Communities Lose When HUD Sells Loans to Wall Street
The Hill - October 2, 2014, Rachel Laforest & Keven Whelan -James Cheeseman and his mother, Constance, have lived in their Rosedale, New York home for the past five years. Like many Americans...
The Hill - October 2, 2014, Rachel Laforest & Keven Whelan -James Cheeseman and his mother, Constance, have lived in their Rosedale, New York home for the past five years. Like many Americans, they struggled during the recent economic downturn and have been trying to get a modification on their mortgage.
The bank that held their mortgage JPMorgan Chase, agreed to provide borrowers like them relief under a multi-billion dollar settlement with the Justice Department last year. But the Cheesemans' mortgage was insured by the Federal Housing Administration (FHA), part of the U.S. Department of Housing and Urban Development (HUD). And before they could work out a deal with Chase, the bank had the FHA sell their loan to a new investor as part of a program, called the Distressed Asset Stabilization Program or DASP.
The program is supposed to have a dual purpose. First, the federal agency hopes to be able to use the funds received by DASP to right the balance sheet of the Federal Housing Authority’s mortgage insurance program. Second, the program is intended to “encourage public/private partnership to stabilize neighborhoods and home values in critical markets.”
According to HUD’s own data and reports, DASP is meeting the first objective and failing miserably at the second. Almost all loans sold through the DASP program went to for-profit firms and only a tiny handful (around 3 percent) of families whose loans were sold ended up with deals that kept them in their homes.
For homeowners like the Cheesemans, that failure has real-life consequences. When HUD, through DASP, sold their mortgage to another servicer, the Cheesemans lost their protections under the FHA program mandating an effort to modify the mortgage. Their new servicer, BSI Financial, was under no requirement to consider a mortgage modification. BSI doesn’t even participate in HAMP, a post-bailout program for major banks that facilitates loan modifications to keep families in their homes. The result? The Cheesemans and thousands of other homeowners throughout the country are at serious risk of losing their home.
A recent report, Vulture Capital Hits Home: How HUD is Helping Wall Street and Hurting Our Communities, published by the Right to the City Alliance and Center for Popular Democracy cited serious problems with DASP. First, the current structure of most DASP auctions considers only the highest bid without weighting the bidder’s track record of good outcomes for homeowners and communities. Secondly, the groups found that the current outcome requirements and reporting structure fail to hold purchasers accountable. Third, the current pre-sale certification phase does not ensure that the FHA modification process has been followed.
Organizations called “Community Development Financial Institutions” with a track record of helping consumers stay in their homes stand ready to be a part of an improved version of this program. If a reformed DASP program incentivized it, investors with a social purpose could also make money by negotiating win-win, sustainable mortgage modifications with homeowners.
But community-friendly organizations can’t even get to the table with the auction overheated by well-heeled Wall Street firms and private equity “vulture capital” firms.
When the highest bidder places profits first, homeowners and neighborhoods come last. The result: more and more American homeowners losing their homes to unnecessary foreclosures and more and more corporate landlords leasing homes at rates few of these former homeowners, let alone anyone else, can afford.
All of this is the consequence of a program developed and managed by HUD, a federal agency with a stated mission to advance affordable housing and sustainable communities.
This week, HUD plans to sell off another 15,000 American homes to Wall Street investors. These are 15,000 families, 15,000 neighbors and 15,000 futures. Many if not all of these homeowners will lose their share of the American dream as a result of these auctions.
HUD can and should halt this week’s sale and must implement the necessary reforms that have been proposed by a range of community and advocacy groups.
As we consider the results of the economic collapse and what has been called by some a recovery, it is important to note once again that many neighborhoods, especially in communities of color, haven’t bounced back.
Too often our government has put the interests of Wall Street above the needs of struggling families. HUD can do better by fixing the “Distressed Assets” program now.
Laforest is executive director of the Right To The City Alliance, based in New York City. Whelan is National Campaign director of the Home Defenders League. He lives in Minneapolis.
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At Republican Retreat, Protest Power Was On Display As Progressives Eye Midterm Elections
At Republican Retreat, Protest Power Was On Display As Progressives Eye Midterm Elections
The protesters’ action at the Republican retreat was organized by the Center for Popular Democracy Action, in coordination with local affiliates.
...
The protesters’ action at the Republican retreat was organized by the Center for Popular Democracy Action, in coordination with local affiliates.
Read the full article here.
Bloomington Addiction Treatment Agenda Pushed by Group
“The vast majority of funding for Hoosier Action and its initiatives comes from its dues-paying membership,” Greene said. “Although we are a local partner of the Center for Popular Democracy, a...
