Blackstone and JPMorgan CEOs still under pressure over Trump
Blackstone and JPMorgan CEOs still under pressure over Trump
Trump's business advisory councils have been dissolved. But protestors aren't done yet with JPMorgan CEO Jamie Dimon...
Trump's business advisory councils have been dissolved. But protestors aren't done yet with JPMorgan CEO Jamie Dimon and Blackstone CEO Stephen Schwarzman.
Read the full article here.
Housing Rights Group Says HUD Program Helps Wall Street, Hurts Homeowners
Truthout - October 5, 2014, by Rebecca Burns - After learning that his home was in foreclosure in July 2013, James...
Truthout - October 5, 2014, by Rebecca Burns - After learning that his home was in foreclosure in July 2013, James Cheeseman received an even more unpleasant surprise when he showed up in court the following January. He was told that his mortgage loan had been sold by JP Morgan Chase and purchased by a company he had never heard of before - LVS Financial.
Cheeseman had already applied for a loan modification from Chase and says he was still awaiting a response when the loan sale occurred - a move that he and his attorney argue violates New York State foreclosure laws. Cheeseman says that the new servicer, BSI Financial, then required him to fill out a whole new loan modification application. In mid-September, he learned that he had been denied.
Though he is asking the court for another shot at a modification, this curveball has caused considerable distress for Cheeseman, 47, and his mother Constance, 75, who have resided in the New York home that they co-own for five years.
"I was shocked; I thought that [the resale of bundles of bad loans] was over," he says. "That's what got the country into trouble in the 2008 [mortgage crisis]. But lo and behold, it's still going on."
Legal advocates, however, say that significant abuses by servicers may already have taken place.
In fact, the Cheesemans and their attorney believe that the sale of their loan was part of a recently expanded federal program ostensibly intended to provide relief to homeowners on the brink of foreclosure. Though foreclosure rates have been falling nationwide, 2 million homeowners are still behind on their mortgages and headed for foreclosure and another 10 million are underwater on their mortgages and at risk of the same in the future. About half a million of those seriously delinquent loans are insured by the Federal Housing Administration (FHA), representing a drain on the agency's taxpayer-backed insurance fund.
In 2012, the FHA expanded a program to auction off pools of "nonperforming loans" - those on which homeowners are at least six months delinquent on their mortgage payments - to both for-profit and nonprofit bidders. To date, nearly 100,000 loans have been sold through the Distressed Asset Stabilization Program (DASP), bringing $8.8 billion into the FHA's coffers. The agency asserts that the program can also help reduce foreclosures, as private loan-buyers not hemmed in by the same restrictions as the government agency should be able to pursue a wider range of avenues to keep residents in their homes.
Perhaps the most troubling aspect of DASP is where loans sold through it are ending up. HUD's own data reveals that 98 percent of these loans were purchased by private investors.
But citing stories like Cheeseman's, some housing-rights organizations are telling a different story about DASP. They contest that the program has deepened the pain of homeowners and tenants by handing their fates over to hedge funds and investment groups that often have no interest in pursuing loan modifications or other options that would allow residents to remain in their homes. On September 9, community groups in more than 10 cities nationwide protested at local offices of the US Department of Housing and Urban Development (HUD), which oversees the FHA and DASP. Noting that, by HUD's own numbers, private investors - including private equity firms, hedge funds, specialty servicers and single-family rental companies - have won bids on close to 98 percent of all loans auctioned through DASP, many housing advocates are calling for a halt to the program until it can be overhauled.
Asked about criticisms of DASP, HUD told Truthout that it is exploring several changes to the program. But on September 30, the FHA proceeded with the sale of another pools of loans totaling $2.3 billion in unpaid principal balances.
The Devil's in the Details
HUD did not release data on DASP to the public until August, though housing advocates have for some time been requesting information on the program's outcomes. In its first report on DASP, HUD concluded that the loan-sales program has "met its intention" of mitigating losses to the FHA, thereby minimizing risks to taxpayers. The agency touts sales made through DASP as a way to stabilize its taxpayer-backed insurance fund, which, following losses of more than $50 billion on mortgages it insures, required a federal subsidy of $1.7 billion for the first time in its 80-year history. HUD projects that in the coming years, DASP and other loss-mitigation strategies will add $5 billion to the FHA's insurance fund.
"By selling homes to private equity giants and vulture capitalists, DASP is fueling the rise of the Wall Street landlord."
The report concludes that DASP may be beneficial for homeowners as well, citing the fact that, while about half of the loans sold had not yet been resolved, of those that had, 34 percent of homeowners were able to avoid foreclosure. In a statement provided to Truthout by HUD, FHA Commissioner Carol Galante said:
We consider the Distressed Assets Sales Program to be very successful in accomplishing what we intended it to do. This program not only achieves significant cost savings for FHA's insurance fund, but offers borrowers a final opportunity to avoid foreclosure, which they wouldn't otherwise have. The results speak for themselves. Based on our initial data, an encouraging share of families are now re-performing and others have achieved a graceful exit from an unsustainable mortgage. It's important to note that all these families would be foreclosed upon if not for this program, which, in one way or another, has offered many of these borrowers another path.
But community groups say that this characterization lumps together dramatically different outcomes for homeowners. A September report released by the community groups Right to the City Alliance and Center for Popular Democracy (CPD) notes that of loans that were counted as having avoided foreclosure, many had been sold to a third party or resulted in a short-sale. Though homeowners were able to avoid foreclosure in 34 percent of loans resolved to date, they were able to gain modifications or otherwise begin making payments again in just 10.9 percent of the resolved cases.
"What we want to see is people being able to stay in their homes. And this category of 'foreclosure avoidance' includes a lot of outcomes in which [they] were absolutely not able to stay in their homes," Connie Razza, CPD's director of strategic research and author of the report, titled "Vulture Capital Hits Home: How HUD is Helping Wall Street and Hurting Our Communities," told Truthout.
