Fighting on Frontlines of the Foreclosure Crisis: Citizens Take on the Monster Banks
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East Boston is one of those urban neighborhoods that is easy to pass through and hard to get to. It's separated from downtown Boston by a river, bisected by two tunnels and a freeway, and hemmed in by Logan Airport on the east. Sonny Noto's restaurant is a reminder of the days when it was heavily Italian, but it's now overwhelmingly Latino, mostly Mexican, Salvadoran and Colombian immigrants, their desires for ice cream and cumbia CDs catered to by the Heladeria al Jardin and El Poder Musical.
East Boston has been hard hit by foreclosure. More than 400 buildings there have been foreclosed, says Dominic Desiata, a community organizer for City Life/Vida Urbana. He estimates that out of a population of 40,000 people, 500 to 700 have faced eviction because of foreclosures.
Unlike the rest of the country, most of the victims of foreclosure in the Boston area are renters. Steve Meacham, a longtime City Life/Vida Urbana organizer, estimates that three-fourths of the people facing eviction in foreclosed properties are tenants.
"The foreclosure crisis is mainly affecting the three-decker," says Zoe Cronin, an attorney with Greater Boston Legal Services, referring to the three-story, three-apartment wood buildings that are urban New England's iconic working-class housing.
But Boston has also seen a strong campaign against foreclosure evictions. Combining grassroots organizing, legal action, political and media pressure on the banks and eviction-day sit-ins, it's so far been able to keep dozens of people in their homes.
"We've kept many, many people in their apartments," says Desiata. "We don't want to be displaced at the right price. We want to stay and keep the community together."
The banks, he says, don't want to renegotiate mortgages, and want the buildings vacant once they've been foreclosed. So they have to be pressured to let residents stay and pay rent, or to sell the building at the current appraised value instead of the housing-bubble mortgage value.
Salvadoran immigrant Alfredo Martinez became an organizer with City Life/Vida Urbana two years ago, when he was fighting eviction. A short, stocky engaging man in a brown outdoor-work jacket and a baseball cap, Martinez first came to the United States in 1973 and settled in East Boston after several trips back and forth. He's worked in restaurants and construction, as a bricklayer, tiler and plasterer.
In 2007, Citizens Bank foreclosed on Martinez's landlord, and then moved to evict him. He got a Legal Services lawyer to contest the eviction on the grounds that the building needed repairs. Eventually, he won a $12,500 settlement and the right to stay, signing a lease with the new owner, although his rent was raised to $900 and he's still trying to get repairs done.
Now he spends Saturday afternoons canvassing East Boston. Organizers—mostly tenants who have fought their own evictions—trek through the neighborhood in pairs, knocking on the doors of recently foreclosed buildings to try to get the residents to join the movement against displacement.
On Brooks Street, a toddler peers out the window of a two-story clapboard home. Someone immediately pulls the curtains shut. A lot of immigrants have miedo—a fear of strangers, Martinez explains; they're scared that outsiders could be immigration agents or police.
The upstairs apartment has five names listed on the mailbox, a common sight in the neighborhood. That's nothing, Martinez says. He once lived in a house with 24 people.
No one is home at the next building, on Lexington Street. On Marion Street, the three-decker of beige clapboards and stone facing already has a padlock on the front door. The white three-decker on Prescott Street has a for-sale sign. A real-estate Web site says a two-bedroom condo in the building sold for $100,800 in March and $83,605 in October, slightly below the average for the area.
The last block of Putnam Street slopes sharply down to the waterfront, overlooking the gas tanks across the river. The white clapboard house with the archetypal New England greenish-black shutters is obviously vacant. The mailbox is stuffed and the front door is open. The only signs of habitation inside are an old couch, an embossed-plastic picture of Jesus on the cross, and the drum pads from a Guitar Hero video game. The building across the street has a for-sale sign, broken brick steps, and a backwards swastika spray-painted on the side.
At the last building, a tan three-decker on Bennington Street, a woman answers the door. Martinez hands her a flier and gives her his spiel in Spanish, but she says there's a new owner, they got a new lease, and there are no problems. The other groups of canvassers have better luck. They get five new contacts.
A few weeks later, the canvassers will gather in a community group's basement offices, practicing and refining their talks and techniques, making sure their mensajes de comunicar cover the key points. Desiata, a bearded man of about 30 with close-cropped black hair, conducts the meeting, mostly in Spanish. The United States is in a housing crisis, he says. "It doesn't matter if you're owners or tenants—the bank wants you out."
Maria Guardado has been fighting eviction for the last year. The three-decker she lives in was foreclosed in January 2009, but she kept paying rent until April. A real estate agent offered her $1,500 "cash for keys" to move out, but she decided to stay.
"I decided to stay because I have rights," she says in Spanish. "The others moved out because they were undocumented—they were scared."
Guardado, a Salvadoran immigrant, walks with one crutch. She says she had to leave her job in a spinach-packing plant because of the injury, caused when her supervisor attacked her. She and her husband, a taxi driver, have been staying in the apartment, but they want to move, because the bank has refused to make repairs.
"We're human beings, and we want to live like human beings, somewhere comfortable," she says. "It's not right that we have to pay rent for these miserable conditions."