“The vast majority of funding for Hoosier Action and its initiatives comes from its dues-paying membership,” Greene said. “Although we are a local partner of the Center for Popular Democracy, a national network that offers support.”
Read the full article here.
Neel Kashkari Named Next Minneapolis Fed President
Neel Kashkari, a former financier who managed the U.S. Treasury’s $700 billion rescue of banks in the 2008 crisis, was named the next president of the Federal Reserve Bank of Minneapolis.
...Neel Kashkari, a former financier who managed the U.S. Treasury’s $700 billion rescue of banks in the 2008 crisis, was named the next president of the Federal Reserve Bank of Minneapolis.
Kashkari’s resume includes stops at Goldman Sachs Group Inc. and Pacific Investment Management Co., and a failed run for governor of California last year. At the Treasury, he was Secretary Henry Paulson’s key aide in overseeing the Troubled Asset Relief Program, or TARP. Kashkari will take over from Narayana Kocherlakota on January 1, 2016, according to a statement Tuesday from the Minneapolis Fed.
“He has a little bit of all the pieces you’d want in a Fed president,” said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC in Stamford, Connecticut.
As head of one of 12 regional Fed banks, Kashkari will join the Federal Open Market Committee, the central bank’s policy making panel. The Fed is weighing ending a seven-year era of near-zero interest rates, with investors betting it will move next month. Kashkari is not scheduled to vote on policy decisions until 2017. Kocherlakota, as is customary for outgoing FOMC members, will not attend the December meeting.
QE ‘Morphine’
Kocherlakota is one of the Fed’s most dovish policy makers who has argued it should keep rates on hold into next year. Kashkari has offered observations on monetary policy via his twitter feed, without spelling out whether he would favor raising rates or delaying liftoff in the current climate. In an April 2013 comment he likened the Bank of Japan’s asset purchase program to “morphine. makes u feel better but doesn’t cure.”
“I don’t think we know that much” about Kashkari’s views on monetary policy, said Angel Ubide, a senior fellow at the Peterson Institute for International Economics in Washington. “My experience with people who get appointed is whatever they thought before and what they do later doesn’t necessarily correlate.”
Kashkari, 42, earned bachelor’s and master’s degrees in mechanical engineering at the University of Illinois at Urbana-Champaign, and an MBA from the University of Pennsylvania’s Wharton School. He began his career as an aerospace engineer at TRW Inc. in Redondo Beach, California.
Goldman Sachs
Kashkari’s appointment places another ex-Goldman Sachs banker at the helm of a regional Fed bank. Robert Steven Kaplan at the Dallas Fed and New York’s William C. Dudley are Goldman alums. Philadelphia Fed chief Patrick Harker previously served as a trustee at Goldman Sachs Trust and as a member of the board of managers of Goldman Sachs Hedge Fund Partners Registered Fund.
“We’re disappointed that yet another former Goldman Sachs insider has been elevated to a regional president position,” said Jordan Haedtler at the Center for Popular Democracy in Washington.
Such appointments need “more transparency and public input,” said Haedtler, who’s deputy campaign manager at Fed Up, a national coalition that’s calling for changes at the central bank and wants to keep rates low to boost employment.
Kashkari worked at Goldman in the early 2000s before accepting a post at the Treasury in 2006. He joined Pimco, then led by bond fund manager Bill Gross, in 2009 to help oversee an expansion into equities, an attempt to reduce the firm’s heavy dependence on the fixed-income market. When he left in 2013, the company’s equity unit had attracted $10 billion in assets, or less than 1 percent of the firm’s total assets at the time.
Bank Bailout
TARP, approved by Congress in October 2008, remains one of the more controversial measures taken during the financial crisis. It authorized the government to purchase up to $700 billion in troubled assets from financial institutions, in an effort to bolster global credit markets. The government ultimately used $475 billion, including $250 billion to stabilize banks, $82 billion to bail out auto makers and $70 billion to save insurer American International Group Inc., according to the Treasury’s website.
“Mr. Kashkari is an influential leader whose combined experience in the public and private sectors makes him the ideal candidate to head the Minneapolis Fed,” said MayKao Hang, incoming chair of the Minneapolis Fed’s board of directors and co-chair of the search committee.
Kashkari, a Republican, was defeated by incumbent California Governor Jerry Brown in November 2014, getting 43 percent of the vote to Brown’s 57 percent.
Presidents of the 12 regional Fed banks are appointed by a portion of their respective boards of directors, subject to the approval of the Fed Board in Washington. Reserve bank boards typically consist of nine members, including three bankers. The banking members are excluded under Dodd-Frank from participating in the selection of presidents.
