On Tuesday evening in Boynton Beach, Fla., underwater homeowners are gathering for happy hour at Ralph and Rosie's Restaurant, an independently owned bar and eatery involved in a dispute with the local town and being put up for auction at the end of the month. Ralph and Rosie will offer the homeowners free appetizers and soft drinks. In Portland, Ore., the meeting's at the Hopworks Urban Brewery. Denver homeowners will gather at the Village Inn on Colorado Avenue.
Los Angeles hasn't figured it out, while Austin is meeting at Texican Restaurant. New Yorkers are getting together at a Starbucks in SoHo. [UPDATE: Los Angeles now has a location. Scroll down for details.]
The gatherings are being self-organized by homeowners looking to meet others who have tried to work out modifications with their bank for their underwater mortgage. Groups big and small have gotten involved: ForeclosureHamlet.org organized the Ralph and Rosie's gathering, while the Service Employees International Union let a long list of their activists do the honors. Last week, HuffPost teamed up with MSNBC's Dylan Ratigan for a series of stories on the housing crisis, which spawned the Meetups, broken down by city here. Scroll down to see a slideshow of the MSNBC series.
Nearly a quarter of all mortgages are underwater and banks are increasingly worried that homeowners will walk away -- or, in the industry term, "strategically default." HuffPost spoke with nearly 50 people with underwater loans to find out what the emotional and financial consequences of strategic default had been for those who'd beaten that path.
"There should be support groups for people who have to deal with these banks," said Richmond Burton, 50, a soon-to-be-former resident of Long Island's East Hampton. "It can drive you crazy. I'm very good at dealing with pressure, and they made it feel like you're at their mercy." Burton will be at the SoHo gathering.
The industry is placing increasing attention on strategic defaulting. On Tuesday, Equifax announced that it had developed a unique method to measure under what circumstances homeowners would stop making mortgage payments, yet continue to pay other bills. Equifax finds, perhaps not surprisingly, that people with more expensive underwater homes are more likely to strategically default.
HuffPost did a series of pieces in conjunction with Ratigan, perusable below.
If you're interested in covering an event as a citizen journalist, want help getting one started, or have expertise to offer, email firstname.lastname@example.org.
Update: The L.A. gathering will be at the original farmers market. Writes one homeowner: "Let's meet in the West Patio near EB's Beer & Wine ... where they have the stage. We can find a few tables once we find each other. I'll have on a beige cap and jacket. (If you're running late and don't see us at the West Patio, look around the tables at the market for us, in case the West Patio didn't have enough space.) See you soon! "
CORRECTION: Due to a reporting error, the original version of this story said that a staffer for Sen. Jeff Merkley (D-Ore.) would be attending the Portland gathering. The senator's office had not confirmed attendance and is not able to send a staffer this evening.
HuffPost's Will Alden traveled to Vallejo, Calif., exploring the connection between the financial crisis and the housing collapse, while Ratigan sketched the history of the 30-year mortgage and interviewed a California mayor struggling with the new reality: The American real estate boom turned Vallejo, California -- previously known for little more than the freeway that runs through it -- into a hot property market in the San Francisco Bay Area. But when the home-building stopped, so did the flow of money into municipal coffers, sending the city into bankruptcy nearly three years ago. That was merely the beginning of sustained pain for Vallejo's municipal employees. As the community adjusts to a wrenching new budgetary reality, one no longer propelled by exploding property revenues, the burden has fallen on ordinary city workers. David de Alba, a 45-year-old mechanic who has worked for the city for eight years, typifies this process. Vallejo has slashed its budget to get its books in order, reducing its general fund payroll by more than 100 workers, or about 30 percent, since 2007. De Alba has seen his monthly pay drop by about $1,000. Last summer, after missing mortgage payments, he went into default. In November, he filed for personal bankruptcy. Financial troubles strained his marriage, and his wife left him, taking their teenage children with her. This month, the bank foreclosed on his house. He moved out last Friday, relinquishing his home of nearly two decades. He now plans to move to a trailer park. De Alba puts the blame for this descent squarely on the city. "They pretty much destroyed my life," de Alba says. "They put the whole burden on the working class guy." Like cities across the country, Vallejo has seen its revenues wither in the wake of the recession, prompting pay cuts for municipal employees. In one regard, Vallejo's experience is unusual -- municipal bankruptcy remains rare, as it brings negotiations with employees into court proceedings. But the negotiations themselves are now commonplace: As cities like Vallejo struggle to get their fiscal houses in order, they are often doing so at the expense of their middle-class workers.
