Our Common Good

The nation’s foreclosure crisis rarely is mentioned by the presidential candidates, but it looms large as their campaigns grapple with finding evicted voters in swing states.

Organizers are discovering scores of vacated homes in key battlegrounds that contributed strong turnouts in the 2008 election. In the past four years, more than 3.7 million homes have been lost to foreclosure, according to market research firm CoreLogic.

And canvassers have been left with voter databases — an indispensable tool for getting out the vote — riddled with outdated addresses and phone numbers.

But there’s something brewing that looks like it might be a blueprint to effectively take on the financial services industry: a plan to allow local governments to take on the problem of neighborhoods blighted by toxic home loans and foreclosures through the use of eminent domain. I can’t speak for how well the program will work, but it’s certaily been effective in scaring the hell out of Wall Street.

Under the proposal, towns would essentially be seizing and condemning the man-made mess resulting from the housing bubble. Cooked up by a small group of businessmen and ex-venture capitalists, the audacious idea falls under the category of “That’s so crazy, it just might work!” One of the plan’s originators described it to me as a “four-bank pool shot.”

As unwelcome as these expenses might be, the alternative — letting those vacant properties fall into disrepair — is arguably even worse. A house with peeling paint and uncut grass is a house that’s less likely to get sold. In the meantime, the longer that house stands empty and decrepit, the more damage it does to neighboring property values.

Yet this kind of maintenance work costs money, specifically $557 million last year, according to a recent segment on ABC News. In the coming year, ABC reports, American taxpayers will spend more than $40 million just to keep the lawns mowed at these addresses.

The protesters were promptly removed for interrupting the hearing, but Issa was just getting started. He later blamed homeowners for robo-signing, the fraudulent foreclosure practice that landed banks in hot water in 2010, according to AlterNet reporter Sarah Jaffe:

(via Rep. Issa Confronted By Protesters At Foreclosure Hearing, Blames Bank Fraud On Homeowners | ThinkProgress)

(Reuters) - Banks are foreclosing on America’s churches in record numbers as lenders increasingly lose patience with religious facilities that have defaulted on their mortgages, according to new data.

The surge in church foreclosures represents a new wave of distressed property seizures triggered by the 2008 financial crash, analysts say, with many banks no longer willing to grant struggling religious organizations forbearance.

Since 2010, 270 churches have been sold after defaulting on their loans, with 90 percent of those sales coming after a lender-triggered foreclosure, according to the real estate information company CoStar Group.

In 2011, 138 churches were sold by banks, an annual record, with no sign that these religious foreclosures are abating, according to CoStar. That compares to just 24 sales in 2008 and only a handful in the decade before.

The church foreclosures have hit all denominations across America, black and white, but with small to medium size houses of worship the worst. Most of these institutions have ended up being purchased by other churches.

The highest percentage have occurred in some of the states hardest hit by the home foreclosure crisis: California, Georgia, Florida and Michigan.

“Churches are among the final institutions to get foreclosed upon because banks have not wanted to look like they are being heavy handed with the churches,” said Scott Rolfs, managing director of Religious and Education finance at the investment bank Ziegler.

Will we see more pastors standing with the Occupy movements come spring?