Campaign News

HUD has a program that sells tens of thousands of troubled mortgages across the country, many in black and Latino neighborhoods hard hit by the housing crisis, to Wall Street speculators - at a discount!  Please let that sink in.

Since 2010, the Department of Housing and Urban Development (HUD) has been auctioning off pools of very delinquent mortgages through a program they call Distressed Asset Sales Program, or DASP.  In most cases, the sales have gone to the highest bidder, which have been hedge funds and private equity firms.

Lone Star Fund, a private equity firm started by a Texas billionaire, and Bayview Asset Management, an affiliate of the private equity firm Blackstone Group, have been two of the primary beneficiaries of these sales. The result? Struggling homeowners lose their homes and speculators turn the properties into high-cost rentals that contribute to displacement in communities across the country.

This month, over 110,000 people from across the country signed a petition calling on HUD Secretary Julian Castro, to change this program. This comes on the heels of a March 1st letter to HUD from 45 members of Congress issuing a similar call for reforms to this mortgage sale program. In fact, for over two years, housing advocates and national policy groups have been pushing HUD to fix this program.

In an interview on WNYC Studio’s “The New York Radio Hour,” Secretary Castro referred to our protests that his program is enriching Wall Street as “sloganeering.” We wish that were the case. Unfortunately, it is simply a fact that 98% of the mortgages sold through HUD’s DASP program are going to Wall Street, one that can be verified on HUD’s own website where they post reports from these sales. Most, if not all, of these Wall Street buyers are what the industry itself calls “vulture capitalists” – investors that specialized in distressed assets in the hopes of making them more profitable and selling them for a profit.

In an effort to suggest that he has addressed the problem, Secretary Castro touts the agency’s 2015 auctions of troubled mortgages in which only non-profits were eligible to bid. Let’s be clear. Only 172 mortgages were sold to non-profits through these auctions, while a whopping 15,309 went to Wall Street investors in 2015. So yes, a gesture was made by the agency, but at such a miniscule scale he surely cannot suggest that the problem is solved.

There is no reason to sell such a high percentage of these loans to some of the same culprits responsible for the housing crisis in the first place. In fact, it seems to be in direct conflict with HUD’s mission to create strong, sustainable, inclusive communities and quality affordable homes for all. Call me skeptical, but I don’t trust a private equity firm like Blackstone – a company whose CEO made $734 million last year - to help fulfill that mission. Blackstone and other major speculators have a goal of making as much money as possible, and in the process are chipping away at the wealth and stability of neighborhoods in the process.

There is a viable alternative, that housing and civil rights groups across the country are calling for.  HUD should prioritize selling these loans to good actors that have a community-centered plan to save homes from foreclosure when possible and, when foreclosure cannot be avoided, to meet the affordable housing needs of the community with their property disposition plans.

A growing number of Community Development Financial Institutions (CDFIs) have programs to do just this, and have raised the capital needed to buy pools of these delinquent mortgages.  But so far, they haven’t been able to get their hands on the number of mortgages that they can afford. HUD should do all it can to make sure CDFIs and other good actors are prioritized for these sales.

I have seen too many people in my community lose their homes and their wealth to Wall Street speculators. We cannot allow the same policies that ravaged our communities to continue. For me the choice is very clear: will Secretary Castro make sure that HUD helps families stay in their homes, or will he allow HUD to continue to sign over these loans to Wall Street and fuel neighborhood displacement?

It’s time for HUD to make the right choice and partner with non-profit CDFIs and other organizations that will keep our neighborhoods together. I encourage everyone who cares about the stability of neighborhoods across the country to join with me in calling on Secretary Castro and HUD to change the DASP program so that it prioritizes foreclosure avoidance and the creation of affordable housing.

By Ana Maria Archila

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York Daily Record - November 4, 2014, by Rev. Aaron Willford, Sandra Thompson and Clovis Gallon - Over the past few months, something remarkable happened in York. Parents, teachers, students, neighbors and faith leaders united to send a clear message that the education of York's children is more important than the profit margin of an out-of-state charter operator.

On behalf of that community, we would like to thank the York City School Board for standing up for our students, making sure their education comes first, and rejecting a charter takeover of our schools.

When the school board met on Oct. 15, Chief Recovery Officer David Meckley pressured board members to vote on an incomplete, poorly researched charter plan that was rolled out less than a week before. With so little time to review the plan and so many unanswered questions about it, the community urged the board to cast a no vote.

Rejecting the charter plan was not an easy decision for the school board, but it was the right decision — and we applaud their courage. If the plan had been enacted, money that should support students in the classroom would have flowed to a for-profit management company instead. City school children would have been treated like guinea pigs in a radical experiment, and their parents would have lost any say in how their neighborhood schools are run.

