The Sword and the Shield

Boston's City Life/Vida Urbana is finding success by turning conventional wisdom on its head and entering the picture after a foreclosure has taken place.

The Sword, the Shield, and the Offer

One of the first things City Life/Vida Urbana did was to organize the Bank Tenant Association, a multicultural, multiethnic group of foreclosed owners and tenants in foreclosed properties. The BTA wields the sword part of the equation, which is CLVU’s tiered confrontational approach to blocking foreclosure sales and preventing banks from evicting foreclosed owners and tenants. Using foreclosure lists, CLVU staff and cadres of volunteers canvass homeowners in trouble and assess their situation and willingness to take action.

“Many people experience a feeling of shame in losing their home to foreclosure. Some don’t even tell their own family members,” observes Curdina Hill, executive director of CLVU. For CLVU organizers, one of their most significant tasks is to address this feeling of shame and isolation so that foreclosed owners can acknowledge their situation in a public setting and make a conscious decision to engage in collective action. “The Bank Tenant Association is a place where people find their voice and sense of power after hearing from and connecting with other people going through the same experience,” says Hill.

Upon joining the BTA, members take part in a range of interventions including auction protests, vigils, “block rebellions,” and eviction blockades. Block rebellions include actions such as occupying vacant buildings with community residents. At least one person who occupied a vacant foreclosed property has won the opportunity to buy the property. Other forms of protest include bank pickets, and un-rent strikes, where a group presses a bank to accept rent payments from tenants or foreclosed owners of a property. One bank function, a demonstration at Deutsche Bank’s annual golf tournament, gained local media attention and scored huge public relations victories for CLVU and the nascent BTA. As a result of this action, Deutsche issued a letter to their servicers urging them to pursue alternatives to eviction post-foreclosure. It was a defining moment for CLVU that served to coalesce the campaign.

The shield part of the equation suggests protection. In one sense this comes from the power of being part of a group rather than a lone agent or victim. But the shield also refers to legal protection. Lawyers from partner organizations such as Greater Boston Legal Services and Harvard Legal Services Bureau attend BTA meetings to discuss individual situations and alternatives in private meetings with members.

The centerpiece of The Sword and the Shield is the weekly BTA meeting, which now attracts upward of 100 people. Participants are invited to talk about their situation, in a sense to give testimony. Many of the participants at the meetings are people who have resolved their situations and attend to express their solidarity. The meetings have a flavor of movement politics and are animated by the spirit of revival, complete with slogans and songs.

For many homeowners in foreclosure situations, loan modifications without principal reduction are not practical because their homes have lost a significant share of their bubble-inflated values and are worth tens of thousands of dollars less than the mortgage amount. However, given the opportunity, many would jump at the chance to buy back their homes at current market value. The third element in the CLVU campaign, the Offer, is the result of an innovative partnership that the community development financial institution Boston Community Capital has forged with CLVU and other nonprofits, called SUN, or Sustainable Urban Neighborhoods. BCC buys the often-occupied foreclosed properties from banks at current or discounted prices. It can then sell the property back to the former owner and provide a mortgage loan at an affordable monthly payment.

Banks typically cite “moral hazard” in refusing to sell back to former owners. According to them, eliminating the consequences of foreclosure may change the behavior of current or future mortgage-holders for the worse. CLVU organizer Steve Meacham takes issue with this invocation of moral hazard. As he told Bill Moyers in a 2009 interview:

These are the same guys who have run our entire economy into the ground and who have been rewarded with billions in taxpayer bailouts and have used billions of that money to give bonuses to the very executives that drove their companies and the whole economy into the ground. And they are citing moral hazard as the reason why they can’t resell that property to the existing homeowners at the real value? That is hypocritical in the extreme.

Of course, the BCC solution can’t help everyone. Some former owners are unemployed or underemployed and can’t take out a mortgage with BCC or afford their houses even at current market value. In those cases, CLVU also will work with other organizations to find options for foreclosed owners and tenants and their properties, including conveyance to organizations like CDCs to develop co-housing and limited equity co-ops.

CLVU works with about 1,000 families in Boston and has expanded its efforts to selected cities throughout the state. Through the BCC collaboration, 60 families have bought or are in the process of buying back their homes. The BTA has carried out 30 eviction blockades. Thanks to these blockades, foreclosed homeowners and tenants in foreclosed properties have gained months, in some cases more than a year in their homes. If they have to move, they have negotiated dignified arrangements allowing them to move on their own time in a stable fashion. Also, backed by organizing leverage, tenants have negotiated settlements of at least $10,000 to move out rather than the $500 “cash for keys” that previous tenants had been forced to accept.

What’s more, the tenants that formed the base of the organization for decades are now joined by an ever-growing number of current and former homeowners.

1 COMMENT

  1. Melvyn Colon’s vivid description in “The Sword and the Shield” (12/14/11) of ordinary people trying to keep their small portion of the American dream is a powerful testament to perseverance.

    Colon’s article documents the adoption of a post foreclosure strategy that challenges the legal and financial forces who service financial institutions. The genius behind this approach is a three step strategy which engage the victims and ultimately the banks on moral and business terms. Why would local banks open themselves to further public scorn when they can simply sell the foreclosed property to a responsible financial intermediary who will then sell the property back to the former owner with an affordable mortgage?

    The several families mentioned by Colon developed a workout template by which eviction is prevented while incorporating common sense business practices.

    Sadly though, and despite State legislation that will further the work of City Life/Vida Urbana (CLVU), the effort still leaves thousands of families without the necessary support to prevent eviction. Both Federal and State regulatory agencies need to force financial intermediaries and servicing agents to implement a genuine plan that keeps homeowners in place.

    Colon concludes by celebrating the organizing and financial prowess of CLVU and Boston Community Capital as a model for impacted communities throughout the US.

    Indeed, this innovation should be replicated giving hope and a roadmap for protecting families and their communities

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