If one issue comes to define the arena of economic populism in the first decade of the 21st century, that issue may well be the epidemic of foreclosures afflicting middle and working class Americans who watch as government bailouts and subsidies seem to go to the country’s richest corporations and residents.
The subject was front and center as the Reverend Jesse Jackson visited Brooklyn, April 21st, to give the keynote speech at a mortgage lenders and homeowners forum sponsored by the Rainbow PUSH Coalition.
Jackson spoke to the group gathered at the Hanson Place Central United Methodist Church, 144 St. Felix Street – in the shadow of the Williamsburg Savings Bank Building, where the price of co-op apartments targeted at the wealthy starts at over $600,000, and across the street from the site of the proposed Atlantic Yards project, whose developer, Bruce Ratner, has already gotten over $2 billion in government subsidies.
The contrast was marked. Among those in the audience was a young woman wearing a tee shirt whose slogan pulled no punches: HELP ME KEEP MY HOME, the shirt read.
Indeed, Brooklyn homeowners facing the possibility of foreclosure are looking for far less than are well-heeled developers and corporations – basically the restructuring of loans to enable them to meet monthly mortgage payment obligations -- and hoping help will come from a federal government that has moved slowly to address the burgeoning crisis.
“In my estimation, the administration is dragging its feet, creaming the situation, to enhance the lives of their friends,” noted Representative Yvette Clarke, who joined Jackson at the forum.
All the speakers agreed that Brooklyn was a nexus for the foreclosure crisis, with 20 families in the borough losing their homes to foreclosure every day. Indeed, the borough is “second in the state in terms of foreclosures,” said Jane Azia, the director of non-depository institutions and consumer affairs for the state Banking Department.
Central Brooklyn, in particular, is especially hard-hit. “This is Ground Zero for displacement, particularly for small businesses and homeowners,” noted City Councilmember Letitia James. “It’s the epicenter of the sub prime market crisis, where the biggest transfer of wealth is happening. So many people of color are losing their homes, particularly single female heads of households. They are bailing out all of the companies and banks. What they need to do is bail out you, the constituents we serve.”
The solution is straightforward, said Jackson. “People in a hole need a rope to pull them up, not a shovel to dig the hole deeper,” he contended. “People want to pay. We want the government to declare a moratorium on foreclosures long enough to restructure loans, not repossess homes. That’s what must happen.”
Part of the problem is the high rate of sub prime mortgages in Brooklyn neighborhoods. Five out of the 10 neighborhoods with the highest number of sub-prime loans are in central Brooklyn, according to Clarke.
And, yet, Jackson said, fully half of those “steered to” sub prime loans were eligible for prime loans. Add college loans for their children to sub prime home mortgages, he emphasized and, “For some folks, this is a depression already.”
Many of the neighborhoods where sub prime mortgages are most common are ones that were red-lined several decades ago, the speakers noted.
“If you look at the New York map,” Jackson told the crowd, “certain neighborhoods were targeted. You can see the clustering. They are the same neighborhoods that once got red-lined. You see patterns of race discrimination.”
“I find it ironic,” added City Councilmember Charles Barron. “Years ago, remember, they red-lined us. They didn’t want to give us loans. This is like a reverse red-lining. Now, they want to give us loans, predatory loans. Many people were qualified for prime loans, and they give them sub prime loans anyhow.”
The struggle to help homeowners keep their homes is, “Another fight in the civil rights movement, another fight for justice,” James contended.
Foreclosures are not only a personal disaster but a communal one, the speakers stressed. “When my house goes, the value of your house goes,” Jackson pointed out, noting also that a high rate of foreclosures adds up to a diminished tax base that, in turn, means reductions in basic city services such as education, transportation and police protection.
“You go to Prince George’s County (in Maryland),” said Jackson. “There are 15,000 homes in foreclosure, which has devalued 300,000 homes.” The loss in value, Jackson went on, is approximately $3 billion – the size of the county budget, he said.
“So go our homeowners, so go our communities,” added Clarke. “There’s a tipping point where our communities could become abandoned.”
As many as 70 percent of the people who are facing foreclosure do not seek help, but simply walk away from their homes, according to Jackson. “There’s an embarrassment,” he remarked. “It’s almost like a kind of rape.
“Two months ago,” he added, “I was at a church and I asked, Was there anyone in the church who was facing foreclosure? No hands went up. Then, I asked if anyone knew anyone facing foreclosure. Every hand went up.”
In 2007, according to statistics reported by Realty Trac, there were 59,000 foreclosure filings involving 39,000 homes in New York State, with 66 percent of filings occurring in New York City.
In particular, approximately 40 percent of the foreclosures in the state occur in Brooklyn and Queens