Source: Bloomberg Business
Gov. Cuomo Signs New Legislation Making it Easier for Workers and the State Labor Department to Fight Wage Theft
New York Daily News - January 4, 2014, by Albor Ruiz - It feels good to be able to write about something positive for New York workers in my first column of 2015. After all, measures that benefit...
New York Daily News - January 4, 2014, by Albor Ruiz - It feels good to be able to write about something positive for New York workers in my first column of 2015. After all, measures that benefit them and rein in abuses by their bosses are as rare as snow in August.
It took a long time but on Monday Gov. Cuomo gave a last-minute Christmas gift to hundreds of thousands of low-wage laborers across the state by signing legislation making it easier for workers and the state Department of Labor to fight wage theft, which in New York has been an epidemic for many years.
“I am tired of waiting,” said Marcos Lino, who filed a complaint with the Department of Labor in 2008 after enduring four years of being shortchanged by his boss in a small Flushing grocery store. Six years have passed and his case is still unresolved.
Hopefully now Lino — and thousands more who, like him, have waited far too long to recover what is rightfully theirs — will finally get some justice.
“The groundbreaking legislation signed today will protect both workers from abuse, and law-abiding businesses from being undercut by employers who turn a profit by breaking the law,” said Andrew Friedman, co-executive director of the Center for Popular Democracy.
It should also help reduce the backlog at the Department of Labor.
The legislation, sponsored by Bronx Democratic Leader and now Assembly Labor chair Carl Heastie and state Sen. Diane Savino, improves on the landmark Wage Theft Prevention Act (WTPA), also sponsored by them and signed in 2010 by then-Gov. Paterson. The WTPA strengthened penalties for wage theft and protections for workers who report it.
“Mugging employees out of pay not only hurts families, it hurts communities. It makes honest employers less competitive,” Savino said when the WTPA was signed into law . “Businesses that are good citizens and pay their employees exactly what is owed them and on time, as is required by law, should not be at a disadvantage to companies that are illegally withholding wages from their workers.”
The New York Coalition to End Wage Theft supports the new legislation, which also has the backing of labor, community and religious groups, and law-abiding employers. It improves on retaliation protection for workers, transparency provisions to help advocates and workers identify cases of wage theft and helps facilitate wage theft policing.
But as Deborah Axt, co-executive director of Make The Road New York, warns, the new law is no panacea.
“Much remains to be done,” she said, “to eliminate the scourge of wage theft that still victimizes working families and responsible businesses alike.”
Source
New Report: Raise Chicago
Raise Chicago
Increase the wellbeing of workers, their neighborhoods, and Chicago’s economy
A Report by the Center for Popular Democracy and Raise Chicago
...
A Report by the Center for Popular Democracy and Raise Chicago
Click here to download the report.
Introduction
The recession appears to be safely in the rearview mirror for corporations, whose profits and stock prices have rebounded. However, the jobs recovery has been fueled by the proliferation of jobs paying low wages. An earlier study by Action Now and Stand Up! Chicago found that low-wage jobs made up 21% of all jobs lost during the Great Recession, while constituting 58% of jobs created during the recovery.[i]
This trend has exacerbated already increasing wealth and income inequalities in the US[ii] and Chicago. In 2012, Chicago had the 8th highest level of inequality by some measures.[iii] Economists suggest that too much inequality may threaten not only economic growth but economic stability as well, in part because inequality slows consumption for most people.[iv]
On March 18, 2014 Chicago voters voted overwhelmingly – by 86% – to support a referendum raise the minimum wage to $15 for Chicago workers at firms with $50 million in annual receipts and their subsidiaries and franchisees. This initiative allows Chicago to enable workers to get a toehold on the rockface to the middle class, rather than wait on state and federal government action. It offers the opportunity for the city to stimulate and strengthen its economy in the near term. It promises to enable individuals to invest more deeply in themselves, their families, and their communities.
In this paper, we find that the targeted $15 minimum wage will:
Increase wages: $1,472 million in new gross wages Stimulate Chicago’s economy: $616 million in new economic activity and 5,350 new jobs Increase city revenues: Almost $45 million in new sales tax revenues Decrease labor turnover: as much as 80% less annual turnover Modestly increase consumer prices: 2% price hikes at covered firms and franchisesIn accordance with the principles of a well-tuned, consumer-driven local economy, this proposed measure would enable Chicago’s economy to perform better while increasing opportunity and wellbeing for more of the city’s low-wage residents.
Download the full report here.
[i] Action Now and Stand Up! Chicago, “A Case for $15: A Low Wage Work Crisis,” 2012.
