You can listen to the episode, "Occupy Fort Hernandez" and get a summary of what has happened to this family over the past four or five years, as their bank raised their rates under the terms of their ARM to a level they couldn't sustain, advised them to let payments lapse so they would qualify for a mortgage restructuring, and then sold their house at auction before restructuring their loan.
Here's a video that briefly explains their situation, and an effort the other night to check on the welfare of Adrian, Ulysses' younger brother, after midnight on a school night:
These are the ABC's of the Banking Scandal:
I lend you money so you can buy a house and I collect payments from you, with interest.
Our arrangement is that your payments will go up, big time, at some point, but I tell you not to worry, because I will let you refinance before that happens.
I keep insurance on the loan, so if anything happens, I get mine.
When your payments are about to increase, I don't let you refinance. After all, the housing bubble has burst, and the over-inflated value we agreed with you that the home was worth is less than half of that, so you're underwater, and we can't lend to someone underwater, now, can we? You manage to meet the new payments as long as you can, because it is your house, after all.
When it becomes clear you aren't going to be able to keep up the new, huge payments, I sell your loan to another bank or investment company or individual, whatever, as long as they're overseas, as a good investment. I get my buddies in the industry who rate investments to say they're super-good.
Then, I watch as you go under, the investor overseas is left holding the bad debt and I collect the insurance on the defaulting loan.
Ta-Daaa...
The banks have been engaged in these practices for years, since the abolition of Glass-Steagall under the Clinton administration and continuing onward. We're taught that banks are financial institutions, the place to put your money if you want conservative returns but safe, insured investments. After Glass-Steagall went away, banks were able to "gamble" with money, investing it in ways that hadn't been allowed since....let's see, does the Great Depression ring a bell...?
So, the Hernandez family find themselves in a situation many families have in recent years. The bank is trying to evict them from their home after giving them bad advice that led to them defaulting on the loan they had provided them. The bank gets the property, gets to re-sell it, and collects the insurance on the bad loan.
BTW, the bank is required to prove they own the loan document they're throwing you out over. In many cases, they don't have the proper chain of transfers. Papers haven't been signed or filed properly; there are instances of auto-signing, which isn't allowed when it comes to this kind of documentation. But rather than give the home-owner a chance to refinance, as they were supposed to get under HAMP and the 'too-big-to-fail' bailouts, the banks pressure the homeowners to leave voluntarily, or have them evicted with the assistance of the police.
All families have to do when faced with eviction is demand proof the bank owns their loan and has the legal authority to remove them from the property. If the bank cannot provide it, in full, they can't evict.
In the case of the Hernandez family, they have been joined by the Occupy Movement and have formed #FortHernandez (Twitter: @Fort_Hernandez). There are anywhere from 40 to 100 people helping them "hold down the fort" and stop them from being evicted while the Hernandez family tries to work with the bank to renegotiate their payments and modify their loan to a reasonable level.
They have been Occupying their own home against the banks and police for 28 days now, and you have to wonder: what's the benefit in making this family homeless, when there are so many empty homes in this country, and no families to buy them? If someone owes me money, it's in my best interest to work with them if their situation changes, so they can continue to pay me back.
There are more families around southern California fighting to hold their homes under similar circumstances. If these families can hold out until January 1st, they will be protected under the recently-signed Homeowners Bill of Rights.
If they can't hold out that long, they will be added to the roles of homeless families, homeless children, living in the streets, in poverty, in of one of the greatest countries on Earth.
• • • • •
"Independent Thinking With Steve Gelder" airs on www.NewDissidentRadio.com and GreenEarthRadio.com, every weekday morning at 10AM Pacific, 1PM Eastern.
Follow me on Twitter: @SteveGelder
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