Homeowners Claim Abuses
That's not the only bone housing activists have to pick with the program. Only loans that are not eligible for standard FHA loss mitigation - those, that, for example, have failed to qualify for loan modifications or other measures - are supposed to be included in the program. But some legal and housing advocates believe that mortgage servicers, for whom a quick insurance payout may be more attractive than a lengthy foreclosure process, could be flouting this requirement.
"When speculators heat up the market for 'distressed mortgages' they make it harder for anyone who acquires them - whether for profit or nonprofit - to make win-win deals that preserve homeownership and stabilize communities."
For example, James Cheeseman says he was beginning a settlement conference with Chase Bank, a step required under New York law to determine whether a modification, short sale or other alternative agreement can be reached before a lender proceeds with foreclosure, when his attorney learned that his loan had been sold in January. Cheeseman says that he was never notified of the sale - instead, he says, his attorney noticed the change during the discovery phase of the settlement conference.
"Our suspicion is that once [Chase] found out that [the foreclosure] was going to be an extended process, they sold their note," says Cheeseman. "The've been hit with fines for shady practices in the past, but they’re still doing it. But HUD is a government agency - it's like we're paying for those shady practices."
James and Constance Cheeseman's house went into foreclosure in 2013 after James was laid off from his job as an auto claims examiner. He says that he and his mother fell victim to a loan-modification scam at the hands of the Templeton Group, against whom the New York District attorney recently filed a suit over such abuses. But the Cheesemans applied for another modification last year, hopeful that the result would be different, given that James had found work again, and they also had additional income through a renter. They believe that the loan's sale has restricted their options: After purchase by an investor, the Cheesemans' loan was no longer insured by the Federal Housing Administration (FHA), disqualifying them from the federal Home Affordable Modification Program (HAMP). BSI Financial, the loan's new servicer, is attempting to continue with the foreclosure.
Nonprofits have been unsuccessful in buying loans through DASP after being outbid by for-profit competitors.
Banks selling loans to the FHA for auction through DASP receive an insurance payout equal to the unpaid principal balance of the loan. Housing-policy advocates fear that this could create an incentive for mortgage servicers to cut through judicial red tape by simply selling loans to the FHA for auction through DASP. Another report, released in September by the progressive think-tank the Center for American Progress (CAP), notes that roughly 76 percent of the loans auctioned through DASP between 2013 and 2014 were sold off by Bank of America, JP Morgan Chase, or Wells Fargo - three banks that have become notorious for loan-servicing abuses.
"Servicers stand to make out very well from this program," says Sarah Edelman, a researcher at CAP and one of the authors of the report.
HUD tells Truthout that, in response to concerns from CAP and other housing advocates, it has recently changed the process through which it verifies that servicers have fully exhausted loss-mitigations options. Previously, servicers were permitted to self-report that they had completed all the mandatory steps, and HUD program officers conducted checks on a sample of the loans submitted for auction. In advance of the auction on September 30, according to HUD, program officers checked all loans and removed a small number for which loss mitigation records were unclear.
Legal advocates, however, say that significant abuses by servicers may already have taken place. In May, the National Fair Housing Alliance, together with several other consumer and legal-aid organizations, wrote a letter to Commissioner Galante to express concern with "significant servicer noncompliance with HUD loss mitigation protocol" and call for stronger protections for homeowners affected by DASP. The letter detailed several cases in which homeowners had already been accepted for FHA-HAMP modifications and were making trial payments when new servicers stepped in and said they were no longer honoring the modifications. In several cases, like the Cheesemans, homeowners say they received no notice that their loans had been sold.
Under current policy, community organizations that have a real interest in preserving affordable housing often get the least help in acquiring distressed properties.
Vicente and Guadalupe Salgado, residents of Chicago's Albany Park neighborhood, believe they may be one more such case. After the couple fell behind on their mortgage in 2011, they fell victim to a mortgage modification scam and entered foreclosure. Since then, they say that they have applied for FHA loan modifications several times and were awaiting a response in July 2014 when they were contacted by a new servicer, who told them that they had been denied. The Salgados say they were told that they could not apply again unless they could pay one-third of the remaining principle balance up front, which amounted to $22,000.
"If I had that much money, I'd just find a new place to live," says Guadalupe Salgado.
The Salgados were among the homeowners who protested at HUD offices nationwide to call for an end to the resale of FHA loans, and they are seeking a meeting with HUD to try and determine whether the loan was, in fact, sold through DASP.
HUD says that in cases where a loan has been sold through DASP erroneously, the agency is able to return the mortgage note to the original lender and reverse the insurance claim. However, the agency says that this has been discovered in post-sale reviews of records, rather than through complaints by borrowers, and has happened in a very small number of cases.
Rise of the Wall Street Landlord
Perhaps the most troubling aspect of DASP is where loans sold through it are ending up. HUD's own data reveals that 98 percent of these loans were purchased by private investors; just three investment and private-equity firms - Lone Star Funds, Bayview Asset Management, and Serene Investment Partners - won nearly half of all loans.
The market for distressed loans isn't the only asset class to emerge from the ashes of the foreclosure crisis. During the past two years, investors have bought up more than 200,000 mostly foreclosed homes. After scooping up properties at bargain-basement prices, groups such as Invitation Homes, a subsidiary of private-equity giant the Blackstone Group, have built a new industry specializing in the rental of single-family homes, and even begun securitizing tenants' rental payments to sell billions of dollars in "rent-backed securities,"a financial product similar to mortgage-backed securities that taps tenants' rent checks as an income stream for investors.
