The American mortgage crisis is perhaps the most widespread effect of the 2008 financial meltdown. In coastal California, it keeps getting worse.
Foreclosures on the rise are a principal rallying point for Occupy Santa Cruz, and now community members are off the streets and inside doing their homework. On May 15, the Occupy Foreclosures Working Group (OFWG) and the Santa Cruz chapter of the Women’s International League for Peace and Freedom (WILPF) sponsored a workshop on foreclosure fraud at the Quaker Center.
C.J. Holmes, a Bay Area realtor, presented the conclusions of her five years of research on foreclosures at the workshop. She said banks have been using electronic mortgage practices to cheat homeowners and are turning the United States into a “nation of renters.”
“We’re trying to figure out how we can weasel what we need to stop ‘fraudclosures’—and I call them that because every last one of them is fraudulent,” Holmes said. “Not every foreclosure is fraudulent, but every foreclosure on a securitized loan that has been held in MERS is definitely fraudulent.”
MERS, or Mortgage Electronic Registration Systems, is a company that tracks ownership of U.S. real estate loans. According to their website, “MERS is an innovative process that simplifies the way mortgage ownership and servicing rights are originated, sold and tracked.”
The complexity of mortgage-backed securities — pools of loans rated at varying degrees of risk to sell to investors in bulk — prompted the electronic restructuring of real estate finance and, hence, MERS. But Holmes ultimately found that land titles can be lost in MERS’ database, and that county recorders’ offices around the state have allowed foreclosures to go through without banks’guarantees of home ownership.
Holmes also said that, according to the website Foreclosure Radar, 609 foreclosed home auctions are scheduled in Santa Cruz County for the next two and half months, with 192 remaining in May alone.
“The injustice that’s happening because of [the mortgage crisis] is so personal and close to the heart of our families, affecting the well-being of our communities and families at so many levels,” said Jeri Bodemar, a member of WILPF. “It’s a prime example of what is actually happening in our nation — the theft of our common property.”
Joy Hinz, who has worked with OFWG since its beginning, said they have pressured local government to take action, but found that, in many respects, the county’s hands are legally tied.
“There are many federal and state laws that preempt our county from doing much of anything to stop foreclosures,” she said. “It’s very, very frustrating, because if you try to do something and you’re not allowed to, you’re going to get sued.”
Despite limitations, the county supervisors are onboard with fighting local foreclosures, Hinz said.
On May 15, the morning before the workshop, the supervisors received an extensive report detailing county foreclosures and allegedly fraudulent mortgage practices. The supervisors then passed a resolution calling for banks to suspend foreclosures. However, it will be difficult to enforce because foreclosure law is mandated by the state, not the county board of supervisors.
Fourth-year feminist studies and psychology major at UCSC Jacqueline Seydel is spearheading student efforts to unite with the Santa Cruz community in combating foreclosures.
“The foreclosure crisis is really important because it connects and relates to everyone. It doesn’t matter if you’re without a home, renting, have multiple properties, or are in the pursuit of one,” she said. “You’ll be able to relate to that sort of struggle and be able to see the crisis … the fraud that’s happening.”
Seydel and other students will be making a TED Talks–style video outlining how the mortgage and financial crises intersect, and what communities can do to counteract foreclosures. Holmes is continuing to work with OFWG and WILPF to create a citizen fraud investigation training program, in hopes of teaching community members to identify mortgage fraud and work to prosecute it.
More information can be found at Occupy Foreclosures Working Group’s website or CJ Holmes’website, Homeowners for Justice.