Perhaps the school board was looking into a crystal ball when it cast that vote. Just a week later, a federal judge appointed a receiver for Mosaica Education Inc., one of the two charter companies initially in the running to take over York city's schools. The heavily indebted Mosaica was sued by its primary lender in September after defaulting on its debt.

Imagine where York's students would be if a charter operator took over their schools and, right out of the gate, found itself under enormous financial pressure for "a series of bad business decisions," as lender Tatonka Capital Corp. claims in its lawsuit against Mosaica.

The case against Mosaica followed a string of troubling studies questioning charter school oversight and accountability in Pennsylvania. A spring report from Auditor General Eugene DePasquale found that a lack of state oversight of charters was creating problems — with some observers comparing the current charter environment to the "wild, wild west."

A blistering report from the Center for Popular Democracy this fall revealed more than $30 million in proven or alleged fraud, waste, or abuse in Pennsylvania's charter school system over the past 17 years.

Giving Meckley a blank check on charterization in York would have been a big mistake.

Fortunately, the school board recognized how fraught with risk this plan was and chose to maintain local control of all the city's schools.

Now, it is critical for the school board to work in partnership with York's educators to improve the city's schools and give every child a shot at success.

Educators and administrators are already implementing a road map to fiscal recovery that will strengthen educational programs. We are glad that the school board is giving this "internal option," as it is known, an opportunity to work before taking any action that will negatively impact our schools, our students, or our community.

York city schools, like many other districts across the commonwealth, face a funding crisis created by deep cuts in state funding for public schools. All Pennsylvania school children deserve better from Harrisburg. It is high time our elected leaders reverse those cuts and put our schools back on track.

Until that happens, York's children should not be treated any differently than other Pennsylvania students. They shouldn't be guinea pigs in a charter experiment. And they shouldn't be deprived of the opportunity to attend their neighborhood schools.

Our school board agrees, and now it is up to all of us to take responsibility for the future of our city's public schools and the students who learn there.

We have no doubt that the York community is strongly committed to making our schools the best they can be. Working together, we can achieve truly remarkable things.

Rev. Aaron Willford is a member of York Concerned Clergy. Sandra Thompson is president of the York NAACP. Clovis Gallon is a teacher and York Education Association member.

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Over the past few years, two movements have exploded into the public’s consciousness. In the wake of Trayvon Martin’s murder and police killings of Eric Garner, Michael Brown, Tamir Rice, Sandra Bland and many other people of color, Black Lives Matter has emerged as a powerful set of voices calling for racial justice, including an end to racially motivated violence.

At the same time, a growing movement of low-wage workers demanding higher wages and paid sick time has led some corporations to improve their policies for workers, and to dozens of localities and states adopting minimum wage increases and paid sick days laws.

The next frontier in the fight for fair workplaces is job scheduling. Protests by retail and food workers, high-profile New York Times articles, and other subsequent media coverage of workers experiencing erratic, unpredictable schedules has led to public outcry, the introduction of federal legislation to improve work schedules, and more than a dozen state and local proposed laws.

There is considerable overlap between these issues and the activists that are at the center of both movements. As Ron Harris, an organizer at the Twin Cities-based group Neighborhoods Organizing for Change (NOC), explains, people “don’t live single-issue lives. … The people getting shot are low-wage folks. … They are over-policed and under-resourced.”

I spoke with Harris to learn how NOC is leading the fight for fair scheduling in Minneapolis by taking an approach grounded in a commitment to racial justice. The campaign demonstrates the possibilities that emerge when advocates connect the dots between job quality issues and racial justice in their strategy and messaging.

Tell me about your organization, Neighborhoods Organizing for Change (NOC)

NOC is a non-profit that focuses on work at the intersection of race, public policy and the economy. Our members are primarily low-wage Black folks living in north Minneapolis. Our mission is to shift the balance of power between folks who have and folks who don’t have, and in our opinion, the folks who don’t have are low-income black people in Minneapolis.

We derive a lot of our ideas about what issues we will work on from the bottom up. At monthly meetings called “issue cuts,” we discuss the issues and members vet the ones we will work on.

This past year we worked on a series of local future of work proposals, including fair scheduling, earned sick and safe time [time to deal with domestic or sexual violence], a policy to end rampant wage theft and raising the minimum wage to $15. We’re also working on police reform; we made a series of demands of our local police department, and in 2016 we will take those to the state level. We led the charge in repealing two laws that only two cities in the country have—“lurking laws” and “spitting laws.”

