So the other day, Mitt Romney was in NYC for a private fundraiser at the Waldorf-Astoria hotel. Sounds like the perfect recipe for a direct action, right? Yeah. Thought so.Luckily, some amazing organizations took advantage of the perfect recipe and came up with "Mr. 1%, the job cremator" (clever, right?) and staged some great actions including a funeral procession for all the jobs he killed while at Bain Capital (hence the "job cremator" title). Here's a video of the demonstration:We pushed out an email to our member list and turned out some folks -- tweet to us @RebuildDream if you went!Shout outs to UnitedNY, MoveOn.org, New York Communities for Change, the Strong Economy for All Coalition, labor groups, and many others who helped put it together.
It's not just DeMarco having a rough week. Conservative lawmakers all over the country have been trying to suppress progressive voter turnout in the form of voter ID laws for the past year. Voter ID laws have been compared to the poll taxes that kept black voters out of the polls before the Voting Rights Act of 1965. This week, however, the effort was shut down in two states with some of the most severe ID laws - Texas & Wisconsin.This is a huge win for civil rights activists and progressives all over the country. The Texas and Wisconsin judges' decisions to shoot down voter ID legislation is an affirmation that voting is a basic right in this country, and that any attempts at voter suppression are an unacceptable injustice against American citizens.The judge in Texas claimed that the state's voter ID law disproportionately disfranchised Hispanic voters. In a letter to the director of elections for Texas's secretary of state, the head of the Justice Department's civil rights division said “Even using the data most favorable to the state, Hispanics disproportionately lack either a driver’s license or a personal identification card."In Wisconsin, Circuit Judge Richard Niess ruled that photo ID requirements are "unconstitutional to the extent they serve as a condition for voting at the polls." The law was challenged by the League of Women Voters of Wisconsin.Neiss wrote, "A government that undermines the very foundation of its existence - the people's inherent, pre-constitutional right to vote - imperils its legitimacy as a government by the people, for the people, and especially of the people."And other states aren't off the hook. The UN Human Rights Council is now investigating voter ID laws throughout the U.S. The case was brought to the UN by the NAACP, who has been challenging photo ID laws on the grounds that it disproportionately disfranchises African American voters. It's no accident on the part of conservative lawmakers - black voters tend to vote progressive."This really is a tactic that undercuts the growth of your democracy," said the NAACP's senior vice president for advocacy, Hillary Shelton.This issue will continue to be a major fight in the months leading up to 2012 elections. Does your state have a voter ID law? Find out and take action!
Washington Post reports that student debt, which is expected to reach $1 trillion in the next couple months, could be the next big "debt bomb".The National Association of Consumer Bankruptcy Attorneys released a survey which found more than 80 percent of bankruptcy lawyers in the past few years have seen a big spike in people seeking relief from student loan debt.The head of NACBA commented, “This could very well be the next debt bomb for the U.S. economy.” Effects would be similar to those of the housing crisis. Read the article in Washington Post below:
Bankruptcy lawyers have a frightening message for America: They’re seeing the telltale signs of a student loan debt bubble that is placing increased financial pressure on families struggling with their children’s mounting debt. According to a recent survey by the National Association of Consumer Bankruptcy Attorneys, more than 80 percent of bankruptcy lawyers have seen a substantial increase in the number of clients seeking relief from student loans in recent years.
In most cases, those clients could not meet the federal hardship standards that are necessary to discharge a student loan through bankruptcy proceedings. Instead, many of these parents or guardians who co-signed the student loans face the prospect of losing their life savings, cars or homes to collection agencies for aggressive private lenders.
William Brewer, head of NACBA, has said, “This could very well be the next debt bomb for the U.S. economy” — something akin to the housing mortgage loan crisis that triggered the U.S. financial crisis.
“Obviously, in the short term, student loan defaults are not going to have the same ripple effect through the economy that mortgage defaults did,” Brewer said. “My concern is that the long-term effect may be even graver, because people who need student loans to try to get a higher education or retraining” will be unwilling to run the risk of taking out a student loan.
Moody’s Analytics has evaluated the chances of a student loan crisis.
“Despite its rapid growth even as credit quality weakened during and after the recession, student lending is not likely to turn into the next subprime crisis,” it said in a January report. The student loan market is one-tenth the size of the residential mortgage market. And more than 90 percent of student loans are federally guaranteed.
But the rapid growth of student debt — mostly from federally subsidized loans — has alarmed some in the financial world and looms as the biggest long-term economic problem facing many college graduates and their families today.
The amount of student loan debt has skyrocketed in recent years to a total of $867 billion last year — or more than the $704 billion in outstanding U.S. credit card debt, according to the Federal Reserve Bank of New York. Of the 37 million borrowers who have outstanding student loan balances as of third-quarter 2011, 14.4 percent have at least one past-due student loan account.