Critics of DASP worry that the program may, for some investors, amount to little more than another means of acquiring cheap rental properties. At least two DASP buyers also operate single-family-home rental firms. The Blackstone Group - which through its subsidiary Invitation Homes is now the largest owner of single-family homes nationwide - owns a controlling stake in Bayview Asset Management, which has won nearly 20,000 loans through DASP.
"By selling homes to private equity giants and vulture capitalists, DASP is fueling the rise of the Wall Street landlord," says Kevin Whelan, national campaign director of the National Home Defenders League, which helped coordinate the September protests against DASP.
There's another troubling trend associated with DASP: The accelerating sale of bad loans has helped give rise to a  "distressed-mortgage securities market." At least 11 buyers who have won loans through DASP have securitized some or all of the loans purchased through the program, and analysts estimate that investors will trade roughly $60 billion in distressed mortgage assets by the end of 2014, compared with just $25 billion in 2013, according to the report by the Right to the City Alliance and the Center for Popular Democracy. CPD's Razza also notes that firms that securitize distressed loans may be most likely to continue winning them in the future - according to her report, securities have enabled for-profits to bid 15 - 20 percent higher on loans than their competitors.
This trend is undermining DASP's ostensible goal of helping homeowners and "contributing to a new speculative housing bubble," says Whelan, noting that the price of distressed mortgages has been driven upward by investor demand. "When speculators heat up the market for "distressed mortgages" they make it harder for anyone who acquires them - whether for profit or non-profit - to make win-win deals that preserve homeownership and stabilize communities."Â
Community Groups Left Out
Indeed, though DASP was initially billed as a means of involving more community organizations with a solid track record in foreclosure prevention, nonprofit organizations have won just 2 percent of loans sold through the program, according to the Center for American Progress’ report.
HUD stresses that because all of the loans sold through the program were headed for foreclosure, DASP is a last shot for homeowners to achieve an alternative outcome. But Whelman says this amounts to a "beggars-can't-be-choosers" rationale that does not necessarily bear out. "HUD's own figures show that the vast majority of families whose loans are sold off to investors lose their homes, whether via foreclosures, short sales, or other mechanisms," he says. "But there are nonprofits that can buy these loans that have a track record of keeping more than half the families in deeply distressed loans in their homes."
Several such nonprofits have been unsuccessful in buying loans through DASP after being outbid by for-profit competitors. New Jersey Community Capital (NJCC), a community-development group, has successfully purchased loans in New Jersey and Florida through DASP's "Neighborhood Stabilization Outcome" (NSO) pools, which are area-specific and require that buyers achieve a set of goals that enhance community stability - including reperformance of a loan wherein a borrower is able to begin making payments again, or a property's rental to a borrower - in at least half of loans purchased.
In an email to Truthout, NJCC said that it had been able to modify 45 percent of the loans in owner-occupied homes, a rate much higher than the industry standard. Nevertheless, the organization has been unable to scale up its purchases through DASP - in June, it was outbid on an NSO pool of loans in New Jersey by a for-profit investor. Even in NSO pools, nonprofits have won just 12 percent of loans, but outcomes are slightly better, with nearly 25 percent of residents able to remain in their homes.
NJCC and other nonprofits are calling on HUD to enable the participation of more mission-driven nonprofits, including by expanding the NSO pools, which currently constitute just 20 percent of DASP sales, or creating nonprofit specific pools. "This could be a very effective program, if FHA can get loans in the hands of buyers who are committed to neighborhood stabilization - that's if," says CAP's Edelman.
In a statement provided by HUD, Galante said: "HUD is also exploring every option to increase nonprofit participation in our program, including allowing more time for these organizations to perform the necessary due diligence and to assemble sufficient capital." The agency also told Truthout that in an upcoming November DASP auction, it will offer more NSO pools, including several that are smaller and more geographically concentrated.Â
But other housing-rights organizations believe that even farther-reaching measures are needed. The Chicago-based Autonomous Center of Albany Park, which is working with Guadalupe and Vicente Salgado to help fight their foreclosure, also operates Casas del Pueblo, a 501(c)3 community land trust that holds titles to properties and believes that federal policy should require more banks and investors that profited from the mortgage crisis to donate properties to community organizations outright.
Donation to a land bank is one option that buyers of loans in NSO pools may take to fulfill their obligations to the program's requirements, and some banks have chosen to donate properties to nonprofits in small number to receive a tax write-off. But Antonio Gutierrez, housing coordinator at Casas del Pueblo, says that under current policy, community organizations that have a real interest in preserving affordable housing often get the least help in acquiring distressed properties. The land trust, for example, is currently in negotiations with Fannie Mae to purchase the home of a domestic violence survivor who went into foreclosure after her abusive husband left the home and has been fighting to remain in it for four years. Though DASP buyers can obtain properties at an average of between 40 and 60 percent of the remaining principal balance on a mortgage, Fannie Mae has asked Casas del Pueblo to pay the full market value of $250,000 to obtain their member's home, even though she had already made a decade of mortgage payments on her mortgage.
"The DASP program isn't really providing neighborhood stabilization, it's actually contributing to the displacement of existing communities" when investors buy loans with the intent of foreclosing on properties and finding higher-income renters, says Gutierrez. Even the loan modifications provided by commercial banks and investment groups may merely be "prolonging the process of foreclosure," Â he says. "If we want a permanent solution and true neighborhood stabilization," he says, "we need federal policies that say that principal reductions, buybacks and donations to community land trusts are not optional. They need to be priorities."
In the meantime, the Autonomous Center is part of a national coalition calling on HUD to halt DASP outright until it can be overhauled. The Center for Popular Democracy, the Home Defenders League and other housing organizations say they gathered 11,000 signatures on a petition calling for an end to sales through DASP, and are planning further protests if they don't receive a response. Among those watching HUD's next move are the Salgados, who believe their house could be auctioned later this year.
