Film event reveals causes of foreclosure crisis, provides homeowners help and presents advocacy options

Foreclosure Response presents: American Casino
Celebration Cinema North, Knapps Corners
Thursday Feb. 4
• 6:30 – 7:00 p.m. Browse information from nonprofits, agencies and government officials. Staff will be on hand to answer questions.
• 7 – 8:40 p.m. American Casino.
Reserve free tickets at www.ForeclosureResponse.org.
• 8:30 – 9:30 Q&A/panel discussion about local efforts to stop the foreclosure crisis.

The film, American Casino, lays out how the mortgage industry turned the US into a casino that gambled away millions of American’s homes. Since 2004, 6,773 homes have been lost to foreclosure in the city of Grand Rapids alone. The rate of foreclosure is slowing some. In the past year (September 2008 – September 2009), 1,353 foreclosures went through. The decrease in foreclosures is due to federal and state of Michigan measures that have extended some protections to homeowners.

“Our foreclosure rates were lower than the previous two years,” says Kym Spring, spokesperson for Foreclosure Response. “Part of the reason is attributed to the outstanding job that our housing counselors have been doing. We passed a law in Michigan last July that mandates a 90 day mediation period between the homeowner or the housing counselor representing them. That has really helped as well.”

Spring notes that local housing counselors, such as those at Home Repair Services, have an outstanding success rate; 47% of the homeowners HRS has counseled have managed to hold on to their homes. What many homeowners do not realize, housing counseling is available to anyone in foreclosure, no matter what their income.

“If people are experiencing this financial strain, housing counseling can offer those that can’t stay in their homes a good choice of options,” Spring explains. “It can be very confusing. At least they can make an informed decision about next steps.”

The new Michigan regulations have provided more protections for those renting their homes, as well. A renter in good standing can stay in a foreclosed home. The new owner has to let them sign a new lease, unless the owner occupies the home. In that case, the renter can remain in the home for 90 days.

Screwed or laid off.

As the documentary will show, the majority of people are losing their homes through no fault of their own. They were hoodwinked into signing a mortgage that misled them about costs and payments. Or, they lost their homes as a result of losing their jobs. “ They got screwed or laid off,” Spring says. “The reality is loss of income or escalated mortgage payment. It was not in their control.”

The film also documents how people of color were targeted by subprime mortgages, no matter what their income level. Spring says that local statistics bear this out, showing that mortgage companies did indeed target African American and Hispanic families in the Grand Rapids area.

Spring notes that after targeting people of color, these lenders turned next to senior citizens. She predicts that a second wave of home foreclosures among this population in the coming months.

More citizen action needed.

Spring calls the companies behind the subprime mortgage scandal “Slime.” “They are going to continue to figure out ways to seed their greed unless we put in some serious stop gap measures and regulations. Reagan started the deregulation and Clinton put the nails in the coffin, in terms of talking away consumer protections.”

The State of Michigan passed legislation to help homeowners facing foreclosure only because constituents and groups like Foreclosure Response put pressure on their legislators. The measure passed in spite of intense lobbying by banks and lending institutions. Continuing grass roots citizen action is needed to enact more and better laws to protect not only those facing foreclosure, but also the neighborhoods where they live.

Foreclosures reduce property values, create blight and increase crime. “For all those reasons, it’s important that everyone in the community be exposed to this information and look at what they can do,” Spring says. Foreclosure Response will provide options for taking action on their Website in upcoming weeks. “You can also just help spread the word. If you have missed even one payment, get in to see a housing counselor. Beware of scams. Go to a nonprofit housing counseling service. They don’t charge and they don’t care what your income level is.”