Why Is the Seattle City Council Still Hanging Foreclosure-Hit Homeowners Out to Dry?

Comments

1
How much do you earn Ansel? Surely you can help Dixie out a bit.
2
Roughly 20,000 households fall into that category.


With how quickly the real estate market has recovered, how is this possible? Is this including home equity loans, and, if so, are you seriously proposing that the city bail out homeowners who used their homes as credit cards?
3
It takes a real total egomaniacal little dickhead to tell Nick Licata to show some leadership. Hey, Ansel, tell you what. You think you're such hot buttered shit, YOU run for City Council.
4
Man, this Ansel guy is fucking annoying. Seems like a 12 year old with an extremely naive view of the world and no ability to see shades of grey.
5
@2 People used their homes as credit cards because there isn't enough money rooting around down here in the dirt. It was one of the ways that the lower class and lower middle class made up for stagnating wages. Both parents going to work is another. Multiple jobs is another. Then credit cards. Then, home loans became the next vestige. And when that became too much, bam, foreclosure. Especially after all the work had been done on the house.

It's really insidious.
6
Ansel,

I'm disappointed that you didn't reference the handout Nick and Councilmember Clark passed out in committee and that I sent to you on Thursday. See here:

STRATEGY 2. Principal Reduction/Buy Back Program
In some cases, existing foreclosure assistance programs are not able to provide resolution and additional solutions are needed. As noted in the City IDT report, in Boston and in Oregon, programs have been developed to acquire foreclosed properties at present-market prices and sell them back to existing owners at manageable mortgages. These programs have been used to assist homeowners with incomes sufficient to support payments on the current fair market value of their home in neighborhoods where housing prices surged and then rapidly declined. In addition, principal reduction could help buoy the larger economy by allowing for more cash flow and re-incentivizing the homeowner to remodel or make other investments as needed.

A 2012 Federal Reserve Report concluded that, “Principal reduction may reduce the incidence of default both by improving a household's financial position, and thus increasing its resilience to economic shocks." However, most loan modifications have not included principal reduction.

In exploring the creation of a Principal Reduction/Buy Back Program, the Council will consider:

• Whether there is an interest on the part of other private and public funders, including lending institutions, to partner with the City and to raise the capital necessary to support such a program.

• Neighborhoods with households at risk for foreclosure that may be a match for this type of program;

• Estimated program start-up and implementation costs and funding options;

• Implementation models; and

• The interest in state legislation to authorize implementation of the program by allowing original owners to remain in the home after short-sales in certain circumstances.

RESULTS: The Council will report back by December 2014.
7
@5,

A homeowner who owns property in Seattle would have done well to cash in at the height of the market, not take out home equity loans. A lot of that was fueled by the fiction that home prices would always increase. Remember that?

I still think it's a political non-starter to bail out homeowners who used their home equity as credit cards. Even Seattle isn't liberal enough for that.
8
TL;dr Signed a mortgage agreement. Can't make the payments. Bank forecloses on mortgage. Homeowner is no longer a homeowner.
9
I wish people knew just how predatory those fucking ARMs were. I knew they were bad when my family was talking about them 20 years ago.

ARMs are quite deceptive, since can inflate by 10-20 times their initial rate, thus ballooning up the payment, which causes the foreclosures. If you think that's justifiable, OK. But, there have been documented cases where homeowners, seeing what's happening, have tried to re-fi before they missed a payment, and were told they couldn't re-fi until they missed three payments, and then...bam...foreclosure. I don't think that's justifiable.

Whether we help out the ones who are drowning, or putting bans on the banks for their practices, or whatever, something should be done to help prevent the foreclosures from happening unjustifiably.
10
@9 stupid people shouldnt be able to take out mortgage loans.

11
Here's the flaw in Ansel's logic. He seems to think that everyone who supported raising the minimum wage also supports us paying off people's debt.