"I'm waiting and trying to investigate who owns the loan," says Guadalupe Salgado. "But this is my house, because I've fought for it."
Source
Amendment critics need to move beyond partisan spin
Amendment critics need to move beyond partisan spin
The N.C. Republican Party has endorsed all six amendments. The Democratic Party opposes all six. Cawley delivered his...
The N.C. Republican Party has endorsed all six amendments. The Democratic Party opposes all six. Cawley delivered his remarks during a news conference organized in connection with two left-of-center groups: Local Progress and Common Cause. One can guess which side those groups have chosen in the amendment debate.
Read the full article here.
Seattle Unanimously Passes an 'Amazon Tax' to Fund Affordable Housing
Seattle Unanimously Passes an 'Amazon Tax' to Fund Affordable Housing
Nearly 40 elected city officials from all corners of the U.S., including from metros bracing for Amazon HQ2 like Boston...
Nearly 40 elected city officials from all corners of the U.S., including from metros bracing for Amazon HQ2 like Boston, Chicago, Denver, Los Angeles, Miami, New York City, and Washington, D.C., signed an open letter on Monday urging Seattle City Council to stay the course and criticizing Amazon’s tactics during the head tax debate.” “This is particularly concerning to us given Amazon’s approach to the competition for HQ2, in which the company has promoted a bidding war of jurisdictions competing with each other to offer greater incentive packages,” the letter read. “If Amazon were serious about its support for strong affordable housing solutions, it would fully back this tax proposal and chip in to help address Seattle’s homelessness crisis. By threatening Seattle over this tax, Amazon is sending a message to all of our cities: We play by our own rules.”
Read the full article here.
The Perils of Ever-Changing Work Schedules Extend to Children’s Well-Being
Abercrombie & Fitch announced last week that it would stop requiring workers to be on call for shifts that could be...
Abercrombie & Fitch announced last week that it would stop requiring workers to be on call for shifts that could be canceled with little notice, making it the latest retailer to pull back from such scheduling practices.
Williams-Sonoma ended on-call shifts in the last several months, while Gap has scaled back the practice ahead of a study it has commissioned on scheduling. Last year, Starbucks announced that it was bringing more “stability and consistency” to its employees’ hours after an article in The New York Times highlighted the company’s habit of giving workers little advance notice on their schedules and requiring some to close and open stores in consecutive shifts, known as “clopening.”
Although the workers directly affected by unpredictable schedules are the most obvious winners, the biggest beneficiaries of a change in the practice could be their children.
A growing body of research suggests that children’s language and problem-solving skills may suffer as a result of their parents’ problematic schedules, and that they may be more likely than other children to smoke and drink when they are older.
“Young children and adolescents of parents working unpredictable schedules or outside standard daytime working hours are more likely to have inferior cognitive and behavioral outcomes,” the Economic Policy Institute, a liberal advocacy group, said last week in a report.
Last year, two Democratic representatives introduced the Schedules That Work Act, which would require employers to give workers more say about their hours and provide them with incentives to encourage more stable schedules.
“We are all talking about this today,” said Representative Rosa DeLauro, Democrat of Connecticut, who is one of the bill’s lead sponsors. “Five years ago, it was an issue people would have brushed to the corner.” The bill has 69 co-sponsors; two Democrats also introduced companion legislation in the Senate.
Among the needs that policy makers and activists working on the issue identify is finding stable, professional child care on a schedule that shifts from week to week.
“The arrangements families put together are usually ad hoc,” Ms. DeLauro said. “They have to rely on other family members, friends. If something breaks down in that chain, they have a problem.”
While all shifting schedules pose a challenge in this regard, on-call work may be unique in the way it complicates child care arrangements.
Kris Buchmann of Albuquerque worked a retail job at a local mall when her son, now 3 ½, was about 1 year old. She said she was frequently scheduled for on-call shifts that never materialized or that lasted less than an hour when they did.
“I still had to pay a babysitter,” said Ms. Buchmann, who is active in a New Mexico organizing group called Organizers in the Land of Enchantment, or OLÉ. “Sometimes I would have to go pick her up, take her back to my house because she didn’t have transportation, drive to work, get sent home, still have to pay her, and drive her home.”
When Ms. Buchmann demanded a more stable schedule, her employer refused, an experience that is not uncommon. After that, she left the job.
As practices like unpredictable scheduling have proliferated in recent years, fed by a shift toward lean staffing models made possible by sophisticated software, they have attracted public criticism.
In a nationwide New York Times/CBS News poll in May, 72 percent of Americans favored requiring chain stores to provide at least two weeks’ notice for any change in schedule, or else compensate workers with extra pay.
Regulators have also taken notice. In April, the office of the New York State attorney general sent letters to 13 retailers, questioning their use of on-call shifts. The letters, which were first reported by The Wall Street Journal, said retailers were providing workers with “too little time to make arrangements for family needs, let alone to find an alternative source of income to compensate for the lost pay.”
Several companies that received letters from the New York attorney general have denied that they use on-call scheduling for low-wage workers, or that it is common in their stores. Some retailers say that only a small fraction of their workers who have been on unpredictable schedules care for children.
“Very few of our store associates are working parents,” said Michael Scheiner, a spokesman for Abercrombie & Fitch, which was among the letter’s recipients.
But the problem appears to be widespread. A 2012 study of nonfood retail workers in New York City by Stephanie Luce of the City University of New York and by the Retail Action Project, a workers’ advocacy group, found that more than half of the surveyed workers who cared for others, like children or elderly family members, had to make themselves available for last-minute shifts.
Because the practice is relatively new, however, scholars must infer its likely impact from research over the last decade showing the effects on children of parents working nonstandard hours, including night shifts, that have been more common for years.
In one of the most respected studies, published in 2005 in the journal Child Development, Prof. Wen-Jui Han of New York University looked at children during their first three years of life, controlling for such demographic variables as their mothers’ income, education, and race and ethnicity.