If you spit in Minneapolis, for instance, you can get a misdemeanor. These laws were targeting low-income black people, black men in particular. We beat that law in Minneapolis—now it is gone.  

We also work on voter restoration. There are approximately 47,000 people in Minnesota who don’t have the right to vote because of a past criminal conviction. We’re working on a bill at the state level to end that. And we’re working with the Center for Popular Democracy (CPD) on their Federal Reserve campaign, engaging with National Fed and Local Fed banks in town, working on influencing economic policy and who is elected to those boards.

How has NOC been involved with organizing and advocacy related to fair scheduling in the Twin Cities?

We got involved with fair scheduling because members of our base were coming in saying they were working jobs where they didn’t know their schedule until the day before or even the day of. They were forced to close businesses and come right back and open up the next morning. We call this “clopening.”

So we started to work with national partners, CPD included, to come up with a fair scheduling policy that mirrors work in other cities and states. Our state government is divided [between Republicans and Democrats], so we thought we’d take this to the city level.

NOC has been heavily involved in crafting the policy. This is where the “issue cut” came in. There were a series of generic provisions in the first scheduling policy and we laid these out for our membership and asked our membership base: “What do these sound like? Are they too strong? Too weak? What’s missing?” It led to a tailored approach that reflected the voices of the members.

On the field side, we gathered hundreds and hundreds of stories of people experiencing these scheduling issues. As we gathered their stories, we brought members to city hall and took them on lobbying visits.

Why is scheduling a racial justice issue?

If you think about the folks who are the most likely to have an unfair schedule and the least likely to be able do something about, at that intersection it tends to be people of color, particularly women of color.

If they don’t have access to a fair schedule, they are likely working a low-wage job, and if they are in a low-wage job, they likely have inadequate access to transportation… and you can see how there is a domino effect.

Why is it important to frame public discussions of fair scheduling in terms of racial justice?

We frame it as a racial justice issue because, living in Minneapolis, we have some of the worst economic disparity gaps in the country. With those dynamics, we almost had to frame it that way. We thought this could be an opportunity to close some of these gaps.

The thousand of stories we collected about employers hiring new people instead of giving out more hours to their current employees or getting schedules the day before people were supposed to work—all of those stories were coming from low-income communities of color, so frankly, that was the only way we could frame it.

We thought that our city leaders and elected officials would be sensitive to the opportunity to close the gap. In 2013, a majority of the city council was elected running on some kind of racial equity platform. So, our messages to the media and to elected officials were the same: “Hey, the folks that we donated to and endorsed ran on a racial equity platform and we haven’t seen any action from them for the past couple of years. We need this now. Here’s a perfect opportunity for you to close these gaps.”

We also tried to connect the dots, highlighting that the people most likely to suffer from [unfair schedules] are those with black and brown faces. Refusing to act means that you really don’t care about these gaps. It means, you ran on these things, but you’re really not committed to acting on them.

In your outreach to “high-road” employers, is it useful to discuss the connection between scheduling and racial inequity?

We’ve been working on really trying to engage people across sectors in fixing these gaps. So, for example, it’s not just the role of the community to advocate for itself and to bring awareness to this issue.  The business community has a role, too. We recognize employers’ value as job creators, but also emphasize that by changing some of their worksite practices, they can also be adding to the movement. 

We frame this for employers as: “Do the best you can where you are. We all have an opportunity. We all have a role.” And it really worked with some employers.

Even though the legislation wasn’t ultimately brought to vote, because of the campaign that we ran and the stories that were brought to light, some business owners are reporting that they are already changing their practices. Maybe they were giving their schedules five days in advance and now they’re going to work towards 10 days. One landscaping company used to say, you don’t leave until the job is done. Now they say if it is 6:00 P.M. and you aren’t done, just go home and be with your family.

Although we haven’t had much luck with large chain employers, one exception is Target. They have committed to changing their scheduling practices, almost in lockstep with what we have been pushing. We have talked about this as a racial justice issue with Target. We’ve said, as the largest employer in the city, they have a really unique opportunity to make an impact [on racial equity]. They also want their customers to have more money in their pockets—they need a strong economic environment, too.

The movement for racial justice has been gaining strength and momentum around the country in the wake of police killings. Within that movement, do you think there is enough attention to job quality and fair workplace issues?

Nationally, no. Locally, definitely. With NOC and Black Lives Matter, yes, we’re talking about police brutality, but also an overall culture of injustice that exists. In Minneapolis, in particular, some of the chants are we don’t want to get shot by police—but we also want a $15 minimum wage and all these other things.

