Mindless Evictions

By Alan White

As many speakers at last week's annual meeting of the National Community Reinvestment Coalition pointed out, banks are aggravating the blighting impact of foreclosures by mindlessly evicting tenants and former owners, even in markets where homes are not selling. In normal times, a lender that forecloses a home evicts the occupants, because single family homes are much easier to sell vacant than occupied. But these are not normal times. The excellent story by Alex Kotlowitz in the March 8 New York Times magazine takes the reader on a tour of the disastrous impact evictions are having on Cleveland and its neighborhoods.

HUD once had a program that permitted former tenants and occupants to remain in FHA's foreclosed homes, known as the "occupied conveyance" program. The logic was to allow a foreclosed home to remain occupied if sales were slow and vandalism or other vacancy costs were high. The banks now accumulating hundreds of thousands of foreclosed homes ("REO") have given little or no thought to the possibility that automatic eviction is dragging down their REO values along with the surrounding communities.

ACORN is organizing a campaign to fight back, and to encourage tenants and owners or former owners to stay in their homes, at least until a bona fide buyer is found by the foreclosing lender. A Miller-McCune mag. story reports on one homeowner who was offered a useless loan modification by Chase (increasing his payment) who is now refusing to leave. NCRC has called for a national day of action on June 11 to demand action to save homes, jobs and communities. This may be the germ of a grassroots movement that will pressure the Administration to stop nudging the mortgage servicing industry and to act boldly and decisively to end the laying waste to homes and neighborhoods (as candidate Obama promised he would do, with a 90-day foreclosure moratorium, on October 13, 2008 in Toledo). Courts may also begin to rethink the automatic granting of eviction writs for foreclosed homes, especially in areas of concentrated foreclosures and abandonment.

HT to Robert Strupp of the Baltimore Community Law Center (and NYT for its photo).