Posts tagged foreclosure
Louisville, Don't Miss this Party

The Network Center for Community Change's annual Chill 4 Change fundraiser is this Saturday at 7 p.m.


Louisville's most righteous nonprofit, The Network Center for Community Change, is having its annual "Chill 4 Change" fundraiser this Saturday night. Read more about NC3 and Chill 4 Change. 

If I were to follow convention, I would exhort you to attend or donate by referencing the awesome work NC3 does in Louisville around educational equity, workforce development, and family financial stability. I would explain that NC3 is a client of mine. They pay me to continue encouraging our elected officials to adopt policies to remedy the fallout from the ongoing foreclosure crisis.

But, I'm not conventional and neither is NC3. In an era defined by the contradiction—enormous wealth going to very few, unemployed college graduates, electronic connectedness supplanting connection IRL—NC3 combines an old-school commitment to bringing diverse communities of people together with a new-school approach to community organizing. I don't know of another organization doing work as interesting as NC3.

Am I biased? You bet. Am I wrong? Come to Chill 4 Change and find out for yourself. 

At Chill 4 Change, you'll meet the people behind Louisville's most daring nonprofit. They're not bad dancers, either, so wear comfortable shoes.

If you're ready to buy tickets, this is the link for you


John Stewart Explains and Lampoons MERS, the "Mortgage Electronic Registration System"

I love Jon Stewart (@thedailyshow) for his ability and willingness to explain and lampoon MERS.  

As a foreclosure defense attorney, I have to spend a lot of time explaining to clients, opposing counsel, and courts things like the Uniform Commercial Code, residential mortgage-backed securities, pooling and servicing agreements, and, yes, MERS. I really admire Jon Stewart's ability to cut to the heart of a really (and purposefully) complicated and opaque system for privatizing the responsibility for recording the ownership of mortgages across America and the damage that privatization has done to countless homeowners. 


The Right to Counsel in Kentucky Evictions and Foreclosures

Yesterday, I presented at the Kentucky Bar Association's Kentucky Law Update on our foreclosure crisis. I wish I could pull the tape from yesterday's presentation to prove to you that this is a direct quote: 

Folks, this crisis [the foreclosure crisis and the imbalance of power of the parties] is the defining legal issue of our time. This is our Gideon v. Wainwright moment and we will be judged by how we respond.

In today's New York Times, professor Matthew Desmond says, seriously, the exact same thing for landlord–tenant cases.

Our legal system extends the right to a state-appointed attorney to someone facing months or years of prison but not to someone facing months or years of homelessness.
— Matthew Desmond in the NYT

The time has come to establish the right to counsel in cases where a family's housing is on the line. 

Foreclosure Law Update and Arguing Equity in Kentucky Foreclosures

I am presenting today in Louisville, Kentucky to a huge room of Kentucky attorneys on our ongoing foreclosure crisis. Many thanks to the Kentucky Bar Association for asking me to speak again this year at the Kentucky Law Update.

Last year, I spoke about the Home Affordable Modification Program (HAMP), the federal program designed to encourage servicers to modify struggling homeowners loans by offering them money for each loan they modify. (Here's the video of that presentation.)

This year, I'm discussing two recent Kentucky Court of Appeals decisions and then pivoting to a novel, but important argument that most advocates ignore: equity. Kentucky courts exist to consider both legal and equitable arguments in each case. My position is that foreclosure cases beg for equitable arguments.

I hope to have a video to post for you at a later date, but for now here is the PowerPoint presentation I will use today. Download the PowerPoint file for the notes section. If you just want the slides (preserved in their original formatting and not screwed up by the fact that you don't have the typeface I used), download the .pdf

If you're reading this because you attended the presentation, thanks again for attending. If you are an attorney or a homeowner with questions about foreclosure, contact me online or give me a call: 502-509-3231. 

If you are interested in foreclosure, justice writ large, and/or if you are an attorney who wants to use your law degree to make Kentucky a better place, sign up for email updates about the Commonwealth Justice conference I'm organizing. It's going to be in Louisville from August 8 to August 10, so sign up and mark your calendar. It's gonna be awesome. 

