New Orleans Given how little of any significance has been done on any governmental or financial level to stem the tide of foreclosures in the USA, I read with interest a blurb in an on-line Shelterforce alert about progress in Hawaii. It seems the Gameliel affiliate, FACE (Faith Action for Community Equity), directed by our old friend and colleague, Drew Astolfi, had put the pieces together in the state legislature and the results are indicating that they have made a huge difference.
Looking at the fact that Hawaii had risen to 9th highest among foreclosure states, Astolfi and his team, initiated a statewide survey and recognized the mainland trend that much of the foreclosure activity was being driven by the big banks (Citi, Wells, etc) and their servicers in fact were responsible for more than 97% from their numbers. They came to the common sense conclusion that the local banks that had to meet directly with the mortgage victims were delaying foreclosures while the big banks, often lacking loan offices in the island, were simply pulling the trigger. One thing led to another, as these campaigns develop, and working with allies in the state legislature, FACE was instrumental in getting a bill passed that offered some relief.
The bill passed in March 2011, almost 18 months ago, required some simple steps that turned out to make a difference and a huge one at that:
The new law, called Act 48, gave owner-occupants of residential property in non-judicial foreclosure the ability to meet face-to-face with their lenders to modify their loans or work out a payment plan within three months. Banks were barred from carrying out non-judicial foreclosures without the face-to-face sit-down, and any previous foreclosure proceedings were frozen during the three-month process.
Foreclosures in Hawaii dropped by more than half from May 2011 to January 2012. “Personal bankruptcy rates plummeted, and the Council of State Governments recommended that every other state adopt a similar law,” says Rep. Herkes.
As encouraging as this is, it is depressing to find – 18 months later – that other state governments and even the federal government did not jump on this idea and implement it.
The insight of the campaign and the legislation is the power of “community” even in banking, when finance is forced to confront families. When communities have the same voice and can be heard as clearly as Wall Street, then as Hawaii has now proven, foreclosures can actually be modified and reduced.
FACE to face has worked in Hawaii, so why not force face-to-face in finance in the mainland?