Members of SEIU and No One Leaves packed the Springfield City Hall to support the passage of a foreclosure ordinance that will raise the fee on banks from $100 to $10,000 for every foreclosure in the city and require banks to negotiate with owners through city-led mediation.
This could raise a million dollars for the city and prevent future foreclosures. The ordinances need a final enactment vote (expected in August), but got unanimous support last night — nothing like a packed gallery and the sweet taste of victory!
This is important. The banks are creatures of the law. They are only private business in a sense. Their accounts are protected by law and they have been given fast and favorable legal methods for foreclosure because in previous decades they had acted the role of responsible capitalism. Now that the banks have demonstrated they are unworthy of foreclosure favoritism, it is time to tighten the legal procedures and make them earn their money by legitimate means.
You may be tempted to argue that they have every right to foreclose on someone who has stopped payments on a home. That would be true if that is the only way they have been working it. But all over this nation, they have been using a somewhat different procedure. A home-buyer calls up and says he has trouble with paying this month’s mortgage. The bank kindly says, “Don’t pay it. Don’t make any payments for three months. That will qualify you for the HAMP program, and we can renegotiate the loan.”
The trusting home owner doesn’t pay for three months then resumes payments. He is stacked with penalty fees for late payments. Concerned, the home owner calls the bank. But the bank never seems to find the time to call him back. Eventually a letter is received saying that he has been denied admission to the government program and all payments including penalties are due now to avoid foreclosure. Then when the unfortunate client is unable to come up with the thousands of dollars in fees, they foreclose. I suspect the bank hands out a bonus and maybe a bottle of champagne per kill.
When the banks act in this manner, the legal procedures designed to protect their profits no longer make sense in a civilized society.