Professor Han, who was then at Columbia University, found that children of mothers who worked nonstandard schedules performed lower on problem-solving, verbal comprehension and spoken language tests than children of mothers who worked traditional schedules. Part of the explanation, she concluded, was increased stress on the part of the parents.
“Parents try their best to attend to their children in a sensitive and warm manner, but the physical and emotional exhaustion from nonstandard schedules makes it difficult,” Professor Han said in an interview. “With young children, if they’re crying, asking for food, asking for something, it’s all about how you interact with them.”
Another key issue, she found, was access to quality child care. Children whose mothers worked nonstandard schedules during their first year of life were significantly less likely to be enrolled in professional day care centers throughout early childhood. This type of child care setting, she noted in the paper, tends to be associated with better cognitive development than informal arrangements like relying on extended family members, a frequent alternative.
As for adolescents, Professor Han and two colleagues published a second paper, in the journal Developmental Psychology in 2010, which said that the longer mothers worked odd hours, the more likely their children were to smoke, drink, act out and engage in sexual activity.
The specific effect of on-call work and other frequently changing schedules — as opposed to work hours that fall outside the traditional workday — is only beginning to be studied, but social scientists worry that it has similar implications for children.
In a study of female workers at a large clothing retailer published last year in the Industrial & Labor Relations Review, Julia R. Henly and Susan J. Lambert of the University of Chicago found that the unpredictability of the workers’ schedules was related to higher stress and difficulties juggling work and family demands.
While the study did not examine the way this affected children, Dr. Henly suggested that the challenges posed by unpredictable work hours could take a toll on children as well. She also predicted that mothers with constantly changing work schedules would be less likely to enroll their children in preschool and other high-quality child care facilities.
“Some amount of early childhood education is important,” she said. “But it’s impossible to take advantage of those opportunities if you have a schedule that doesn’t allow you to get your kid there.”
According to Carrie Gleason of the Center for Popular Democracy, a nonprofit organization that helps community groups organize, such complications may explain why there appear to be fewer parents who work on-call shifts.
“A lot of times we find that they don’t last very long,” she said. “It’s absolutely impossible for working parents to meet their responsibilities to their families and hold down a job at a company with on-call shifts.”
Still, even parents who don’t work on-call jobs often have little advance notice of their schedules. In many companies that officially promise to make schedules available in advance, Ms. Gleason said, “managers edit the schedule up until the hours someone is supposed to come in.”
Correction: August 14, 2015Â
Because of an editing error, an article on Thursday about the effects on children of their parents’ unpredictable work schedules misstated part of the name of a group in which Kris Buchmann, who left a retail job because of the difficulties in arranging child care, is active. It is Organizers in the Land of Enchantment, not Organizers in the Land of Enrichment.
Source:Â New York Times
N.J. ACLU, others sue federal agency in brewing eminent domain controversy
The Star-Ledger - December 5, 2013, by Eunice Lee - The American Civil Liberties Union of New Jersey and the Brooklyn-...
The Star-Ledger - December 5, 2013, by Eunice Lee - The American Civil Liberties Union of New Jersey and the Brooklyn-based Center for Popular Democracy filed suit today against the Federal Housing Finance Agency in a growing battle for towns seeking to use eminent domain to seize underwater mortgages.
Last month, Irvington's mayor announced plans to conduct a legal study of using eminent domain to help residents facing more than 1,700 homes foreclosures.
If town officials decide to proceed, Irvington would become the second town in the nation, after Richmond, Calif., to employ a tactic that's drawn fire from Wall Street, according to Executive Director Udi Ofer of the ACLU of New Jersey, which endorsed Irvington's announcement.
The 17-page suit, filed today in the U.S. District Court for the Northern District of California, demands that the FHFA disclose details about its relationship with banks and other financial institutions. The agency has threatened legal action against Richmond and other cities planning to use the eminent domain tactic and may deny credit to locals seeking mortgages, the suit says.
Corinne Russell, an FHFA spokeswoman, declined comment on the lawsuit saying the agency does not discuss pending legal matters.
The novel approach, dubbed as "friendly condemnations," allows municipalities to use the power of eminent domain to seize mortgages, rather than homes, where homeowners owe more than the current value of the house.
Using money from private investors, Ofer said towns would pay the mortgage holders' fair market value and then restructure mortgages into lower principal payments that are more favorable for homeowners. About 700 to 1,000 homes in Irvington could potentially benefit from eminent domain takeovers, according to Irvington Mayor Wayne Smith.
On Wednesday, Newark's city council voted unanimously for the city to conduct legal research and policy analysis as a step towards adopting the eminent domain strategy.
Filed under the Freedom of Information Act, which compels the government to provide copies of federal records, the lawsuit argues that the federal agency is trying to block municipalities from using eminent domain to prevent foreclosures. The FHFA regulates the mortgage giants Fannie Mae and Freddie Mac. The lending agencies control most mortgages in the U.S.
The suit says the FHFA never responded to an Oct. 1 FOIA request seeking information between the federal agency and members of the financial industry, including the Securities Industry and Financial Markets Association, American Securitization Forum, American Bankers Association and the Association of Institutional Investors.
The lack of response to the FOIA request prompted the lawsuit, which was filed by the Center for Popular Democracy and ACLU, as well as chapters in New Jersey and California. Those chapters filed on behalf of: New Jersey Communities United, New York Communities for Change, Alliance for Californians for Community Empowerment, the Housing and Economic Rights Advocates, Urban Revival Inc., The Colorado Foreclosure Resistance Coalition and the Home Defenders League.
The FOIA request also targets "correspondence, phone messages, emails, calendar entries, and notes or memoranda" between leaders of the Federal Housing and Finance Agency and representatives of several banks including Wells Fargo, Deustche Bank, Bank of America, Chase Citigroup and Ally Bank.
