"Privatizing" State and County Overhead Expenses for Foreclosure and Eviction Services
Amid reports this holiday season of record profits and record bonuses in the billions for Wall Street bankers, middle class citizens mourn the loss of 8 million jobs, millions of foreclosures and the looming bankruptcy of our counties and states. As Wall Street bankers toast to their "success" and great fortune acquired by our loss; as they "celebrate" this holiday season, one might wonder how we might possibly get that money back. Let’s see... what do we control that Wall Street bankers want – in fact need?
Through state taxes we finance the court systems that Wall Street banks use to collect our properties (foreclose); and through property taxes, local property owners finance county sheriff departments that enforce collection (evictions). These appear to be essential services for Wall Street banks and a possible untapped revenue source for states and counties. What would national mortgage servicers do without these services?
Perhaps if we asked nicely they would offer to contribute a lot more? No?
#1 Privatizing Municipal Court Overhead – $25,000 Foreclosure Filing State Surcharge Proposed
Based on their obscene glut of profits and bonuses and our states and communities facing bankruptcy, clearly we’re not charging enough. What is fair market value for these services? Of course they could choose to not pay the $25,000, which would stop foreclosures dead in their tracks. Nice. But Citibank, BofA, Wells Fargo, etc., shareholders might prefer to use that bonus money to recover shareholders’ assets instead.
This new revenue could be used to subsidize community banks to make well collateralized loans for citizens to buy back foreclosed homes (based on the appraised value after foreclosure) at affordable monthly rates, sticking Wall Street with the 20-40% equity loss they created, as well as the $25,000 fee, and slowly but surely states would regain control of their own land and property again. In addition to saving citizens’ homes and balancing budgets, perhaps this could also build a firewall of protection from what appears to be an increasingly unregulated, predatory national investment banking system.
#2 Privatizing Sheriff Department Overhead – $5,000 Eviction County Surcharge Proposed
Sheriff Departments act as collection enforcement agencies for Wall Street bankers by conducting foreclosure evictions and Sheriff sales of properties. Financed through property taxes, we pay for our own evictions. Why? While laying-off Deputies in counties facing bankruptcy, how can County DA’s, Sheriffs and our state legislature justify appropriating any resources to service the collection of "assets" on behalf of out of state Wall Street Banks free of charge – or anything short of "fair market value"?
What This Strategy Could Mean For Oregon and Other States
In 2009 Oregon reported about 34,000 foreclosure filings. If half of them result from Wall Street Banks that would be $425 million per year coming back into Oregon community banks and $85 million/year for our counties, all of which would barely put a dent in Wall Street bonuses (3%?), however, multiplied by 50 states it could cost Wall Street banks $25 billion, or more. Sound familiar? How much were their 2010 bonuses again? Pooof. Are we getting a warm fuzzy yet?
We will likely need exemptions for local income property/lien-holders, ie., these fees only apply to entities that conduct more than (?) foreclosures per year. Or perhaps the distinction between a holding bank and a holding/investment bank could be where to draw the line; or perhaps geographic location of headquarters could be where to draw the line.
Recent reports reveal that Wall Street Banks make more money by foreclosing on loans rather than by servicing them! That would explain nefarious robo-foreclosure assembly lines ensnaring homeowners who can’t get a straight answer from lenders while desperately trying to refinance, even homeowners who are current on their payments. At any time anyone could be forced to defend themselves from wrongful foreclosure practices, a time consuming and expensive proposition where, reportedly, you’re guilty until you prove your innocence – in court! Perhaps this strategy could also help stop this crap.
If it’s possible for Wall Street Banks to unethically game the system to steal from us and hold us hostage, then it must be possible to get ethical legislation that will protect us from overly aggressive, apparently insufficiently regulated foreclosure practices and to, at the very least, equitably share in the expense of our own demise.
Food for thought – Merry Christmas Oregon
JP Sayles
Author, Political Finance Reform
Founder, PoliticalFinanceReform.org
Salem, Oregon
PoliticalFinanceReform.org