Unmasking the Foreclosure Crisis

In October, headlines exploded across the United States as one lender after another temporarily suspended foreclosure operations and pledged to launch investigations into the conduct of their foreclosure programs. For a few days there, it seemed like foreclosures everywhere had ground to a functional halt, with the biggest players in the game all out of it as a result of the suspensions.

What was interesting about the situation to me as an observer was that it was triggered by the actions of a single person. It was, literally, a case of a little person going up against the man and winning, a very rare triumph in this day and age. While the United States was built on the idea that everyone gets a fair shake, has a chance to succeed, can access justice, the truth is often far from that, and thus there’s a part of me that celebrates every time cases like this occur, when someone manages to fight a huge system and win.

This woman, like many people in the United States right now, was facing the loss of her home, and she didn’t want to go down without a fight. So, she sought legal counsel from a community legal services program, and they assisted her with fighting the lender, revealing in the process that gross incompetence was happening on pretty much every level of the mortgage system, from loan officers who didn’t know how mortgages worked to banks losing paperwork. She fought, and won, and got to keep her house, but more importantly than that, she ripped the mortgage business wide open and left banks with egg all over their face.

The banks, it is clear, operated with extreme callousness and disregard. They thought they were untouchable and even enjoyed rewards for their activity, in the form of the copious bailout funds that flowed into their coffers. This arrogance resulted in an attitude that of course they could do things like filing foreclosures without the proper paperwork, confident that no one would challenge them and the activity would go unnoticed.

Several factors coalesced here to make the exposure of lending and foreclosure practices possible. It all started with one woman who was unwilling to let the bank take her house, one woman who hadn’t been so beaten down by life that she was willing to take a chance and see if there was anything she could do to hang on to her home. To my eyes, she is one of this country’s heroes, right now, for refusing to take ‘foreclosure’ for an answer and challenging the bank.

Another was the legal organisation she went to for help. I cannot say enough how important community legal services are for communities all over the world. Doing things like fighting the bank usually requires a lawyer with a certain degree of skill, something inaccessible to many people who need legal services because of expense. Being able to get legal services cheaply or for free means that people have access to the field; it’s still not level, when banks and other institutions can bring so much more to bear on the case, but it’s a fighting chance.

It wasn’t just the free legal services, it was the dedication of the people she worked with, the willingness to dig deep, investigate, and go public with the findings. Who knows if she would have received the same outcome with another legal organisation; maybe she would have, maybe she wouldn’t have. It was the publicisation of the situation that mattered here too, with the press going to bat when it came to reprinting, providing interviews, and doing investigation of its own, creating a snowball effect and forcing the banks into the light of day.

She did a great service for her country by taking a relatively small step and seeking legal assistance with her foreclosure proceedings. It’s a step that will reverberate, as it’s clear that investigation into lending practices is going to continue and some banks may even face penalties for their activities. It may not be possible to reverse wrongful foreclosures, and we may never know how many people were illegally forced out of their homes, but it may put a stop to some proceedings now and in the future, and may force banks to be more careful.

May. We all know that banks are allowed a rather free rein in this country, and it’s entirely possible that they will continue right on as before, after a brief hiccup. Alas, it would not surprise me, since it’s clear that banks have learned nothing and neither has the government when it comes to regulating them, let alone actually punishing them for their role in the economic crisis and for their clearly illegal activities.

But none of this would have been possible at all if one woman, one person, had not decided that she was unwilling to give up her home without a fight, had not decided to seek legal assistance, had not decided that she wanted to make sure the bank had done everything by the book, operating on the suspicion that something might be wrong, and she might be able to use that something to win her case. Her goal wasn’t bringing foreclosures to a halt, it was keeping a roof over her head, and the outcome of her persistence wasn’t necessarily something she could have predicted.

It’s cases like this that make me proud any time someone is willing to go against the system and to fight for something. Sure, not every case has the same outcome, or even a positive one, but every little bit helps, every small act of resistance is a reminder that we are human beings with rights, not simply cogs that spew out money and labour on command.