The intersection of race and the economy has been really strong here. It’s a compounding effect where if you pay attention to the folks who are getting brutalized by the police, these aren’t middle class and rich folks. These are low-income black people. They are getting stopped because they are walking down the street when they are “not supposed to be,” technically. The people getting shot by police are low-wage folks—they are over-policed and under-resourced.

What could the fair scheduling movement be doing to further highlight the racial justice aspects of scheduling issues?

Really to ground the work in story telling. Make sure you have a strong base of individuals who are actually going through [unfair scheduling] who can speak from experience. No one can deny someone’s story. Stories help to justify everything you do.

Also, get the data. We gathered data that shows that the people who are most likely to work the jobs that have unfair schedules, they are black and brown, and most likely women. The data alone reflects that this is a racial justice issue.

Build a broad-based coalition, including people who understand how to do racial analysis and member based organizations, so the members can really speak for themselves.

How can scheduling advocates support the work of racial justice advocates?

If you think about it, if people are advocating for police reform, criminal justice reform, the people they are standing up for are people who are working these crappy jobs. So, fair scheduling advocates just need to stand up and say, our people are the same exact people. They don’t lead single-issue lives, they lead lives that are compounding multiple issues.

Wall Street Journal - July 14, 2014, by Alan Zibel - Citigroup’s $7 billion settlement with the Justice Department over the sale of flawed mortgage securities includes an agreement by the bank to provide $820 million worth of loan forgiveness and other assistance, plus nearly $300 million in refinancing. The money is also earmarked to help with down payments, donations to community groups and financing for rental housing.

These requirements, outlined in a 15-page appendix to the agreement, provide more specificity for consumer assistance than a $25 billion 2012 state/federal settlement with Citigroup and four other banks over mortgage-servicing problems. They also are more detailed than a November 2013 settlement with J.P. Morgan Chase & Co. over similar flawed mortgage securities sold to investors.

At a press conference in Washington on Monday, Associate Attorney General Tony West said the department aimed to improve on previous settlements by establishing an “an innovative consumer relief menu—one that not only includes the principal reductions and loan modifications we’ve built into previous resolutions, but also new, consumer-friendly measures.”

The Citigroup settlement, unlike previous pacts, directs the bank to provide half of its loan assistance to particularly hard-hit parts of the country. It also mandates that borrowers whose loan balances are cut won’t remain “underwater” —or owe more on their homes than their properties are worth.

The J.P. Morgan settlement addresses similar issues, but in a less targeted way. It gave the bank a bonus for providing aid to hard-hit areas, but set no specific requirement. In addition, the J.P. Morgan settlement encourages loan write-downs but does not specify how much of a borrower’s debt must be forgiven. The Citigroup settlement contains $180 million in financing for affordable rental housing—a provision not included in other settlements.

“This settlement is far more nuanced than previous settlements with respect to consumer relief,” said Andrew Jakabovics, senior director for policy development and research Enterprise Community Partners, a large affordable-housing nonprofit group.  The pact, he said, “reflects many of the best practices we’ve seen develop with respect to creating sustainable loan modifications.”

A Justice Department official said the consumer-assistance portion of the Citigroup settlement reflects refinements to the government’s thinking after previous settlements. In addition, the official said the smaller size of Citigroup’s mortgage-lending portfolio caused the government to consider additional avenues for relief because the bank had fewer loans to modify.

There has been tension between the Obama administration and liberal activist groups over efforts to resolve cases related to banks’ mortgage-crisis conduct.

Consumer groups have been unhappy with previous settlements of mortgage-related cases. For example, the 2012 mortgage-servicing settlement allowed banks to receive credit for short sales, in which a bank agrees to allow the sale of a property with a mortgage worth more than the home’s value, and for granting “deeds in lieu of foreclosure,” where a homeowner voluntary surrenders the home.

Some activists are still skeptical of the government’s settlements with the financial industry. Kevin Whelan, national campaign director for the Home Defenders League, an activist group representing homeowners, said there’s been no noticeable impact from last fall’s J.P. Morgan settlement.

“We haven’t seen any evidence that they’ve done anything at all,” Mr. Whelan said.

No statistics on the J.P. Morgan settlement have been released. A J.P. Morgan spokeswoman declined comment.

Joseph Smith, a former North Carolina banking regulator, is serving as the independent monitor overseeing the J.P. Morgan settlement and is expected to release a report on its progress in the coming weeks.

Thomas Perrelli, a former Justice Department official who helped broker the 2012 mortgage settlement, will serve as the monitor of the Citigroup agreement. Mr. Perrelli is now at the law firm Jenner & Block in Washington.

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