During the 2010-11 academic year, students and families borrowed $104 billion in loans from the Education Department, a 50 percent increase over three years. Private education loans fell by 65 percent in that time, to $7.9 billion in 2010-11.
College seniors who graduated with student loans individually owed an average of $25,250, up 5 percent from the previous year, according to a study by Brewer’s group. Parents are responsible, on average, for $34,000 in student loans, a figure that rises to about $50,000 over a standard 10-year repayment period. An estimated 17 percent of parents whose children graduated in 2010 took out loans, a 5.6 percent increase from 1992 and 1993.
A report last year by the Pew Research Center and the Chronicle of Higher Education warned that public anxiety over college costs is at an all-time high. Moreover, “low income college graduates or those burdened by student loan debt are questioning the value of their degrees,” saying the cost of college has delayed other life decisions, the report said.
The Inghams of suburban Minneapolis are an example of how one family got into hot water. David Ingham, a 70-year-old disabled Vietnam War veteran, co-signed about $50,000 in student loans for his son to attend a fine-arts school in Minneapolis as well as Catholic University.
Ingham’s son held a couple of jobs after he left Catholic University, but he was laid off in October 2009 and has not found work since. When his son could not repay his loans, a Sallie Mae collection agency took the family to court, seeking to place a lien on the Inghams’ condominium in suburban Edina.“It’s a nice condo, and I worked my butt off for years to get this thing. Now we don’t know what the heck is going to happen,” David Ingham said. “We’re in a free fall right now.”
While Ingham says he and his family are in a state of shock and depression, others are angry and defiant.
More than 125,000 people have signed an online petition to protest a $50 forbearance fee that Sallie Mae, the private student loan giant, had been charging borrowers for years whenever they deferred payments on a loan. Federal programs that provide the preponderance of loans do not charge such fees.
Stef Gray, a Hunter College graduate from New York who has paid $300 in forbearance fees to the company since May, organized the petition drive in hopes of persuading Sallie Mae to drop the fee, just as Bank of America and other financial institutions dropped unpopular fees in the face of Internet protests.
Gray, 23, who lives in Brooklyn, has become a symbol of the plight of young Americans saddled with debt. With both her parents deceased, Gray has put herself through school with part-time jobs and three private loans with Sallie Mae.
Since graduating in May with a master’s degree in geographic information systems, Gray has been unable to find full-time employment. Instead, she says, she has gotten by with temporary jobs and waitressing. Without a steady income, she says, it has been impossible to make the $700 monthly payments on her $40,000 in loans. Nor has she been able to consolidate the loans or negotiate more favorable terms with Sallie Mae.
Every time she deferred a payment on the three loans, Sallie Mae slapped her with a $50 forbearance fee for each loan.
“That may not sound like a lot of money to some,” she said. “But for me, with no parents, struggling to get by without a job and not receiving any unemployment, that’s a lot of money.” Because of the compounding effect of the interest rate on the unpaid portion of her loan and related penalties, Gray says, her original $40,000 loan has grown to $65,000.
Early in February, Sallie Mae announced it was changing how it would handle the $50 fee. The company declined to end the penalty, but said it would apply the money toward the borrower’s loan balance after six consecutive on-time payments. Sallie Mae originated $2.7 billion in private loans in 2011 alone, or about a third of all private student loans.
“The economy poses a significant challenge, but the overwhelming majority of our customers are successful in managing their obligations,” Sallie Mae spokesperson Patricia Christel said. “Only 3.5 percent of our private education loans default, and no one benefits in that situation. That is why we work so diligently to reach customers and counsel them.”
Gray called the policy change a “partial victory.” Gray and other organizers met recently in Washington with Rep. Hansen Clarke (D-Mich.) to enlist his support against the Sallie Mae fee. Clarke has introduced a bill that would provide student loan forgiveness as a means of economic stimulus.
“They put me in a situation where either I pay this fee or I’m faced with default,” Gray said. “And if I default, I may never be able to buy a home at all, or rent an apartment again, or buy a car, or get a job, with employers checking credit when hiring. I think it’s ridiculous that I have to keep upholding credit card companies as much kinder to their debtors than [student loan] lenders.”
Because of changes in the federal law, it is almost impossible for a graduate or his family to discharge federal or private student loans through bankruptcy. Sallie Mae says it supports reform that would allow federal and private student loans to be dischargeable in bankruptcy for those who have made a good-faith effort to repay their student loans and still experience financial difficulty.
Pianin is Washington editor for the Fiscal Times, an independent news organization that provides original reporting and analysis on fiscal and economic matters.