On July 31, the city of Richmond offered to purchase 624 underwater mortgages. In August, the suit says several banks filed suit against Richmond and the FHFA released a statement citing "serious concerns on the use of eminent domain to restructure existing financial contracts."
Also, the financial industry and powerful lobbying groups have "vigorously opposed" the use of eminent domain, according to the suit.
The suit says that publicly revealing "the priorities and opinions of high-ranking FHFA officials, and the nature and substance of their exchanges with the financial industry" is an urgent concern.
Other cities considering the use of eminent domain to address foreclosures include San Francisco, El Monte, Calif., Seattle and Yonkers, N.Y.
Source
Florence District One Candidate Questionnaire: Alexis D. Pipkins, Sr.
Florence District One Candidate Questionnaire: Alexis D. Pipkins, Sr.
The Morning News recently sent out a questionnaire to the candidates running for the Florence School District One Board...
The Morning News recently sent out a questionnaire to the candidates running for the Florence School District One Board of Trustees. Here are the answers from Alexis D. Pipkins, Sr. who is running for another term representing District 4; he faces one challenger.
1. What do you feel you have contributed during your current tenure on the board?
My background as a lifelong resident of the Florence Community, and working closely within the region has given me a clear sense of both the educational and economic issues and needs that we face. Over the past 15 years, as a member of the Florence School District 1 Board of Trustees, I have ensured that I have been knowledgeable of the issues, needs, and concerns of my constituents, and I have represented and I have been a voice even during turbulent of challenges. Further, I understand that leadership must be politically astute to represent the views and concerns of those you represent even though others may not agree, or do not care, and only want to advance their own agenda that is only best for “their community” and not all communities. I have attained the Level 6 on the SCSBA, which is the highest level for a school board member, and presently I serve as the President of the SC Caucus of Black School Board Members which provides dialogue on educational issues and concerns to address the full growth and development of Black and other minority children, and I am also affiliated with the National Local Progress Movement which focuses on progressive thought and insight for local officials
2. What are the issues that you think need to be addressed?
Student achievement, and recognizing the individuality and creativity of each student’s needs
Recognizing that the public schools are becoming more diverse
Equity in funding for all schools
Special Education
Technology infusion and integration for all students
Early Childhood
Career Clusters and Pathways- which is more opportunities for expansion of vocational and career center programs
Funding throughout the district
Special Education and meeting the diverse needs of students, to include the increase diagnosis of Autism
Impact of poverty, mental health, and other risk factors have on today’s learners
Lack of teachers
New and innovative approaches to teacher development and recruitment in order to develop and retain a diverse, qualified, and effective 21st Century pool of educators and staff
3. How have you sought to make changes in those areas?
By asking for items to be placed on the agenda, and engaging staff and others throughout the state and country on best practices and promising practices to ensure that we are utilizing the best program for all of our children. Also, researching the issues and knowing the national agenda. I have always committed myself to being engaged and welcoming to constituents and having a listening ear to see what the children are saying and feeling. As an educator and advocate for children and families, I always empathize and evaluate how I would feel when making decisions and question if policies or procedures that are guiding discussion or the direction of the Board are relevant today. I have demonstrated that my approach to knowing what the educational needs and issues are not based on perception or a one way train rail.
4. What specific program are you most proud of in FSD1 and why?
Small Learning Communities at our schools to decrease class sizes
Implementation of the Parents As Teachers Program to address 0-3, to provide parents with skills and supports to ensure that their children are ready to enter school
Montessori which provides learners the opportunity to be creative
Career and Technology which provides students the opportunity to enter the work place upon graduation
The work that was done by the previous Discipline Code Committees which has ensured the district recognized inequalities and unfair discipline practices and the underutilization and non-utilization of support services for students with complex needs and behaviors. This dialogue that I led was the foundation for the present Code of Conduct which will have to be assessed over the next few years to evaluate its effectiveness and impact on student learning and behavior.
Early College which provides students the opportunity to receive college credit and even an Associate Degree when they graduate from high school
Present dialogue on a Middle School Concept that has been talked about for years
5. How do you handle inquiries and complaints from the community?
I refer families to the Superintendent’s Office or to the appropriate office for support. I also follow-up with families and community that approach me to ensure that their complaints and inquires have been addressed. I also request items be placed on the agenda for discussion and action.
6. What do you think the role of the board is, in the district and in the community?
The board is responsible for establishing the Vision and Mission for the local school district, and ensuring that the Superintendent has the resources to implement the vision by having good policies and procedures, and good stewards of the district’s Operational Funds and Capital or Building Funds. This role must be student centered and family centered by recognizing the diverse needs of students within our community. Not all students learn in the same manner, thus the board must be aware of such and hold the administration accountable for creating programs and services which will help students achieve and be successful. It is the job of the board to be knowledgeable, and current on educational issues and trends, and not just be a “rubber stamping board” but ask questions, communicate with the public- and not just those who share your personal beliefs and positions.
7. What are your past/other areas of service? (church, civic organizations, etc.)
Professional:
I am an advocate, teacher, educator, trainer, and servant-leader. Presently, I am employed as the Executive Director of Lee County First Steps, and the Lee County Adult Education Family Literacy Coordinator.
Educational attainments include:
1990 graduate of the historic Wilson High School
Bachelor of Arts Degree in Political Science and a concentration in Secondary Education Graduate from Winthrop University
Master of Arts Degree in Management from Webster University
Education Specialist Degree Specialization in Leadership in Educational Administration from Capella University
Completion of the Non Profit Leadership Institute from Francis Marion University
Completion of the Francis Marion Rural Leadership Institute
Church:
My faith walk began at my home church, Snow Hill Baptist Church where I was active during my youth, and I was licensed to preach at Maxwell Baptist Church where I was Sunday School Teacher, Sunday School Superintendent, Minister of Christian Education and Membership Services, Boys Scout Troop Master. Presently I am a member and ordained Elder of the Gospel (2010) and serve as an Associate Minister and have served as a Youth Advisor at the Greater Gethsemane Apostolic Church in Florence, South Carolina.
