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Two actions target Fannie Mae

Four years after Fannie Mae and Freddie Mac were put under federal conservatorship, actions tomorrow and next Monday are targeting the agencies for blocking principal reduction in mortgage refinances.

On Wednesday, September 5, Occupy Chicago will rally at 5 p.m. at Fannie Mae’s office at 1 S. Wacker, where families facing eviction will speak out, and then march to President Obama’s campaign headquarters, 130 E. Randolph, where protestors will be chained together with balls representing mortgage debt.

It’s part of three days of actions targeting “Obama’s failures as president” and “how both Obama and Romney fail to represent the interests of the 99 Percent,” according to a Facebook announcement.

On Monday, September 10, local community groups joined by Occupy Our Homes groups from Minneapolis and Detroit will march from Daley Plaza at noon and rally in front of Fannie Mae (1 S. Wacker) at 1 p.m. and Freddie Mac (333 W. Wacker) at 2.

That protest is part of a national day of action against Fannie and Freddie by community groups working to stop foreclosures in several cities, said Stuart Schussler of Centro Autonomo of Albany ParkChicago Anti-Eviction Campaign is also participating.

Centro Autonomo protests at bank branches to support families in foreclosure who are seeking loan modifications. Principal reduction is a vital component of affordable loan mods, Schussler said.

“Sometimes we get a favorable response from the bank” that’s servicing the mortgage, but but if Fannie or Freddie holds the morgage – as they do in a large proportion of cases – “they’ll say it’s out of our hands,” he said.

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AG Madigan to back ‘maximum’ homeowner relief

At a rally with community organizations on Sunday, Illinois Attorney General Lisa Madigan is expected to commit to pressing for “maximum” mortgage relief for underwater homeowners as part of the federal-state investigation into bank fraud.

She’ll appear with the regional organizing network IIRON on Sunday, June 10 at 3 p.m. at St. Mark’s United Methodist Church, 8441 S. St. Lawrence.  IIRON will also be unveiling a new Covenant for Economic Justice.

It’s a significant step for Madigan, who’s a member of an Obama administration task force investigating securitization fraud in the foreclosure crisis, organizers say.

Last year IIRON pressed Madigan to hold out for more money to help homeowners wrongfully foreclosed on in the robo-signing settlement by state attorney generals. Though the monetary settlement in that case was disappointing, grassroots pressure did result in limiting banks’ immunity from liability in the deal, said David Hatch of IIRON.

He said IIRON and groups including National People’s Action are calling for $350 billion worth of principal reduction for underwater homeowners.  An NPA report last year estimated underwater homeowners in the U.S. owe a total of $700 billion more than their homes are worth.

Stealth bailout

That’s a serious drag on the economy, these groups argue, taking hundreds of billions of dollars out of the consumer economy – and a “stealth bailout” of banks, which caused the housing crash through reckless and predatory lending practices, and which have received trillions of dollars in bailouts and backstops, most of which will never be repaid.

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Robo-signing settlement called ‘good step,’ ‘sell-out’

Responses from community groups and advocates to the robo-signing settlement announced Thursday ranged from “good first step” to “sell-out to Wall Street.”

The Woodstock Institute emphasized the significant precedent of requiring banks to write down principals for homeowners who owe more than their homes are worth – an approach lenders have generally avoided taking until now.

The settlement “won’t end the troubles of homeowners” but is a “significant step in the right direction,” said Dory Rand.  She said resources need to be targeted to the hardest-hit communities. She called it “a real victory for homeowners.”

The $1 billion in homeowner relief expected for Illinois “will not suffice to restore all of homeowners’ lost wealth” but “it can potentially turn back the tides of default in hard-hit communities,” she said.

Woodstock estimates that 400,000 Chicago-area homeowners are underwater on their mortgages, together owing nearly $25 billion more than their homes are worth.

Rand reiterated Woodstock’s call on the Federal Home Finance Authority to stop blocking Fannie Mae and Freddie Mac from writing down principals in mortgage modifications.

Paltry restitution

In contrast, a coalition of community groups said the settlement “let banks off the hook.”

“Our elected officials completely sold out the people again to their Wall Street friends,” said IIRON, a regional network including Northside POWER and Southsiders Organized for Unity and Liberation.

IIRON emphasized the paltry sums given in restitution to homeowners who lost their homes due to fraudulent foreclosure practices.  They stand to receive up to $2,000 each.

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Communities to banks: You can fix housing crisis, economy

Banks caused the housing crisis — and the financial crash which threw millions out of their jobs — and they can fix it, according to a new report.

By writing down underwater mortgages to market value – using a relatively small portion of bailout financing they’ve received – banks could put a floor on the housing market, stem spiraling foreclosures, and provide the economy with a badly-needed second stimulus, creating millions of jobs over the next decade, the New Bottom Line Campaign argues in a new analysis.

It was released in Chicago last week at a vacant home on the West Side that’s being rehabbed under a new program — which demonstrates how community pressure can force banks to step up and take responsibility, organizers say.

(And it came out the same day Mayor Rahm  Emanuel announced a foreclosure recovery program that includes not one single community on the hard-hit West Side.)

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