Foreclosure whistleblower calls out big banks in Florida and wins $18 million settlement for victims
When Lynn Szymoniak was foreclosed on, she became suspicious of how foreclosures were being handled in her state of Florida and decided to do some investigating. It turned out she was right.Lynn's research proved that tens of thousands of foreclosure cases in Florida involved some kind of fraud. And exposing the truth has paid off - Lynn is receiving $18 million out of the $95 million settlement made with Bank of America, JPMorgan Chase, Wells Fargo and Citigroup.Learn more about how Szymoniak uncovered the robo-signing mortgage scheme and how it led to the $95 million settlement in this Huffington Post article (and watch the video of Lynn's appearance on 60 Minutes):
Lynn Szymoniak, Foreclosure Victim, Receives $18 Million For Investigating Mortgage Crisis
Look closely at the paperwork if you ever get foreclosed on. It could pay off.
That's what Lynn Szymoniak learned when her bank foreclosed on her Palm Beach Gardens home in 2008. Szymoniak, an attorney and renowned expert in foreclosure law, was suspicious of the way foreclosures were being conducted in Florida, so she started looking at documents. Eventually she made headlines when she found that the paperwork in tens of thousands of other foreclosure cases seemed to be fraudulent.
Now, as multiple sources have reported, Szymoniak is getting $18 million as a result of her investigative efforts -- part of a $95 million settlement paid out by Bank of America, JPMorgan Chase, Wells Fargo and Citigroup. That's just one component of the $25 billion mortgage settlement filed earlier this week on behalf of those four banks and Ally Financial.
Szymoniak, who is still fighting to win back her foreclosed home, according to CBS News, has become a very public face in the fight against robo-signing, the pervasive practice of banks falsifying mortgage paperwork and authorizing documents without reading them.
The robo-signing problem has proven a major handicap to the housing market, and, in an indirect way, the economy as a whole. In many states, foreclosure processing has slowed to a crawl as banks go back and review old paperwork, looking for evidence of misconduct.
That, in turn, has made it harder to move properties through the foreclosure pipeline and back on to the market -- meaning that housing prices are staying low, cash-strapped renters are getting squeezed out of places to live, and the broader economy still doesn't have much momentum.
When all is said and done, Szymoniak might prove to be the single biggest beneficiary of the $25 billion settlement, which will be divided amongst homeowners and federal and state governments.
About a million homeowners will supposedly get significant loan reductions as a result of the settlement, but for another 750,000 borrowers, the payout will only be about $2,000 at most. Millions more homeowners are excluded from the deal entirely because their loans are owned by Fannie Mae or Freddie Mac.
Some states have already announced plans to use the settlement funds to close up shortfalls in their budgets, rather than using the money to help homeowners directly.
Watch Lynn Szymoniak's appearance on 60 Minutes last year:
Who loves America AND spreading positive messages AND free stuff? You, American Dreamer!This morning we launched a campaign to make sure that EVERYONE has the opportunity to tell their friends, family, and neighbors about what true patriotism is: watching out for one another and making sure that the American dream is a reality for all Americans. That's really what "liberty and justice for all" means.You and I have seen our share of "cheap patriots" -- the ones who want to help the wealthiest Americans to shortchange America's government on tax day. The ones who sing "America the Beautiful" -- but do nothing to defend her beauty from big polluters. The ones who hide their bigotry behind the flag, rather than ensuring that all Americans receive the promises of life, liberty, and equal protection under the law.Follow this link to get your sticker, and thanks for being a true patriot.
Last week we debuted "America Underwater," a campaign to direct attention toward the crisis of underwater homes in America ("underwater" means they owe more than the home is worth). Along with the website, we put together an America Underwater Tumblr blog. We asked members with underwater mortgages to submit photos of themselves in front of their home, holding a sign that says how much their home is underwater. It's pretty compelling.Our teammate Megan put together this great 1-minute video that gives some really stark numbers. It really makes you think... what could Americans be doing if their homes weren't underwater?Check out the video:
Many of you helped Rebuild the Dream to fund a new kind of campaign - Facebook ads directed at employees of Freddie Mac & JP Morgan Chase, to let them know just what kind of policies their companies support. Freddie Mac & JP Morgan Chase have been persistently trying to evict marine veteran Arturo de los Santos, his wife, and their four kids. Arturo is willing to make his payments, but Freddie Mac would rather spend thousands on expensive court proceedings than let him keep his home. Rebuild the Dream and ACCE have been supporting Arturo in waging a public campaign to save his home.So far, the ads have been seen 11,877 times! They've also been covered on Huffington Post's ProPublica , Tech President, and Mashable. Thanks to all of you who made them possible! Check out this clip from Huffington Post:
How to Win FB Friends and Influence People
"Instead of picketing outside company headquarters, an advocacy group is using Facebook ads to try to influence people whose profiles identify them as employees of Freddie Mac or JPMorgan Chase.