I supported increasing the minimum wage because it gives workers a chance. I don't support paying off people's debt. We have bankruptcy protections for people who genuinely can't pay. Paying down their debt just gives the banks money and doesn't solve anything.
12
This is a horrible problem, but it can't be solved, or even helped, by city councils. They can't go up against national (or international) banks without a whole slew of legal problems which they'd have to defend, and on which they'd lose in court. I wish Ansel would research things better before ranting (or at the very least, listen to Licata's office, which usually knows what's rational and what isn't).
13
FYI, the Barton residence is not anywhere near Delridge. It's in Gatewood. Evictions/foreclosures happen in the western West Seattle neighborhoods too.
14
So you're saying there's a councilmember with a criminal record and is booked into the police system with fingerprints and dna and such ?
15
All the commenters on the blog that are criticizing the homeowners, must not know what is happening in our courts. Perhaps a few of you should attend some foreclosure hearings. You would hear things that I've heard. In McDonald v. One West evidentiary hearing when the bank witness was asked why there was two copies of the promissory note, one being endorsed in blank on the far right of the page and one endorsed on the far left hand side of the page. When questioned about how this could happen, the bank witness replied, "Sometimes the note gets copied and sometimes those copies can get endorsed." Translation: They are copying negotiable instruments and endorsing them, effectively two negotiable instruments in circulation from ONE LOAN? In what reality is that legal???

And then there is this article. Read this one, this litigation is now before the King County Superior Court:
http://stopforeclosurefraud.com/2014/03/…

Yeah, it looks like a few of you need to spend a day listening the immense amount of bank malfeasance that goes on, on a daily basis. Do yourselves a favor and educate yourselves before you look like baffoons for all to see.
16
The article to search for on www dot stopforeclosurefraud dot com is
"Quality Loan Service Corporation of Washington Discovery Showing Uncertainty in Validity of WaMu/Chase Declarations of Ownership (5810) Dec"

Sorry, I wasn't aware that The Stranger would not link that article to this page. Bummer.
17
For those homeowners in Washington State who are fed up with the political climate not responding to these legitimate taxpayer homeowner complaints:

We are peacefully rallying on July 11, 2014. Please meet at Westlake at NOON. We are protesting as an elite group of non-elected bank attorneys are converging on The Westin to continue drafting non-consumer-friendly legislation specifically, "Home Foreclosure Procedures Act." The drafting Committee is receiving outside funds from Freddie Mac, Fannie Mae and the Federal Reserve Bank of New York.

Please log on to www dot RollingRebellion dot org. Click on the "Action Map." This will link you to the details of the protest, who we are protesting and why. Please come fight the continued crimes of the bankers! Please come fight against crony capitalism! Please come defend the Property Rights of Washington State citizens! Please come tell Olympia we are tired of inaction!
18
Always roll my eyes at the folks who blame the borrower for taking on predatory loans. Did you guys read all 50-80 pages of small font legal docs in escrow on your mortgages? Have you ever even had a mortgage?? We're college educated, and tried to be very thorough, but for our home mortgage my wife and were completely dependent on the trust we placed in our real estate agent and escrow staff. We were educated enough to know to get a fixed rate. But who knows what could have happened if we didn't know and trust our agent. I have been lied to plenty of times by sales folks about what I sign for. In fact it sounds like the corprate sales staff my wife supports at her job is making false promises all the time to their customers. And I've read plenty of stories about lying cheating banks. So please dispense with the blame the victim attitude already!
19
Judge George Bowden from Snohomish County Superior court just authored a court order which over-turned a Trustee's Sale of foreclosure, DENIED the bank possession of the property and awarded the Homeowner with attorney fees and damages!

So, if the lower courts are finally getting FED UP, why isn't the populace?

If you ARE fed up with the continued banking crimes, please come to the Anti-Foreclosure Rally "Rolling Rebellion" on July 11, 2014. We meet at Westlake at noon. There will be foreclosure defense attorneys speaking along with candidates that have solutions to the foreclosure crisis that want to be sent to Olympia. Please send the anti-corporate attorneys to Olympia, time to saying No to Big Corporate Interests.

Go to www dot RollingRebellion dot org. Click on "Action Map" and you will find details to the July 11 anti-foreclosure rally at Westlake. Please join us.
21
@18

Excuse me? Understanding documents that obligate you to pay large amounts of money is too haaaarrrrdddd! You're "forced" to rely on realtors and the bank to understand them?

Signing a mortgage is a contract. Some people take the trouble to understand it. Others like you and your wife, don't. But if you don't the terms are still binding anyway.

