How to Save Your Town By Cock-Blocking Wall Street

This is FUN, people!  Watch the banksters' heads explode!

From The Nation:

In almost every part of the country, entire neighborhoods—and in some cases, whole cities—are underwater. They are not victims of natural disasters like Hurricanes Katrina and Sandy. Like the Conways, they are drowning in debt, victims of Wall Street’s reckless and predatory lending practices.

Since 2006, when the speculative housing bubble burst, home prices have plummeted; homeowners have lost more than $6 trillion in household wealth. Many now owe more on their mortgages than their homes are worth. Despite rising home prices in some parts of the country, more than 11 million American families—one-fifth of all homeowners with mortgages—are still underwater, through no fault of their own. If nothing is done, many will eventually join the more than 5 million American homeowners who have already lost their homes to foreclosure.

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The problem is contagious. Communities with many underwater homes bring down the value of other houses in the area. Foreclosures alone have drained at $2 trillion in property values from surrounding neighborhoods, according to a Center for Responsible Lending study. The resulting decline in property tax revenues has plunged some cities into near-bankruptcy, lay-offs and cuts to vital public services.

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Faced with this quagmire, a growing number of cities—with the support of community groups and unions—are taking things into their own hands. Thanks to a legal strategy initially formulated by Cornell University law professor Robert Hockett, city officials have discovered that they can use their eminent domain power—which they routinely use to purchase property for sidewalks, infrastructure, school construction and other projects—to buy underwater mortgages at their current market value and resell them to homeowners at reduced price and mortgage payments.

Richmond (CA) is the first city to pursue this strategy. Its city council—with the support of the Alliance of Californians for Community Empowerment (ACCE), which for years has organized homeowners against predatory banks—recently voted 6-0 (with one member absent) to make offers to buy underwater mortgages. If lenders refuse, the city will take them by eminent domain and work with a group of friendly investors (Mortgage Resolution Partners, or MRP) to refinance the loans with the Federal Housing Administration.

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If banks reset Richmond’s underwater mortgages to fair market value, homeowners would save an average of over $1,000 per month on their payments. If those savings were spent on local goods and services, it would generate about $170 million in economic stimulus and create at least 2,500 jobs.

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Wall Street is up in arms. Since several cities began discussing this strategy last year, industry lobbyists have been fighting back. In a coordinated effort involving letters, phone calls and meetings, some of the nation’s most powerful lobby groups—including the National Association of Realtors, the American Bankers Association, the National Association of Home Builders, American Securitization Forum, and the Securities Industry and Financial Markets Association (SIFMA)—have tried to dissuade local officials from pursuing the eminent domain strategy.

In April, for example, SIFMA officials Kim Chamberlain and Tim Cameron traveled from New York to Richmond to persuade Mayor Gayle McLaughlin and her Council colleagues to back off.

“We’re not going to be intimidated by these Wall Street folks,” said McLaughlin, a former teacher who has been mayor since 2006. “It is pretty outrageous to hear them opposing this. They’re the ones who caused this crisis in the first place. And they don’t have a solution. The city has every right to do this.”

Fuck Wall Street. Fuck the bankster. Fuck the Fed. Take back your house. Take back your neighborhood. Take back your town. Take back your country.