Past and Present Civic:
Gate City Masonic Lodge 276
Florence 1 Local Education Association (SCEA) Treasurer, President
Weed and Seed Steering Committee
Queenie’s Helping Hands Ministry
Angel Tree Prison Ministry
The School Foundation Board
Pee Dee International Festival Planning Committee
PTA (North Vista Elementary, Williams Middle School)
PTSA (Wilson High School)
By Melissa Rollins
Source
New York Fed Names John Williams President, Bucking Calls for Diversity
New York Fed Names John Williams President, Bucking Calls for Diversity
Progressive groups seized on Mr. Dudley’s retirement as a rare opportunity to influence an economic policy appointment...
Progressive groups seized on Mr. Dudley’s retirement as a rare opportunity to influence an economic policy appointment that is outside Mr. Trump’s control. Protesters marched on the bank’s Lower Manhattan headquarters last month to demand a president who would represent working people. In a statement Tuesday, the Fed Up campaign, a progressive group, criticized the New York Fed’s board for “ignoring the demands of the public and choosing yet another white man whose record on Wall Street regulation and full employment raises serious questions.” The group said the search process “calls into question whether the Federal Reserve can be trusted to act in the public interest.
Read the full article here.
Fed Up With Being Shut Out of Federal Reserve, Activists Descend on Summit
Specifically, the coalition is warning against the very real prospect of higher interest rates, saying a rate hike...
Specifically, the coalition is warning against the very real prospect of higher interest rates, saying a rate hike would slow the economy and harm those for whom the so-called "recovery" has been weakest, including poor people, women, and communities of color.Instead, the coalition is calling on the Fed to ditch those plans and give vulnerable communities, including "tens of millions of Black Americans who are still struggling," a say in economic policy.Â
Fed officials have for months signaled an intent to raise short-term interest rates—which were slashed to zero in 2008 in an effort to spur spending and investment—as soon as this fall or winter. As the Washington Post reported Thursday, reported wage growth "combined with the strong hiring and a rapidly falling unemployment rate, gave the Fed hope that the economy would be able to withstand the first rate hike in nearly a decade by the end of the year."
But recent volatility in stock markets in the U.S. and globally, as well as internal policy disagreements, are leading some economic observers to predict that the Fed may now beless likely to set a rate hike at its September meeting.
Regardless, the Fed Up campaign—anchored at the Center for Popular Democracy and supported by 25 groups including the Economic Policy Institute, Demos, and the AFL-CIO—says raising interest rates would be foolhardy.
And they're in Wyoming to make that view known. According to the Huffington Post, "Fed Up's member organizations brought over 100 primarily low-income grassroots activists from across the country for the gathering. It's a dramatic increase from its inaugural visit to Jackson Hole last year, when the campaign brought a group of 10 activists."
As Sam Ross-Brown wrote at the American Prospect this month, "Fed Up's goal is a more 'pro-worker' Federal Reserve, and their first step is stopping the Fed from hiking interest rates before wages and employment have a chance to catch up with the recovery. Building on a similar action last year, the coalition began circulating a petition this week demanding the Fed keep rates low until wages and employment rise."
"There is no data supporting the Fed's push for higher interest rates," said Ady Barkan, campaign director for Fed Up. "While they toy with halting the recovery, there is a crisis of stagnant wages and a lack of good jobs."
According to Whose Recovery? A National Convening on Inequality, Race, and the Federal Reserve—the Fed Up Coalition's policy agenda for three days of teach-ins and workshops in Jackson Hole—a rate hike would slow down the economy so that there are fewer new jobs and workers have less power to negotiate raises.
"By raising interest rates, the Federal Reserve will make it more expensive for us to pay our credit card, student loan, car, and mortgage payments," the Fed Up campaign says. "That means we will have less money in our pockets to buy the goods and services we need. And that will have a terrible ripple effect throughout the economy: businesses will earn less revenue, so they will lay off workers (or avoid hiring new workers) and they won’t be able or willing to give workers any raises. With bad job prospects and stagnant wages, working families won’t earn enough to buy the goods and services they need, which starts the whole cycle again."
"If this sounds like a terrible idea," the coalition continues, "that's because it is."
The Fed Up perspective is supported by economist Joseph Stiglitz, who spoke alongside the grassroots activists at an event on Thursday. The same day, Stiglitz wrote in an LA Timesop-ed:
It is hard to see why the Fed would choose slower job and wage growth for most Americans just to protect against the theoretical risk of moderately higher inflation. But, then again, it's often hard to understand the Fed's policy choices, which tend to contribute to widening inequality in the United States.
Too often, after the end of one recession, the Fed, fearing inflation, has used monetary policy to dampen the economic expansion. Its maneuvers keep inflation low but unemployment higher than it otherwise would be, negatively affecting all workers, not just those out of a job. Workers in jobs face greater stresses, downward pressure on wages and diminished opportunities for upward career mobility. The costs of higher unemployment are borne disproportionately by people in lower-income jobs, who also tend to be disproportionately people of color and women.
Beyond the particulars of interest rates and inflation, however, the Fed Up Coalition iscalling for the central bank to facilitate more robust public engagement and greater transparency, given its position as "arguably the nation's most powerful economic actor."
"For far too long, our communities have been isolated from the Federal Reserve’s policy choices," the coalition writes in Whose Recovery? "Monetary policy has been left up to the bankers and the economists, with the public largely shut out and confounded by its seeming complexity."