Oh, and bank tricks or not- foreclosure doesn't happen to people who employ the childishly simple technique of PAYING THEIR MORTGAGES.
22
Ansel Herz: the Nick Kristof of Slog.
23
@keshmeshi, here is how it is possible that 20,000 Seattle households are at risk or already in foreclosure:

A sudden job loss, a disabling illness or death of a family member who was helping pay the mortgage, the need to cut back work hours or stop working altogether to take care of a sick family member--that's all it takes to wind up in foreclosure. Even people with savings can quickly rip through their nest egg and wind up with three late mortgage payments. Banks and their financial industry bottom feeding lackeys--the mortgage servicers, auctioneers, real estate agents--foreclose on approximately three Seattle households EVERY SINGLE DAY--and oftentimes these houses get sold to REITs and hedge funds that give them a few cosmetic improvements and rent them for more than the amount of the previous owners' mortgage payments. Fannie Mae and Freddie Mac prohibit people who lost their homes through foreclosure from bidding them at auctions, even when their financial circumstances have improved and they have found new jobs that restored their ability to make mortgage payments. I know many people with 10, 15, 20 or more years of solid work experience at good paying jobs who lost their houses after they were laid off. I know people in their 50s and 60s who went from making $90,000 a year to being long term unemployed because of sweeping layoffs coupled with rampant age discrimination that makes it very difficult for older employees to obtain jobs that pay anything near what they were making before they were laid off. Foreclosure can happen to ANYONE except the uber rich, and those who were fortunate enough to buy their houses decades ago and pay them off before the economy tanked.

In the eight years since the housing market tanked, and the seven years since the entire global economy tanked, the City of Seattle has done NOTHING to help people in forclosure. The report referred to in this article reads like something put together by a team of high school students, not seasoned staff and/or competent consultants who understand housing issues, even though Seattle has been studying this issue for years. Seattle's only game plan is to spend $150,000 to produce a brochure that lists community resources for people coping with foreclosure, and in some vague and undefined way further "study" this issue. In fact, except for CMs Sawant and Licata, it is apparent that the Seattle City Council thinks the foreclosure problem is "over," when in reality we are simply in a lull between the last crash and the next one.
24
I'm not blaming the people for this. Some have had devastating illnesses, job loss, etc. But paying their debt down only puts more money in the hands of the banks, it doesn't solve anything. I'm sorry people are getting foreclosed, but if we want to change the predatory lending practices, giving banks more money is NOT a good idea.
25
@21: Understanding that the document obligates you to pay back a large amount of money is easy. Understanding under what circumstances the document allows the lender to raise interest rates, charge exorbitant fees, or otherwise bleed their lenders dry, can be quite difficult. Are you really so sheltered and ignorant that you don't know what legalese is?
26
@23,

20,000 households aren't at risk of foreclosure; 20,000 households are *underwater*, which means the homeowner owns more on the house than the house is worth. The housing market in this city has basically completely rebounded back to its peak in 2007. I don't see how 20,000 households are underwater unless a significant number of these people intentionally borrowed against the house, i.e. used their homes as credit cards.
27
@23,

Also, being underwater doesn't translate into being at risk of foreclosure. If the homeowner can afford to pay the mortgage month after month, foreclosure is not a serious risk.
28
@25

easy fucking solution for the brickheads out there who dont bother to read the fine print or fail to understand it: hire a lawyer for $500 to review the documents before signing. if you about to hundreds of thousands of dollars into debt for a house, you can afford spend the $ to have someone review the terms.

if you dont understand what you are signing, then its up to you to find someone who does so they can explain it to you. If you dont - then tough shit - you lose.
29
@28: But that's the thing, right? Lenders sometimes tell the borrowers that there's nothing special, that it's just standard paperwork, that they can trust them. Spending $500 to have a lawyer look over the document doesn't occur to, and doesn't seem like a good investment to your average working-class schmo. And honestly? It shouldn't be one. Rather than making more business for lawyers looking to review documents for red flags, we should be legislating against predatory lending practices.
30
@21 & 25, sure sure it's my responsibility to understand what I sign. What sbout the lenders responsibility to not fucking lie about what they ask me to sign?!?!? Or submit false claims in foreclosure documents? And since you're addressing my comment how about answering my question: do you have a mortgage and did you personally read every page when signing at escrow??