The Number of Vacant Properties and Frustration with their Owners Grows in Louisville

Louisville's foreclosure crisis has swollen the number of vacant properties in the city to between six- and eight-thousand (no one can say for sure). Three things are for sure, though. Vacant properties drive down the value of surrounding homes, erode neighborhoods, and contribute mightily to the diminution of property tax revenues in the River City. Louisville's response, both in the past and today, has been and promises to be ineffective to prevent banks from unnecessarily wasting our housing stock.

A recent C-J article described howout-of-state banks owe the city more than $200,000 in fines. I have to admit: when I read that article I thought, "Is that all?"

The house's owner owes Louisville Metro Government hundreds of dollars in fines and fees, along with $56,000 for 16 other properties around town to which it holds title. That owner is New York-based Citibank, one of nine financial institutions that owe Louisville Metro Government $242,000 in fines and fees for property maintenance violations at vacant houses –— money that the city likely will never collect.

Citibank owns 17 vacant properties that they continue to fail to maintain. The cost of this should be much greater than $56, 000 in unenforceable fines. Indeed, until the cost is greater, out of state banks will have few incentives not to foreclose and decide not to invest in "unprofitable" properties here in Louisville.

recent report from the National Housing Institute articulated a multi-pronged approach that hard-hit areas like Cleveland are taking to avoid the blight of vacant properties. The key first step was to "change the economics of owning vacant property." This involved demolishing five times (200 to 1000) as many lots in 2007 as Cleveland did in 2006 along with levying stiff (read: high six figures) fines against irresponsible corporate investors for failure to maintain their property. The report's conclusion lays out the steps Louisville must take to avoid the loss of entire neighborhoods to blight imposed by out-of-state banks.

First, ramp up code enforcement to control the ownership and irresponsible transfer of post-foreclosure vacant property. In other words, change the economics of owning vacant property. Second, while fighting the immediate battle, be forward-thinking and start planning ahead for the sustainable reuse of accumulating vacant property. Third, and critically important, establish an entity, such as a land bank, that can receive and responsibly hold vacant property. It should be noted that any land bank can only be useful if it has the proper financial resources to undertake this task. Linking land banks to excess spin-off property tax revenue, as first developed by the Genesse County Land Bank, may be the single most important innovation in urban redevelopment in recent years.

One thing not recommended by the National Housing Institute report: shaming banks into paying their fines. This is the approach recently proposed by some our Louisville's most well-intentioned lawmakers. The lawmakers assembled a list of the banks who owe the city fines on their vacant and abandoned properties and sought to publish it in the Louisville Courier-Journal.

The idea is quaint. It is based on the old paradigm of mortgage lending: a belief that your banker is someone who lives in your community and cares about what happens here. For the most part, he (or she) does not. Jamie Dimon will not be in the congregation on Sunday.

A house sits vacant in Louisville

Citibank is not Stockyards Bank and Trust. Wells Fargo is not King Southern Bank.

Wall Street firms have securitized over eighty percent of all home loans in America, collecting them into massive trusts in which global investors can then buy shares. The creators of securitized trusts, the investors in securitized trusts, they do not care about a vacant property in Louisville. They care about their bottom line.

As corporations (out-of-state corporations), they cannot be shamed--they have no conscience. The only way they will take responsibility for their properties in Louisville is if Louisville makes it in the banks' financial interest to take responsibility.

For the last two years, I have been working on the front-end of the vacant property problem: defending homeowners from foreclosure and trying to prevent properties from being vacant in the first place. One of the things on which I want to focus next is what to do about the fallout from the foreclosure crisis: the thousands of vacant properties that continue to plague our city. I will write about solutions other cities are trying and ways to make Louisville's land bank more effective. (Hint: the NHI recommended "proper financial resources.")

Louisville's inadequate response to its foreclosure crisis has created a second, more enduring crisis: a growing number of vacant and abandoned properties. The crisis of abandoned properties harms blameless neighbors by devaluing their homes and inviting crime into their communities. Without bold action, this second crisis threatens to undermine the integrity and livability of entire neighborhoods. A quick look at the location of these vacant properties reveals that this issue, like so many, is not just an economic issue, but a civil rights issue, as well.