages in order to restructure them with fair and affordable terms.
4. Banks, government sponsored enterprises like Fannie Mae and Freddie Mac, and investors that own vacant homes that have already been foreclosed upon should sell them to publicly- owned or nonprofit entities that can convert them to affordable housing units for residents of the community instead of selling them to speculators.
5. Local municipalities should use all options at their disposal to facilitate the goal of turning vacant, foreclosed homes into affordable housing. This includes the use of “reverse eminent domain” to acquire properties in order to convert them to af- fordable housing units for residents of the community and to prevent them from being purchased by speculators.
United States Representative Mark Takano of California commented on the report in a statement:
“I applaud the Haas Institute for Fair and Inclusive Society for looking at the communities like mine that are getting left behind by the housing recovery. Southern California’s Inland Empire was hit particularly hard by the housing bubble and it’s no surprise that Riverside ranks as one of the metro areas with the highest proportion of homeowners still underwater on their mortgage. While housing prices are beginning to rebound, we must ensure that the recovery is driven by sustainable forces that give families a pathway to homeownership not outside actors looking to exploit the mortgage crisis. It’s only by understanding the factors at work that we can build a housing recovery that reaches every community.”
• Peter Dreier, Professor of Politics and chair of the Urban & Environmental Policy Department at Occidental College;
• Saqib Bhatti, Fellow at the Nathan Cummings Foundation;
• Rob Call, graduate student in urban planning at the Massachusetts Institute of Technology;
• Alex Schwartz, Professor of Urban Policy at the Milano School of International Affairs, Management, and Urban Policy at The New School; and
• Gregory Squires, Professor of Sociology and Public Policy & Public Administration and chair of the Department of Sociology at The George Washington University.
The Haas Institute for a Fair and Inclusive Society at UC Berkeley brings together researchers, community stakeholders, policymakers and communicators to identify and challenge the barriers to an inclusive, just and sustainable society and create transformative change. The Institute serves as a national hub of a vibrant network of researchers and community partners and will take a leadership role in translating, communicating and facilitating research, policy and strategic engagement. The Haas Institute advances research and policy related to marginalized people while essentially touching all who benefit from a truly diverse, fair and inclusive society.
Homeowners and Community Activists Travel to San Antonio, TX to Demand Accountability from Wells Fargo
ADVOCATES WILL HOST PRESS CONFERENCE AT LOCAL WELLS FARGO BRANCH AND PRESENT SHAREHOLDER RESOLUTION ON MORTGAGE SERVICING ABUSES AT WELLS’ SHAREHOLDER MEETING
San Antonio, Texas: April 28, 2014: For the second year in a row, Wells Fargo Bank moved its annual shareholder meeting outside of its hometown of San Francisco, California in a bid to avoid attention over its foreclosure, mortgage servicing and other predatory practices. Homeowners and community activists followed the bank to San Antonio, Texas to demand Wells stop abusive mortgage servicing, foreclosure, and other harmful practices.
Advocates will present a shareholder referendum at the shareholder meeting requiring Wells to conduct an independent review of the bank’s internal controls to ensure that its mortgage and foreclosure practices are not violating fair housing and fair lending laws. The referendum gained 21% of shareholder votes in 2013.
Homeowners and advocates will hold a press conference on Tuesday, April 29, 2014 at 11:00AM, in front of a nearby Wells Fargo branch, located at: 10659 Culebra Rd San Antonio, TX, 78251.
Roxanna Zamora, a homeowner from Whittier, California, is travelling to the meeting to try to save her home where she lives with her two children. She reached out to Wells seeking help from the bank after the end of her marriage and a battle with cancer caused the mortgage on her family’s home of 20 years to fall behind:
“I was met with a total lack of sympathy for my situation, and an unwillingness from Wells Fargo to work with me,” Zamora says. Even after successfully completing trial modifications and working with non-profit groups, Zamora is fighting her foreclosure. She has launched a petition and travelled to Texas with the help of a national community group called the Home Defenders League. “What I need is for Wells Fargo to give me a fresh start- a fair loan modification that reduces my principal and interest, and removes the years of added fees and arrears that have accumulated while I've been in this fight.”
Community organizations are also protesting the bank facilitating investments in private prison and immigrant detention centers through its mutual funds, and the bank up-selling costly bank products to new and existing customers, a practice recently exposed in an LA Times investigation. Advocates are also calling on the bank to provide affordable repayment plans for their customers who have direct deposit advance loans (similar to payday loans) and to stop financing payday and other high-cost, predatory lenders.
Paulina Gonzalez, Executive Director of the California Reinvestment Coalition, explained the need for the fair lending audit in the shareholder referendum:
“Housing counselors across California who help homeowners avoid foreclosure cited Wells Fargo as the hardest servicer to work with for a second year in a row. Communities of color are especially impacted by bad loan servicing, as documented by a new GAO report, which found differences in outcomes relating to trial modifications, cancelations and re-default rates for Limited English Proficient and African American borrowers.”