Miriam Ramirez, an outgoing grandmother of two who works in a university cafeteria, got a letter in April 2008 telling her she had 15 days to leave her apartment. Instead, a neighbor told her about the CL/VU campaign, and she became an organizer. The bank sent her lots of threatening letters, but never went to court to initiate a formal eviction. Eventually, new owners bought the building for $219,000 and agreed to let her stay. In the 16 months she'd been on rent strike, she saved enough money to buy a house in her native Colombia.
"I stayed strong and avoided fear," she says. "I was the lucky one. God has been very good to me."
City Life/Vida Urbana, based in the southeastern Boston neighborhoods of Jamaica Plain, Roxbury, Dorchester and Mattapan, noticed rising foreclosures in early 2007. At first, says Steve Meacham, they thought it wasn't their issue, as the group dealt mainly with tenants' rights, "but then we saw that the main evictors were the banks, and a lot of the people being evicted were tenants."
The group's first campaign was against Deutsche Bank. Organizing under the umbrella of the Bank Tenants Association, it has expanded to East Boston and inner suburbs like Revere and Chelsea. Now, says Meacham, two-thirds of the people coming to the group's meetings in southeast Boston are owners—typically overwhelmed working-class buyers.
"It's been an interesting experience for me, coming from the tenant side of things, getting to understand the landlord side," says Desiata. Many buyers worked the same low-income jobs as their tenants, but "even if they had good intentions, the numbers didn't add up."
Maria Cuervo, a mother of four who immigrated from Colombia 21 years ago, is one. She bought a two-family house in Revere for $480,000 in 2004, hoping to cover the mortgage through rent, her income as a school bus driver and child support. But when she lost her child support, she was unable to make the payments. She hired a lawyer to get the loan modified, but the house was foreclosed last September.
"A lot of these people were targeted with bad loans," says Zoe Cronin. "We've seen a lot of predatory lending." The interest on adjustable-rate mortgages can jump to as high as 33 percent, she says. In one case cited by Desiata, a kitchen worker's monthly payments on a three-decker ballooned from $3,300 to $5,600.
It's impossible to work with banks before foreclosure, says Cronin. Under Massachusetts law, owners don't have to go to court to foreclose on property; all they need to do is place a notice in a newspaper before they auction it off. As tenants or homeowners thus have no leverage, banks refuse to negotiate.
"There's almost no way to fight foreclosure," she says. "We have to fight the eviction."
One avenue for that is in the way banks package and sell mortgage debt; the bank that files for foreclosure often does not have legal title to the property. In one case, Cronin says, the trust listed as the owner had ceased to exist three years before. Another avenue is that Massachusetts laws intended to protect tenants from slumlords bar eviction when the building is dilapidated.
Meacham describes the group's strategy as "sword and shield"—the sword of publicity and direct action, and the shield of legal action. Tenants have more legal rights, so most of the direct action has been to defend homeowners. In the last year, CL/VU has staged 18 "eviction blockades"—sit-ins on the day the marshals come to seize the building.
These have usually succeeded at delaying evictions, but most of the people defended have eventually lost their homes. Their main purpose, says Meacham, is as a "public opportunity to embarrass the banks to the max."
Conservative Banking and Radical Activism
City Life/Vida Urbana is not the only group using direct action against foreclosure. In Miami, the homeless people's organization Take Back the Land has occupied vacant foreclosed houses, and ACORN has staged similar sit-ins in Baltimore and Detroit.
In the long run, though, the group's strategy is to get lenders to reduce the principal on mortgages, which is the only way that working-class buyers can afford to keep their homes, Meacham says. That idea has recently gained a surprising amount of credibility outside the left, he adds, as investors and major media realize that "the real estate crisis is not over, the financial crisis is not over."
In what he calls an odd combination of "conservative banking and radical organizing," the group has been working with Boston Community Credit, a nonprofit loan fund for affordable housing. The fund has been acquiring foreclosed properties and reselling them to the homeowners at the current market value, usually for around half the price they paid during the housing bubble. It has closed on 25 houses so far, with another 50 in the pipeline.
"It takes a nonprofit to do conventional banking now," Meacham says, adding that he finds it ironic that critics of the free market are the only ones presenting solutions that will save it from the speculative manias of the last decade. Fannie Mae, the federally supported mortgage-finance agency, changed its policy a year ago to ban evicting tenants in foreclosed buildings it holds, and two months ago said it would not throw owners out of their homes. But Meacham says these policies have been applied "very, very unevenly"—Fannie Mae has issued almost no leases, is still doing evictions, and often gives tenants "cash for keys" payments to leave.
Meanwhile, the banks in the Boston area have been recalcitrant about doing more than temporary loan modifications to avert foreclosure, organizers say.
"It would save a lot of anguish and money, and people's homes and neighborhoods," says Cronin. The banks almost inevitably lose money on a foreclosure, she explains, because the process costs money and they then have to sell the property at a loss.
"What they're trying to do is sit on the property and wait until the market comes back," says Desiata. "In the meantime, people are getting thrown out in the street."
He and other organizers are now seeing a more ominous sign: Foreclosure filings are rising, but they're now happening to people who can't keep up their payments because they've lost their jobs.
"We're gathering up our resources and consolidating our victories for the next fight," Desiata says.
"It's not a losing battle, it's a winning battle, but it would be nice if we didn't have to fight it," Cronin says.
"Always forward, not one step back," concludes Miriam Ramirez. " Unidos venceremos." United we will win.