[ii] Associated Press, “Top 1% Took Record Share of US Income Last Year,” 2013.
[iii] Alan Berube, “All Cities Are Not Created Unequal,” 2014.
[iv] Jonathan Rauch, “Inequality and Its Perils,” National Journal, 2012.
This report, uploaded on 5/30/14, contains a small correction from an earlier version.
Martin Luther King, institutions and power
Jared Bernstein, a former chief economist to Vice President Biden, is a senior fellow at the Center on Budget and Policy Priorities and author of the new book 'The Reconnection Agenda: Reuniting...
Jared Bernstein, a former chief economist to Vice President Biden, is a senior fellow at the Center on Budget and Policy Priorities and author of the new book 'The Reconnection Agenda: Reuniting Growth and Prosperity.'
The Rev. Martin Luther King Jr. gestures during a speech at a Chicago Freedom Movement rally at Soldier Field in Chicago on July 10, 1966. (Afro American Newspapers/Gado/Getty Images)
When the Rev. Martin Luther King Jr. was assassinated in 1968, he was in Memphis, supporting striking sanitation workers. By that time in his crusade for racial justice, he had elevated full employment to a key plank in his platform. The full name of the March on Washington was the March on Washington for Jobs and Freedom. A common placard held up that day read, “Civil Rights Plus Full Employment Equals Freedom,” a powerful economic equation indeed.
In my experience, too few people remember this aspect of King’s movement, instead emphasizing his stirring spiritual commitment to racial inclusion. But King was of course thoroughly versed in the reality of the institutional barriers blocking blacks and his unique genius was to combine deep spiritual awareness with an equally deep understanding of the role of power in economic outcomes. That’s one reason he was in Memphis, supporting the union.
In 1967, King called for “a radical redistribution of economic and political power.” He particularly understood the power, for better or worse, of American institutions, most notably of course, the institution of racism, which so successfully blocked African Americans from decent homes, jobs, schools and opportunities.
But countervailing institutions existed within his vision as well, including the church and the union, and, if it could be forced to live up to its promise, the government. Even the institutions of the consumer economy and the job market could, with the right force and strategy, including boycotts that flexed black consumer muscle and equal opportunity laws, be nudged in the direction of racial justice.
To some readers, this “institutional” framework may be confusing. What do I mean by referencing the consumer or job markets or racism or unions, as “institutions”? This certainly doesn’t square with the classic economic explanation of how the economy works: profit-maximizing individuals achieving optimal social welfare by each individual pursuing their goals.
The institutional framework, with its emphasis on historical, legal and cultural practices (norms) embedded in economic systems, stands in stark contrast to the market forces framework. Surely no one could question whether the legal system or the housing market black people faced in King’s time, not to mention our own, promoted objective, blind justice. Discrimination in schools, the economy, and almost every other walk of life could not and cannot possibly be viewed as a fair or merit-based system.
Honoring King’s vision and legacy thus requires not simply remembering his most well-known dream: a racially inclusive society very different from the one that existed in his, or sadly, our own time. It requires recognizing the need to redistribute the power from the oppressive, exclusionary institutions, many of the same ones — housing, schools, criminal justice, the economy — he fought for until the day he was taken from us.
What does honoring that vision mean today?
Although I certainly don’t advocate giving up on President-elect Donald Trump’s administration before it has started, all signs suggest that it and the Republican-led Congress will hurt, not help, the economically less advantaged. Republican budgets threaten to undermine the safety net, Trump’s proposed tax policy squanders fiscal resources on tax cuts for the rich, undermining opportunities for those stuck in places without adequate educational or employment opportunities. There’s talk among Republicans of trying to get more states to pass “right to work” laws that undermine unions and cut workers’ pay. Listening to Ben Carson’s hearing for secretary of housing and urban development quickly disabuses one of hope that he’ll tackle the legacy of segregated housing that remains a serious problem. As far as reforming the institutionalized racism the remains embedded in our criminal justice and policing systems, again, it’s awfully hard to be hopeful.
There are, however, many levels of institutional norms, laws and practices. The Fight for Fifteen has been immensely successful in raising minimum wages at the state and sub-state levels. I can’t prove this, but I’d bet that without Black Lives Matter, there would be no “blistering report” from the Justice Department on the racial practices of the Chicago Police Department. The activist group “Fed Up” has had great success elevating the issue of economic justice as regards Federal Reserve policy, a policy area that even liberal presidents have avoided getting into.
