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The Courage to Put Yourself on the Line

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Demonstrators today are using their bodies to send a message to Eric Holder that it is time to stop shielding the big Wall Street banks from prosecution. Hundreds of homeowners who have been playing by the rules while the big banks have cheated them are risking arrest at the Department of Justice to make an unmistakable statement: it is about time for the government to side with poor and middle class folks who the bankers have screwed rather than those banks who have been cheating them.

The Campaign for a Fair Settlement and the Alliance for a Just Society put together devastating reports in April and May, the first of which points out that the administration has yet to prosecute a single major bank or top level executive for the widespread fraud leading to the system's collapse, while the most recent report discusses how much better the economy would be if the administration was forcing the big banks to actually help homeowners who had been hurt by the banks. From the report:

  • The foreclosure crisis continued to destroy wealth on a large scale in 2012: Three years after the reported end of the Great Recession, the foreclosure crisis continued to destroy wealth on a large scale in 2012, with $192.6 billion in wealth lost due to foreclosures across the U.S., an average of $1,679 in lost wealth per household for each of the country's 114.7 million households.
  • The most devastating impacts of the ongoing foreclosure crisis were in majority communities of color and racially diverse communities: ZIP codes with majority people of color populations saw 16 foreclosures per thousand households with an average of $2,200 in lost wealth per household. In sharp contrast, segregated White communities experienced only 10 foreclosures per thousand households and an average wealth loss of $1,300 per household.
  • More than 13 million homes are still underwater and at risk of foreclosure and more lost wealth: For reporting ZIP codes, there are at least 13.2 million underwater mortgages (when a homeowner owes more than the home is worth) on the books.1 The Congressional Budget Office estimates that 13 percent of underwater homeowners are already "seriously delinquent" on mortgage payments -- they are foreclosures-in-waiting.2 If action is not taken to prevent these mortgages from going into foreclosure, Americans stand to lose nearly221 billion in additional wealth from these mortgages alone.
  • A strategy of principal reduction would save money for homeowners, boost the economy, and create jobs: Principal reduction -- writing down underwater mortgages to current market values -- would create significant savings for underwater homeowners. It would also generate new economic activity and create jobs in local economies. Using 2012 data, a principal reduction program could produce average annual savings of $7,710 per underwater homeowner nationwide, boost the U.S. economy to the tune of101.7 billion, and create 1.5 million jobs.
  • Unemployment and underemployment contribute to the widening racial wealth divide.Median wealth ratios measure White wealth for every dollar of wealth for people of color. In 1995, the ratio of White to Black wealth was 7-to-1. In 2004, it was 11-to-1. By the reported end of the Great Recession 2009, it had ballooned to 19-to-1. For Latinos, the White-to-Hispanic wealth ratio was 7-to-1 in 2004. Five years later, it was 15-to-1. Wealth was lost across the board from the Great Recession, but significantly more so for people of color. From 2005 to 2009, White median net worth fell 16% to113,149. But net worth fell by 66% for Latinos to $18,359, and 53% for Blacks to 12,124.
  • Those are some serious stats, folks. The housing crisis hasn't gone away, and we still need to do real principal reduction to solve it.

    Even traditional media sources, which haven't always covered these issues, are starting to take a look at what is going on. Just this morning, the Washington Post wrote that the Big Banks have paid less than half of the settlement they owe to homeowners.

    When the settlements were announced, with great fanfare, government officials hailed them as the long-promised reckoning with the financial industry. Regulators found that some banks had saddled borrowers with unaffordable mortgages or assigned higher rates to minorities even when they qualified for a better deal. Some banks were accused of having employees "robo-sign" foreclosure documents without reading them or having proper documentation.

    Since the Obama administration hasn't been able to either provide homeowners with a fair settlement or prosecute bank executives for the fraud they have committed, and the big banks have failed to pay the embarrassing amounts of money they owe these homeowners in over 30 settlements, some homeowners and activists have decided use the "If you want something done right, do it yourself" approach to force the Big Banks' hand on paying fair settlements to struggling homeowners.

    Today, more than 500 activists touched directly by Wall Street's reckless business deals to right these wrongs will go to the Department of Justice and demand accountability from the Big Banks, and relief and restitution for the millions of Americans affected. These grassroots organizers will participate in a week of action called "Bring Justice to Justice," and will join each other, community leaders and faith leaders to fight for the homeowners still waiting for their fair settlement. All week long, these gutsy Americans will be risking jail time to make the point that while regular citizens will be prosecuted for seeking what's due them, the DOJ has yet to prosecute a single big bank executive for the fraud that caused the financial and housing collapse in the first place, and the vast majority of ripped-off homeowners have yet to even see any benefits from the settlement with the banks that was supposed to begin to redress people's wrongs. This demonstration is a great moment in the battle against the Too Big To Fail banks, and I hope the movement keeps building. Here's what demonstrators will be carrying with them and handing to police officers when they come to arrest them.