Unsurprisingly, the document continues, "[t]he consequences of this disengagement have been profound. For the past 45 years, with only a few exceptions, the Federal Reserve has set policy that benefits banks and harms borrowers, helps employers and hurts workers, and privileges the voices and needs of corporate elites rather than those of America's working families."
Source:Â CommonDreams
The Federal Reserve's moral imperative
The Federal Reserve's moral imperative
The Federal Reserve is usually understood as the bankers' bank. But what if it was the people's bank? At the Fed's...
The Federal Reserve is usually understood as the bankers' bank. But what if it was the people's bank?
At the Fed's annual Jackson Hole conference last week, an assortment of community organizers, activists, labor organizations, and economists showed up to push America's most important financial institution towards putting the concerns of working and nonwhite Americans at the center of monetary policy. The group, called Fed Up, has met with Federal Reserve officials before, but Thursday's meeting was nonetheless unprecedented and striking — both for being on the record, and for the detailed, impassioned, occasionally heated, and remarkably pointed conversation that resulted.
Fed Up's complaints are several. The Fed is too worried about inflation, the activists say, and not worried enough about pushing the boundaries of maximum employment when it sets interest rates. They also argue the population of Fed officials is not diverse enough along racial, gender or class lines, and that the Fed itself could do with some institutional reform.
To a large extent, Fed officials agreed: "I'd be surprised if anyone in the Federal Reserve thinks we've done well on [diversity]," said New York Fed President William Dudley. "We're going to run this economy hot. Get unemployment down lower," added San Francisco Fed President John Williams. "So I don't think we disagree about that basic view."
And in Fed official's defense, some of this balancing is a judgment call. The Fed's inflation target is 2 percent, but since that is neither a ceiling nor a floor, officials must decide how far to overshoot that target and for how long in the name of spurring job growth. There is also generally a lag time between a change in interest rates and when it's felt in the economy. So Fed officials have to make educated guesses about when to drop rates to firm up a stumbling economy or raise them to get ahead of inflation.
Finally, Fed officials themselves can disagree over the full extent of their powers. That point was illustrated in Thursday's meeting when Boston Fed President Eric Rosengren and Fed Vice Chair Stanley Fischer disagreed over just what tools the Fed has to deal with asset bubbles. (Rosengren argued there were lots of tools while Fischer insisted there were few.)
The first complication here is that, even from a technical perspective, it's hard to see why the Fed is even contemplating another interest rate hike in December. Rod Adams, a neighborhood organizer from Minneapolis, noted in a particularly impassioned moment that there's essentially no indication that inflation is on the rise. Fed officials' own projections show inflation will just barely touch 2 percent through 2018. Josh Bivens, an economist at the Economic Policy Institute who joined Fed Up at Jackson Hole, argued that fully healing the damage from the Great Recession will require a prolonged period of overshooting the Fed's inflation target.
And in truth, none of the Fed officials at the meeting really debated any of these points. What did come up was the threat of asset bubbles and financial instability. "One of the ways that you get maximum employment is that you don't allow excesses to build up to the point that you actually have another recession, which hurts everybody in the room," Rosengren said.
This is where the unspoken moral problem of Fed policy really becomes inescapable. In very broad terms, the effects of lower interest rates and higher inflation tend to fall harder on the more fortunate members of society: retirees with savings portfolios, people with financial assets, those who work in the financial industry, and so on. Meanwhile, the effects of raising interest rates and slowing down jobs and wage growth tend to fall hardest on the least fortunate: Racial minorities, people with only a high school education, or people with prior criminal records.
At any given moment, unemployment for African-Americans is roughly double the national unemployment rate. But that gap tends to close during boom times and widen during downturns. "The economy has recovered for much of white America, but for black and Latino workers it has not," said Adams. "If you decide that we're at maximum employment now and you intentionally slow down the economy, you'll be leaving us behind, pulling up the ladder right after you've climbed it."
The brutal truth is that when the Fed slows down the economy by raising rates, it is throwing people out of work. And the people most likely to be thrown out of work first are those forced to the fringes of the labor market already by discrimination and other circumstances. So raising interest rates to fight financial instability essentially means black, Latino, and other underprivileged workers are the first to be thrown on the sacrificial alter to save us all from Wall Street's irrational exuberance.
This is partly why Fed Up is pushing for more racial and gender diversity among Fed officials, and to remove the financial industry from its privileged position among those officials. The idea is that the voices of those people the Fed will help or harm should all be equally heard in its deliberations. Fed officials may agree on running the economy hot for a while, but the lack of those voices may be hiding just how hot we need to run it.
There are practical policy changes the Fed could make as well. Bivens has released work on alternative tools the Fed could develop to pop bubbles without causing all that collateral damage: Higher capital requirements for banks, more use of its research powers and public relations to alert the markets to bubbles, and other ideas that already lie in the scope of the Fed's powers. Rosengren said the Fed should use all tools at its disposal to fight financial instability. But if Fed officials are looking for practical ways to build Fed Up's concerns more fully into its ways of doing business, it could start by developing those tools and explicitly rejecting interest rate hikes as a way to combat bubbles.
Another would be to adopt a higher inflation rate target like 3 percent or even 4 percent. If the effects of maximum employment take longer to reach marginalized communities, then the 2 percent target is driving the Fed to cut off job growth before those communities can ever heal.
It should be noted, as Fed Up activists did, that within the scope of its tools, the Fed has actually done a far better job maximizing jobs for marginalized Americans than Congress or the state governments. To some extent, the Fed is catching heat because these it's actually willing to listen to reason.
But it's long been said that societies are judged by how they treat their weakest and most vulnerable citizens — that the powerless have a uniquely powerful claim on our responsibilities. And Thursday reminded us that truism applies to the Fed too.
By Jeff Spross
Source
2 months ago
2 months ago