Day two focused on the administration's failing mortgage modification program, highlighting the case of a Michigan family who likely would never have lost their home had they not enrolled in the program. Arthur Delaney, who cowrote the piece with Shahien Nasiripour, appeared on Ratigan's program, along with Sen. Jeff Merkley (D-Ore.) and the couple who is losing their home, Bea and Terry Garwood. After nine months of dutifully making lowered mortgage payments under the Obama administration's foreclosure-prevention program, Bea and Terry Garwood of Pinckney, Mich., are all set to move out. Despite the promise of relief, they are losing to foreclosure the two-story house that has been their family home since 1994. They say the administration's initiative has effectively pushed them out the door. The Garwoods are among nearly 800,000 American households that have managed to enroll in the program before failing to secure permanently lowered monthly payments. Their experience underscores why many housing experts and lawmakers have proclaimed the effort a failure. Though President Barack Obama promised it would help three to four million homeowners avoid foreclosure, only 522,000 had successfully secured so-called permanent loan modifications by the end of last year, according to the Treasury Department. More homeowners have actually been bounced from the program than have been helped, the data show.
Day three featured a piece by Chris Kirkham, reporting from Lawton, Okla., outside Fort Sill. The story looked at the industry that has grown up around military bases dedicated to, more or less, ripping soldiers off. Ratigan interviewed military victims of this predatory lending, as well as Ashwin Madia, chairman of VoteVets.org. In this landscape of high-interest, easy credit, Mike, a U.S. Army Private First Class from Kansas, began a downward spiral into debt -- one that has left him sleeping in his friend's garage, surviving on only $148 every month. Recently he was reprimanded for not getting his required military haircut. He just didn't have the money, he said. "I was actually debt-free my entire life, until I joined the Army," said Mike, who, like most soldiers at Fort Sill, spoke on the condition that he be identified only by first name because he is not allowed to speak to the media without clearance from superiors. When President Obama offers his State of the Union address Tuesday night, he plans to discuss the welfare of the nation's troops returning home from conflict overseas. But also of significant concern are the conditions facing American soldiers right here in the U.S. Most American military posts are encircled by an array of questionable lending operations that many consumer advocates describe as being predatory. The issue has received greater attention this month with the announcement that Holly Petraeus, wife of Army General and top Afghanistan commander David Petraeus, will lead a newly created division of the Consumer Financial Protection Bureau aimed at curbing such practices directed toward military service members.
For Thursday's segment, HuffPost interviewed nearly 50 homeowners who had either walked away from their underwater mortgage or are thinking of doing so. We worked with Meetup.com to organize gatherings of homeowners in similar situations. Most will take place Tuesday evening -- check here to see where the meeting in your community is. WASHINGTON -- Nearly 1 in every 4 U.S. homeowners with mortgages owe more on their home than it's worth. Once a month, those 10.8 million are faced with a question that cuts to the core of the American Dream and offers a confusing collision between a deep-seated sense of personal obligation and a cold, simple business calculation: Should I pay my mortgage? For decades, there was only one answer for most people: Of course I should keep paying, it's the right thing to do. Besides, the argument went, a home is a great investment. Today, in the wake of the most seismic housing collapse in the nation's history, that logic has increasingly been challenged by homeowners despondent about their lack of options. Although researchers find that some underwater borrowers who could continue paying their mortgages strategically default anyway, the vast majority continue to pay. Many homeowners, out of a combined sense of fear, shame, courage and morality, resist making what is otherwise a logical financial decision. Walking away from a home, however, is more than the sum of a few business decisions. For many homeowners, it's either an act of civic defiance against a system they no longer buy into or the end result of being shuffled around by institutions that don't help them solve their financial problems. While walking away is a frightening and dangerous step into the unknown, millions have beaten the path in the past few years. To find out what it's like to walk away, The Huffington Post asked readers who were considering making the move, or who had already done so, to write in and share their stories. That was in January 2010. A year later, we followed up with them to see how they reflected on the experience.
Wrapping up the week, Ratigan focused on why there have been no significant prosecutions of Wall Street traders, teeing off of a Shahien Nasiripour report. NEW YORK -- After the last major banking crisis, some two decades ago, roughly 3,800 bankers were prosecuted and sentenced to prison terms, by the Justice Department's count. Yet this time, some four years after the economy descended into the most punishing financial crisis since the Great Depression, the public still waits for the Obama administration to deliver a similar kind of justice. The 2007-'09 financial crisis was "avoidable," a bipartisan, congressionally-appointed panel concluded last week. Mortgage fraud "flourished" in the run up to the collapse. Securities fraud was apparently widespread. "Lenders made loans that they knew borrowers could not afford and that could cause massive losses to investors in mortgage securities," the Financial Crisis Inquiry Commission wrote in its report on the causes of the collapse. About $1 trillion worth of home loans made from 2005 to 2007 were "fraudulent," the commission said, citing testimony from experts. The Illinois Attorney General, Lisa Madigan, told the commission that she defined fraud to include lenders' "sale of unaffordable or structurally-unfair mortgage products to borrowers."
Throughout the week, financial analysts, lawmakers and HuffPost reporters joined Ratigan on his podcast, Radio Free Dylan -- conversations were had with Shahien Nasiripour, Zach Carter, Josh Rosner and Yves Smith, and Rep. Brad Miller (D-N.C.).