Peter Skillern, Executive Director of Reinvestment Partners, based in Durham, North Carolina added:
"Reinvestment Partners' experience as a housing counseling agency is the basis for our demand of Wells Fargo to improve its mortgage services. Single point of contacts often do not return phone calls and we have not had a single client who has had principle reduction in a loan modification. We support an independent audit of Wells Fargo's mortgage servicing operations."
Josh Zinner, co-director of New Economy Project, based in New York City, explained:
“Wells Fargo was the most profitable U.S. bank in 2013, and has received hundreds of billions of dollars in taxpayer bailouts and tax subsidies. Meanwhile, the bank’s abusive mortgage servicing practices continue to cause harm to families and communities across the country, particularly in communities of color. Wells Fargo must be held accountable.”
Josh Zinner, New Economy Project: 718-290-6389 email@example.com
Peter Skillern, Reinvestment Partners: 919-667-4201 firstname.lastname@example.org
Laquita Garcia, Texas Organizing Project: 972-342-5116 email@example.com
Kevin Whelan, Home Defenders League: 612–414-9731 firstname.lastname@example.org
(Kevin can speak to the 20 similar events happening around the country)
- Letter to fellow Wells Fargo shareholders: http://bit.ly/whywells
- The shareholder referendum calling for external fair housing/lending audit: http://bit.ly/wellsresolution
- Petition by homeowner Roxanna Zamora to Wells Fargo CEO asking for help with her home: http://start2.occupyourhomes.org/petitions/wells-fargo-keep-roxanna-zamora-in-her-home-stop-foreclosures-pay-us-back-1
- The New Economy Project will bring testimonials from four New York homeowners who have been hurt by the bank’s mortgage servicing and foreclosure practices.
Events are planned in more than 20 cities on Monday April 28th and Tuesday, April 29th, demanding an end to Wells Fargo’s predatory lending and abusive foreclosure practices. Community and labor groups, families facing unjust foreclosure and current and former Wells Fargo employee will rally, distribute flyers and deliver petitions. A partial event list is available here: http://bit.ly/forecloseonwellsfargo
The Day of Action to Hold Wells Fargo Accountable is sponsored by: San Antonio Cesar Chavez Education and Legacy Fund, Texas Organizing Project, New Economy Project, Alliance of Californians for Community Empowerment, California Reinvestment Coalition, Reinvestment Partners, SEIU South Southwest, Occupy Our Homes, Home Defenders League, Make the Road Action Fund, Common Law NYC, and Foreclosure Resisters.
Protests in Eight Cities Target Pimco, BlackRock over Opposition to Richmond, CA Local Principal Reduction Plan
FOR IMMEDIATE RELEASE
Wednesday, October 30, 2013 CONTACT: Nick Sifuentes, 310-866-1692, email@example.com
Protests in Eight Cities Target Pimco, BlackRock over Opposition to Richmond, CA Local Principal Reduction Plan
Community groups call Pimco and BlackRock “Public Enemy #1” for opposing Richmond plan, hold protests at offices in New York, San Francisco and Newport Beach, CA
Multiple Locations – On Wednesday, October 30, 2013, homeowners and community supporters in eight cities visited the corporate offices of giant money managers Pimco and BlackRock as part of an escalating campaign by homeowners, community groups and unions who are fighting for local principal reduction programs in Richmond, California and numerous other cities across the country.
Homeowners, foreclosure victims and community supporters from community groups affiliated with the national Home Defenders League protested at major Pimco and BlackRock offices in New York City, San Francisco, Newport Beach, CA, Seattle, St. Louis, Charlotte, Atlanta and Jersey City, NJ. Protesters called both companies major impediments to saving Main Street from the crimes of Wall Street and disrupted business in their offices, demanding to meet with senior officials from both firms about their attempts to intimidate cities considering local principal reduction programs, including the potential use of eminent domain.
Both Pimco and BlackRock were party to an unsuccessful lawsuit against the city of Richmond over its proposal, “Richmond CARES,” and have been central firms at the heart of the financial crisis—and like other Wall Street entities, BlackRock and Pimco both have been accused of wrongdoing in the fallout from the housing crash, including fraud and failing to adequately protect clients.
“If BlackRock isn't willing to help us, then they should sell our loan to the City of Richmond so that the city can fix it. We want a chance to live the American Dream. As it stands our loan is scheduled to go up again this year, which means eventually we're going to end up in default and lose our home,” said Richmond homeowner Patty Castillo.
Pimco and BlackRock are investors in the underwater loans in Richmond, California that the City and its community allies want to purchase, at fair market value, in order to write-down the mortgage principal and get the homeowners into affordable, sustainable mortgages.
Today’s actions are part of an escalating campaign against the Wall Street giants. The campaign began when Mayor of Richmond Gayle McLaughlin sent a letter to the CEOs of the two companies calling on them to come to the table, saying: “Your company has a choice to make - you can use the incredible wealth and influence of your company as a positive force to help people in Richmond, who are being left behind by the "housing recovery", or you can use it to crush their hopes. We hope you choose to be part of the solution, not part of the problem.”