The anti-foreclosure ad campaign, which launches today, asks Freddie and Chase employees to talk to their CEOs about a veteran -- a former Marine -- who's facing eviction in California.
The ad that targets Freddie Mac employees features a small picture of CEO Charles Haldeman's face, and the message, "Freddie Mac did what???? Freddie Mac is evicting a former Marine who's been trying to pay his mortgage. Tell CEO Haldeman to work out a fair deal with him!" according to a copy of the ad provided by Pugh.
The JPMorgan Chase ad is similar, but with a Chase logo instead of an executive's face..."And Tech President's interview with Rebuild the Dream CTO Jim Pugh:
Targeted Facebook Ads Latest Tool In Anti-Foreclosure Fight
"If you're a financial company you've gotten plenty of bad press, and you've developed a thick skin to some degree," Pugh told me.
The question, he said, is to find a novel approach that companies haven't already seen — something for which they haven't already developed a strategy.
"The idea of these ads is not to attack these employees," Pugh told me. "It's to inform them and say, 'Hey, look at these bad practices that the company that you're working for is engaged in.'"
By targeting the ads to people who list either company as their employer, Rebuild the Dream staffers hope to spend their advertising dollars more efficiently.
"This is kind of like setting up a protest in front of their headquarters," Pugh said. "This is a tactic that's going to be aimed at their employees there — aimed at doing so online."
Hi everyone!We recently ran a petition telling Congress "Don't Double Student Loan Rates!" -- in July, the plan that allows students to borrow subsidized Stafford loans at a 3.4% interest rate is set to expire, shooting the rate back up to 6.8.%. This would affect almost 8 million borrowers, and in some cases force students to pay up to $5,000 more over the course of their repayment.That's absolutely insane.Along with US PIRG, Campus Progress, and US Student Association, we gathered over 130,000 letters to Congress and then delivered them yesterday with some great student advocates. Rep. Courtney (D-CT) and Sen. Reed (D-RI) -- the two authors of the bill that cut the interest rate -- also spoke, so it was great to have their support.Here are some photos![caption id="attachment_4636" align="aligncenter" width="480" caption="A box of letters each for Pelosi, McConnell, Boehner and Reid."][/caption][caption id="attachment_4637" align="aligncenter" width="480" caption="Student partners getting ready to deliver the boxes!"][/caption][caption id="attachment_4638" align="aligncenter" width="500" caption="Press listening closely!"][/caption]The event got some great coverage, too:Stafford Loan Interest Rate Doubles, Students Petition Congress; Huffington PostStudents lobby to keep interest rates lower; CNNRate on Popular Student Loan About to Double; CBS
Rebuild the Dream is going to continue fighting to make sure that interest on federal Stafford Loans don't double this July, when Congress will have a vote to determine whether the rates go from 3.4% to 6.8%.If the rates go to 6.8%, those who owe money on their student loans could end up paying as much as $5000 more annually. We think that's robbery. Check out this email from CEO Natalie Foster:
- We'll mobilize people burdened by student loan debt -- including students and people in their 20s, 30s, and beyond. We will create an American Dream Corps of leaders who will organize, mobilize, and make their voices heard until Congress does the right thing.
- We'll turn the heat up on Congress. First, we will support Rebuild the Dream members as they educate members of Congress about student loans -- especially in districts for members of the education committee.
- We'll make sure more people hear about this big fee increase on student loan debtors with new online and offline advertising, short video documentaries, and with Facebook and other technology.
- We'll organize a National Day of Action this summer to make sure that Congress and the media can't ignore this issue or student loan debtors.
Huffington Post liked our America Underwater photo blog so much that they're partnering with us and New Bottom Line to promote it on their website and collect more stories from underwater homeowners. Check out their page and slideshow!
"What does it mean to be an underwater homeowner?
"I paid $245,00 and now [my home] is worth $117,000," writes a senior citizen living in Phoenix, Ariz. "I will have to work until I am 95 to pay off my loan," writes another homeowner.
These are the stories that some Americans are sharing on a new Tumblr blog called America Underwater, which aims to chronicle the lives of people who are living in homes that have radically declined in value. These people now owe more on their mortgage than their homes are worth.
The Tumblr was launched this week by two advocacy groups: The New Bottom Line and Rebuild the Dream. Both are calling on President Obama to fire Federal Housing Finance Agency Acting Director Edward DeMarco. They recently launched a Tumblr blog, America Underwater, to bring faces to the housing crisis. The site invites readers to share photos and stories of how they're being affected by their underwater homes.
As the country still struggles with the fallout from the financial crisis, increasing numbers are finding themselves in this position. Nearly a quarter of homes with a mortgage were underwater at the end of 2011.
We've teamed up with the New Bottom Line and Rebuild the Dream to solicit your stories. Please view the slideshow below, and if you're one of the 11 million Americans who are underwater, tell us."