And @21 why did you used "forced" in quotes? I said no such thing. And I never said my wife and I didn't take the trouble to understand the docs - we did. I merely acknowledged that it was quite a task and with lying cheating banks I am not surprised that people have been burned and that I don't entirely blame them if the bankers were lying and cheating!
31
@30 I read the documents, all of them, and hired a real estate attorney to read over them too. I considered this a sensible investment, much like title insurance. Then again, I also read the fine print on all my insurance documents so maybe I have a problem :-P
32
How about the user agreement for free software? Haha
34
That woman was stupid to get an ARM. - Where is an ADJUSTABLE rate mortgage going to move from 3%? It could go to 0% or it could go to 20%. Which is more likely.

She was stupider not to read what she signed. - How many free assistance programs are out there to help homeowners through this sort of arrangement. She did not take advantage of them apparently.

Don't subsidize stupidity - you'll just get more of it.

35
Clearly the best solution for all is to ban banks from loaning to morons, poor, low income, stupid people, people with shitty credit ratings.

Credit only for the credit worthy. When my mom got hurt first Amex credit card she had to go to the bank and be interviewed! Now they give out Amex cards to anyone with a pulse at Costco.
36
@1 The banks and MERS just got their asses handed to them in Pennsylvania when the Montgomery County Register of Deeds Nancy Becker prevailed against MERSCORP,
http://www.bloomberg.com/news/2014-07-01…

now the banksters are coming to Seattle on 11 July to try to merge the UCC Articles 3 and 9 to try to clean up their fraud. Many of us will be rallying to speak out against this. Lawyers, politicians, activists..... Ansel's diligence here is to be commended, from the time I met him last fall he has been at every event I've attended and then some.

Here are the City Councilors last fall at a forum where everyone promised to investigate all options..... some of the same people seen in this story are seen or mentioned here:

http://mortgagemovies.blogspot.com/2013/…

https://www.youtube.com/watch?v=cNVyyETF…

Now then why doesn't Seattle or King County go after all of that money that those scumbags owe for not recording purported transfers of property......

And to hell with you haters, because I know I'm right. So is Judge Joyner.

Sincerely,
Christopher King, J.D.
37
What people who are commenting here calling others "morons" apparently don't know:

1) Even if you are NOT in default, the banking crimes affect you, esp if you: a) re-fi'd your mortgage in the last 15 years, and b) paid off or re-fi'd your mortgage without obtaining the EXTINGUISHED promissory note!

So, the people who have claimed others are "morons," one question: Did you obtain the extinguished promissory note when you: a) sold the property? or b) refinanced your home?

If not, then I can now call you a moron without fear of being wrong.
38
Also: why is this populace so determined to call homeowners "morons"? Especially since the BANKS are required to follow the laws when they foreclose? And THE BANKS ARE NOT FOLLOWING THE LAWS. Some of you need to spend some time in a few courtrooms, it appears. Because if you heard what I've heard over the last four years, you would not be so eager to label others.
39
It comes down to a very simple question.
Either you believe that housing is a human right, or you don't. (And its clear that a fair number of people don't).

If you do, then we might meaningfully split hairs about who should get the nicest house and how hard they should have to work for it, and how "smart" (as opposed to "stupid") they should have to be.

But if you don't, then there is no way you can draw any line against the greed of banks, or how much land they should be able to control, or how many houses we should publicly fund the sherriff to evict people from on their behalf, because, after all, "stupid people" SHOULD be manipulated and taken advantage of, and you believe yourself "smart" enough to always be on the winning end of the barbarian spear. So, all I can say to you now is this. When someone else who also thinks that way finds an angle by which to push you under the wagon and take your home, I hope you survive. We who believe in civilization will still be here then to help you up and help you fight for your human right to a roof. But until that day, fellow taxpayer, at least don't subsidize greed, you'll get more of it. Let the banks pay the full cost of the Sherriff's time for each foreclosure eviction. And, if they don't pay, then simply don't send the cops to carry out the task.
40
The Barton Family needs you! An eviction blockade will be starting Thursday (July 17th) at 7AM. Bring a tent.

https://www.facebook.com/events/14355073…
41
Looks like someone is trying to exploit a Vietnam Vet for a cause. In addition, sure looks like SAFE (Standing Against Foreclosures and Evictions) is being taken over by the UNIONS and the government-backed non-profits. Just like both entities did to Occupy Seattle. Just when things get organized, the government comes in and fucks things up.

NOT THIS TIME,. Not this time.