On October 9th Mary Kay Henry, President of SEIU (Service Employees International Union), the nation’s largest union, called on Pimco and BlackRock to end the campaign of threats and litigation against the City of Richmond. The companies have stated that their actions are on behalf of their clients, including pension funds, and yet SEIU denies this. “SEIU is clearly stating that it has not asked Pimco and BlackRock to sue the City of Richmond, CA and is calling on them to drop their lawsuit and work with the City of Richmond, our members in Richmond and our community allies to find a solution that keeps hardworking families in their homes," Henry said.
On Thursday, October 3rd representatives of ACCE and SEIU disrupted a talk given by PIMCO founder Bill Gross and BlackRock CEO Larry Fink, calling on them to “negotiate, not litigate.” The event was sponsored by the UCLA Anderson School of Business at the Beverly Hilton Hotel in Beverly Hills, CA.
In the coming weeks, community groups and their allies will continue to confront Pimco and BlackRock across the country, calling on them to play a constructive role in resolving the Richmond debate over a proposed solution to the housing crisis.
The Home Defenders League is a national organization fighting against foreclosures and for a just resolution to the mortgage crisis including mass principal reduction for underwater homeowners.
Giant Money Managers Pimco & BlackRock at the Center of an Escalating Campaign by Community Groups and Unions Fed Up with Inaction on Troubled Loans
October 11, 2013 For more information contact: Nick Sifuentes, BerlinRosen (310) 866-1692
Giant Money Managers Pimco & BlackRock at the Center of an Escalating Campaignby Community Groups and Unions Fed Up with Inaction on Troubled Loans
Richmond, CA – The controversy in the City of Richmond over a new strategy to fix troubled loans is spilling over to moneymanagement giants Pimco and BlackRock who have, until now, managed to avoid public ire over the housing crisis. Today, the Mayor of the City of Richmond sent a formal letter to both firms calling on them to come to the table and “be a part of the solution”.
This comes after a protest last Thursday, when a talk by leaders of the two companies, held at the Beverly Hilton Hotel, was disrupted by representatives from the community group ACCE and the labor union SEIU (Service Employees International Union). And early this week, the President of SEIU - the nation’s largest union—issued a public statement calling on the firms to cease legal and lobbying efforts to halt the principal reduction program known as “Richmond CARES.” The two global investment firms had joined the federal lawsuit to block this housing program, which has been dismissed for standing, but is expected to resurface.
Pimco and BlackRock are investors in the underwater loans in Richmond, California that the City and its community allies want to purchase, at fair market value, in order to write-down the mortgage principal and get the homeowners into affordable, sustainable mortgages. The two firms invest billions in assets and are some of the biggest investors in loans – many of them predatory – that were bundled into securitized pools, or Residential Mortgage Backed Securities.
Unlike major banks, which have faced regular protests by groups outraged by the foreclosure crisis, Pimco and BlackRock are seldom the targets of such protests and campaigning. But that is about to change.
The Mayor of Richmond’s formal “shot across the bow,” came in the form of a letter to the CEOs of the two companies (attached), calling on them to come to the table. Mayor Gayle McLaughlin writes in her letter, “Your company has a choice to make - you can use the incredible wealth and influence of your company as a positive force to help people in Richmond, who are being left behind by the "housing recovery", or you can use it to crush their hopes. We hope you choose to be part of the solution, not part of the problem.”
Richmond underwater homeowner and community leader Morris LeGrande states, “The whole point here is that we’d like to work with these bondholders to find a win-win solution that works for all of us – homeowners, the city and investors. But if these bankers and investors won’t even try to negotiate with us, we have no choice but to fight them. We’re not going to let up.”
And the community campaign has begun.
On Thursday, October 3rd representatives of the community group ACCE and the labor union SEIU disrupted a talk given by PIMCOfounder Bill Gross and BlackRock CEO Larry Fink, calling on them to “negotiate, not litigate.” The event was sponsored by the UCLA Anderson School of Business at the Beverly Hilton Hotel in Beverly Hills, CA. This action was covered by Lauren Windsor, reporter with Undercurrent and the Young Turks Network, who produced this video: http://www.youtube.com/watch?v=qnDsrntqNBk
On Wednesday, October 9th Mary Kay Henry, President of SEIU (Service Employees International Union), the nation’s largest union, called on Pimco and BlackRock to end the campaign of threats and litigation against the City of Richmond (attached). The companies have stated that their actions are on behalf of their clients, including pension funds, and yet SEIU denies this. “SEIU is clearly stating that it has not asked Pimco and BlackRock to sue the City of Richmond, CA and is calling on them to drop their lawsuit and work with the City of Richmond, our members in Richmond and our community allies to find a solution that keeps hardworking families in their homes," Henry said.
In the coming weeks, community groups and their allies will be confronting Pimco and BlackRock across the country, calling on them to play a constructive role in resolving the Richmond debate over a proposed solution to the housing crisis.