60 Minutes: Another Good Reason to Occupy Foreclosed Homes?

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By Diane Sweet - Crooks & Liars
December 19, 2011

Yet another good reason to occupy homes: Foreclosure thieves have gone high tech. They know when evictions are occurring because they're posted online. And they will follow the sheriff. They're usually there that afternoon or that evening.

Across America, recession-fueled foreclosures and plummeting home values have left countless properties abandoned and vulnerable to looting. As Scott Pelley reports in the above video, the problem has gotten so bad in Cleveland, Ohio, that county officials have demolished more than 1,000 homes this year - and plan to demolish 20,000 more - rather than let the blight spread and render nearby homes worthless.

Jim Rokakis, a former county treasurer, explains why to 60 Minutes:

Jim Rokakis: We're looking at a neighborhood that has almost as many vacant houses awaiting demolition as there are houses with people living in them. We have one here. One here. One here. One there.

Rokakis is leading the effort to tear down thousands of abandoned homes because they're rotting their neighborhoods from the inside out. It often starts, he told us, when a vacant house becomes an open house to thieves.

Scott Pelley: It's a nice house from the roof to about here. And then down here it's been ripped to pieces. What's goin' on?

Rokakis: Well this is typical because this is as high as they could reach without using ladders. They ripped off the aluminum siding, which you'll see on most of these houses. The aluminum and the vinyl siding comes off. It's getting' about a buck a pound.

Pelley: Essentially foreclosure scavengers have been through here?

Rokakis: The thieves have gone high tech. They know when evictions are occurring 'cause they're posted online. And they will follow the sheriff. They're usually there that afternoon or that evening.

CBS reports that 11 million homeowners are said to be "underwater," or owing more than their house is worth. It's believed that even more neighborhoods would fall into ruin if it weren't for the people who refuse to walk away from their homes, even it might be best for them financially.

Pelley speaks with Linda Bizzelle of Cleveland, who has refused to give up on her home:

Her house is worth 50,000, she owes a hundred. A financial planner might tell her to put something away for retirement rather than pay a mortgage that will never recover. Especially, since she lost her job in nursing last April.

Pelley: What have you been cutting back on?

Bizzelle: Sometimes food. I would go to the food bank in order to make up the difference, so that I wouldn't be completely hungry. Sometimes I wouldn't get my medications renewed and I would have difficulty with that because I really need my medications. I take medication for high blood pressure. And my doctor could always tell when I didn't take 'em and I said, "Oh no, you can't do that. No No."

Pelley: You're living on unemployment right now?

Bizzelle: Yes.

Pelley: What about the next mortgage payment?

Bizzelle: I'm gonna pray. That's the best I can do. I'm gonna pray that I find a job.

More homeowners like Linda Bizelle in the program, and you can view the entire transcript online here.

Home Sweet Wall Street

Wednesday, February 16, 2011 by TruthDig.com
by Robert Scheer

A most dastardly deed occurred last Friday when the Obama administration issued a 29-page policy statement totally abandoning the federal government’s time-honored role in helping Americans achieve the goal of home ownership. Instead of punishing the banks that sabotaged the American ideal of a nation of stakeholders by “securitizing” our homesteads into poker chips to be gambled away in the Wall Street casino, Barack Obama now proposes to turn over the entire mortgage industry to those same banks.

The proposal, originated by Treasury Secretary Timothy Geithner, involves nothing less than a total “winding down” of the 80-year-old federal housing program, setting instead a new goal of a two-tiered America in which the masses are content to be mere renters of the American Dream. Such a deal for a country where, as the report concedes, “Half of all renters spend more than a third of their income on housing, and a quarter spend more than half.”

Wall Street

This is the same Geithner who during his tenure in the Clinton Treasury Department championed the total deregulation of the then-emerging market in collateralized debt obligations that sliced and diced people’s home mortgages into the toxic securities that created what his new report calls the greatest economic crisis since the Great Depression. Later, as president of the New York Fed, he cheered on the banks as they went hog-wild, conning folks into buying homes they couldn’t afford and stuffing them into the incomprehensible securities that form the rot at the core of our bankrupt economy.

This is a made-in-the-U.S. nightmare that we inflicted on the world, thanks to an explosion in those toxic securities brought on by the deregulation that most of the Obama economic brain trust supported when they worked for President Bill Clinton and during the ensuing bubble years when they enriched themselves. As the report admits:

“The U.S. is … the only high income country in which securitization plays a major role in housing finance.” 

Yet instead of ending that practice Obama now calls for more of the same:

“The Administration believes the securitization market should continue to play a key role in housing finance.” 

Indeed, the plan’s goal of eliminating Fannie Mae and Freddie Mac will dry up the alternative public funding that has provided a source of mortgage support ever since President Franklin Delano Roosevelt launched Fannie Mae to check the power of the banks over mortgages. Now Obama proposes to eliminate that check and leave would-be homeowners to the tender mercy of the banking giants.

Of course Fannie Mae and Freddie Mac also bear responsibility for the meltdown. They had morphed into for-profit enterprises and, just as with the Wall Street firms, the massive bonuses paid out to their top executives were contingent on the value of their stock prices, which in turn were fattened by the sale of those same toxic assets. As the Obama report puts it, “Fannie Mae and Freddie Mac’s profit-maximizing structure undermined their public mission.” What the administration should have proposed is to return the government-sponsored housing agencies to their original function as nonprofit entities supplementing, rather than aping, the practices of greedy bankers.

It wasn’t meant to end this way, and key Democrats, quite a few of them Clinton alums now in the Obama administration, bear the responsibility for the sad fate of Roosevelt’s dream. As the Obama proposal concedes: “Improving how housing was financed was an important part of these broader Depression-era reforms. In the 1930s, following severe mortgage market disruptions, widespread foreclosures, and sinking homeownership rates, the government created the Federal Housing Administration (FHA), Fannie Mae, the Federal Home Loan Banks (FHLBs) and several decades later, Freddie Mac to help promote secure and sustainable homeownership for future generations of Americans. Fannie Mae and Freddie Mac held true to their original mission for many years.” What the report then neglects to discuss is the demise of Roosevelt’s grand experiment at the hands of Democratic Party hustlers who turned the agencies away from their “original mission” and into their personal piggy banks while getting Democrats in Congress to approve regulations enabling their greed.

The folks around President Obama know this sad tale well because some of them were principal actors in the housing agencies’ betrayal of the public trust. Just take the case of Tom Donilon, whom Obama recently appointed to the highly sensitive position of national security adviser. It was Donilon who was the top legal counsel and lobbyist for Fannie Mae from 1999 to 2005, a period when the agency went off the tracks in backing Countrywide and other private-sector bandits in their irresponsible rip-off scams. “He was in charge of the lobbyists. … That process involved using the Hill to rein in the regulators,” noted Stephen Blumenthal, who, as director of the Office of Federal Housing Enterprise Oversight, was hindered by Donilon’s lobbying. As the report concedes without mentioning Donilon’s role, “Over the years, Fannie Mae and Freddie Mac’s aggressive lobbying efforts had successfully defeated efforts to bring them under closer supervision.”

Donilon, who received $10 million in the three years leading up to the scandal of 2004, when Fannie Mae was fined $400 million for juggling its books to enhance executive bonuses, will never have any trouble financing a home purchase. Not so the tens of millions of Americans who have lost their homes because of his reprehensible actions and the many more in the future who will be denied government support in trying to get a place of their own.