Don’t blame the victims of the foreclosure crisis
In 2004 there were 13 foreclosures in Plumas County. In 2012 there were 294 foreclosures in Plumas County. Property values and tax revenues are still going down, meaning less money for schools and county services: teachers laid off, one-third of the county employees laid off or gone, no visitors bureau, library hours cut, the list keeps growing. As long as foreclosures continue all these things will get worse and our local economy will continue to suffer: restaurants and stores will close and more people will have to move away to get jobs.
The county is not powerless over this. The Board of Supervisors can pass a moratorium on fraudulent foreclosures. Supervisors can tell the sheriff not to evict people who are the subject of a fraudulent foreclosure. They can pass a resolution authorizing the county clerk-recorder’s office to refuse to issue a Notice of Default if the bank can’t prove it actually holds the mortgage — more than half cannot.
The Plumas County economy is in great turmoil. Because of this foreclosure crisis there isn’t enough money for schools and county services. People are afraid and angry and blaming each other. This problem was not caused here. It is the result of the behavior of the large financial institutions, banks and multinational corporations who have manipulated things for their own benefit. They have moved jobs out of the country, written millions of sub-prime mortgages, failed to register them with counties and pay the fees, falsified paperwork in order to hide the fact that they don’t have the original documents. They bundled the mortgages (securitized) and sold them over and over, and foreclosed on them when people couldn’t pay because of lost jobs, rising interest rates and falling property values.
It is not the fault of the homeowners at all. The big banks and corporations spend billions of dollars to elect people who will support their interests. They spend millions more to hire lobbyists to convince elected officials to write tax laws and legislation that makes them richer and has ruined our economy.
During the buildup of the “housing bubble” the banks realized that they could make more money by writing more mortgages. The people writing the mortgages found they sold more mortgages faster if they falsified the people’s income records, fabricated data, forged documents and hid fees. All of this drove home costs higher than their actual value and the bubble finally burst in fall 2008.
A report by the FDIC revealed that 85 percent of financial institutions were cited for significant violations of truth-in-lending laws. Of these, 26 percent were failure to disclose the cost of credit, such as interest rate and payment schedule. So, don’t blame the victim! They were lied to and their financial statements were falsified by eager lenders.
People accepted mortgage documents in good faith, not realizing that the financial records had been tampered with, that the interest would go up and then the payments. And they certainly didn’t know that the property value bubble would burst and the value of the property would drop down below the value of the mortgage. It is not their fault either that their jobs are gone. In this financial vacuum people are accused of being stupid and felonious for not paying their bills. It is often treated as a moral issue, which it is not. The victim is not responsible for being victimized, cheated and lied to. We all believed we lived in a country ruled by laws. It is not so anymore.