As I recently wrote regarding “ban the box,” a policy designed to give job-seekers with criminal records a fairer shot at employment:
Nineteen states and over 100 cities and counties have already taken similar action for government employees, and seven states (Hawaii, Illinois, Massachusetts, Minnesota, New Jersey, Oregon and Rhode Island) plus Washington, DC and 26 cities and counties have extended ban the box policies to cover private employers. Some private businesses, including Walmart, Koch Industries, Target, Starbucks, Home Depot, and Bed, Bath & Beyond, have also adopted these policies on their own.
This last part about the private businesses is instructive. The Selma bus boycott was, of course, in no small part an economic action: Black people would not pay for discrimination. Regarding full employment, King realized that at high levels of unemployment, it’s costless to discriminate against a significant swath of potential workers. But when the job market tightens up, discriminating against a needed worker means leaving profit on the table.
Especially in the age of Trump, when so many Americans feel as if representative democracy is seriously on the ropes, it seems a no-brainer to channel King and once again tap the power of boycotts and leaning on businesses to do the right thing. It makes no sense at all to cede this field to Trump as he nonsensically claims (and gets) credit for job creation that already was happening.
My intuition is that many businesses, as in the ban-the-box example, would be willing to help push back on the institutional injustices that persist. Higher and more equal pay scales, implementation of the updated, higher overtime threshold that was wrongly blocked by a Texas judge (in fact, many businesses, to their credit, have gone ahead with this change), not blocking collective bargaining if their workers want to exercise that right, flexible scheduling policies that help parents balance work and family — there’s no reason for progressives not to fight for these ideas at the sub-national level and the private sector.
Although these sub-national fights are more likely where the action is for the next few years, meaningful action is developing at the national level as well. King would have easily recognized the Trump phenomenon as the work of exclusive institutions once again grabbing the power and would have organized accordingly and effectively. As we speak, many of us are trying to block the repeal of health-care reform in this spirit. The Indivisible Movement and the Women’s March would also have been highly familiar to Dr. King.
But on whatever level or in whatever sector the fight takes place, as we celebrate King’s indelible contributions, let us recall his understanding of power, the institutions that power supported and his admonitions to us not to rest until much more of that power lies in the hands of those who still command far too little of it.
By Jared Bernstein
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Groups launch 'people's filibuster' against GOP health bill
More than a dozen groups opposing the Senate GOP's healthcare bill will hold a "people's filibuster" for two days on the lawn of the Capitol.
Activists and Democratic lawmakers will speak...
More than a dozen groups opposing the Senate GOP's healthcare bill will hold a "people's filibuster" for two days on the lawn of the Capitol.
Activists and Democratic lawmakers will speak out against the ObamaCare repeal bill Monday and Tuesday and possibly later in the week.
Read the full article here.
How Can We Combat Wage Theft And Protect Immigrant Workers?
Every year, millions of workers suffer from wage theft when employers or companies do not pay them what they are owed.
...
Every year, millions of workers suffer from wage theft when employers or companies do not pay them what they are owed.
Read the full article here.
Death Cab for Cutie Kick Off Anti-Trump Campaign ’30 Days, 30 Songs’
Death Cab for Cutie Kick Off Anti-Trump Campaign ’30 Days, 30 Songs’
A group of musicians will be using their music to help convince voters not to support Donald Trump. Titled “30 Days, 30 Songs,” the project will release one track each day between now and the...
A group of musicians will be using their music to help convince voters not to support Donald Trump. Titled “30 Days, 30 Songs,” the project will release one track each day between now and the election in the hopes of creating a “Trump-Free America.”
Related: Roger Waters Trashes Donald Trump at Desert Trip Festival
Death Cab for Cutie begins the project today (Oct 10) with the original track “Million Dollar Loan.”
Ben Gibbard said of the song, “Lyrically, ‘Million Dollar Loan’ deals with a particularly tone deaf moment in Donald Trump’s ascent to the Republican nomination. While campaigning in New Hampshire last year, he attempted to cast himself as a self-made man by claiming he built his fortune with just a ‘small loan of a million dollars’ from his father. Not only has this statement been proven to be wildly untrue, he was so flippant about it. It truly disgusted me. Donald Trump has repeatedly demonstrated that he is unworthy of the honor and responsibility of being President of the United States of America, and in no way, shape or form represents what this country truly stands for. He is beneath us.”
This week, Jim James, Aimee Mann, Thao Nguyen, clipping., and Bhi Bhiman will all share songs, and R.E.M. will premiere a never-before-heard track. New songs will be available every day at 9am PST on Spotify, and will appear 24 hours later on Apple Music.
Fans can also purchase individual songs with proceeds benefitting Center for Popular Democracy (CDP), which aims for Universal Voter Registration.
By Amanda Wicks
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2 months ago
2 months ago