[Occupymendocino] eminent domain in Irvington

[ELLEN ROSSER]

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New Jersey town vows to rescue foreclosed homeowners
by E. Tammy Kim <http://america.aljazeera.com/profiles/k/e-tammy-kim.html>

@etammykim <http://www.twitter.com/etammykim>

November 16, 2013  9:00PM ET
Irvington may become second US city to use eminent domain to fight
foreclosures
Topics: Housing<http://america.aljazeera.com/topics/topic/issue/housing.html>
 U.S. <http://america.aljazeera.com/topics/topic/categories/us.html> Bank
of America<http://america.aljazeera.com/topics/topic/organization/bank-of-america.html>
<http://america.aljazeera.com/articles/2013/11/16/new-jersey-town-vowstorescueforeclosedhomeowners.html#>
<http://america.aljazeera.com/articles/2013/11/16/new-jersey-town-vowstorescueforeclosedhomeowners.html#>
<http://america.aljazeera.com/articles/2013/11/16/new-jersey-town-vowstorescueforeclosedhomeowners.html#>
[image: Irvington, New Jersey home]
Irvington, N.J. homeowner facing foreclosure, Lavinia Curry (right), with
her daughter Paulette McQueen and two grandsons.E. Tammy Kim

IRVINGTON, N.J. — Their narrow, two-story house on Garwood Place, tan with
white trim, could use a fresh coat of paint and new plantings for the
sidewalk flowerbed. It sits in a quiet neighborhood not far from
Springfield Avenue, the retail thoroughfare connecting this working-class
township to nearby Newark.

Paulette McQueen, 60, and her mother Lavinia Curry, 86, have lived in this
house since 2003. “My mother always dreamed of having a home,” said
McQueen, a solidly built woman with blonde hair and dark brown skin. But
since 2010 their home has been a source of consternation as much as pride.

“We were one month behind, and I took [two payments] to Wells Fargo the
next month," said McQueen. "They told me they wouldn’t accept it. Ever
since then, they’re harassing my mother. They want me to sell her house.”

A new program, though, could provide McQueen and Curry some relief. At a
press conference on Saturday, Irvington Mayor Wayne Smith announced the
township <https://www.irvington.net/>’s plan to “take” and revalue
foreclosed homes at market rates for the public’s benefit, using the legal
doctrine of “eminent domain.” Should the plan move forward, Irvington could
become the first municipality to seize and re-mortgage foreclosed
properties.

“When you hear (‘eminent domain’), you usually think of people being talked
out of their homes (for corporate development), but what we’re trying to do
is recast it so that people can stay in their homes,” said Smith.
Experiment and backlash

It’s a strategy spreading to cities and towns across the country. In late
July, for example, Richmond,
Calif.<http://www.nytimes.com/2013/07/30/business/in-a-shift-eminent-domain-saves-homes.html>
made
national news when it notified a group of banks that, barring their
renegotiation of existing mortgages, the city would consider taking
foreclosed properties by eminent domain.

Richmond did not intend to become the owner of these homes. Rather, it
would oversee assessments of market value and then turn over the homes to
financial partners willing to issue new, lower-cost mortgages to
homeowners. But the policy has since been embroiled in litigation by banks
opposed to the idea. Consequently, no foreclosed homes have yet been taken
by eminent domain — in Richmond or anywhere else.

The federal government, banks and trade groups like the Mortgage Bankers
Association allege that the use of eminent domain to take homes violates
the rights of homeowners and deprives investors of properties' fair market
value. (Neither Bank of America <https://www.bankofamerica.com/> nor the
Mortgage Bankers Association wished to comment on this story.)

In an August 2013 memorandum, the Federal Housing Finance
Agency<http://www.fhfa.gov/webfiles/25419/FHFAStmtEminentDomain080813.pdf>
stated
that “the use of eminent domain to restructure existing financial contracts
… presents a clear threat to the safe and sound operations of Fannie Mae,
Freddie Mac and the Federal Home Loan Banks.” It vowed to pursue legal
challenges and “take such other actions as may be appropriate to respond to
market uncertainty or increased costs created by any movement to put in
place such programs.”

Nevertheless, Irvington officials hope to take and re-mortgage at least 500
to 1,000 of the 1,800 homes that have been foreclosed on during the housing
crisis. During the worst of the foreclosure epidemic in 2009, Essex County
— which includes Newark and Irvington — had the region’s highest
concentration of foreclosed homes.
[image: mp]
Supporters of the eminent domain plan protest foreclosures in front of
Wells Fargo's Irvington branch.E. Tammy Kim

Irvington’s plan would target foreclosures linked to “private-label
securities” (PLS), a high-risk class of mortgage-backed securities.
Homeowners whose mortgages form the basis of PLS transactions often do not
know which companies own or have the power to make decisions about their
mortgages.

“These days, mortgages are cut up and sliced up," said Udi Offer, executive
director of the ACLU of New Jersey <http://www.aclu-nj.org/>, a supporter
of the Irvington plan. "There are so many owners that it’s impossible to
get everyone in a room about principal reduction.”

This is why, supporters say, so many cities — including San Francisco,
Oakland, Pomona, Sacramento, Newark and New York City — are contemplating
an approach to eminent domain that resembles Irvington's. The legal basis
of using the doctrine is “crystal clear,” said Anika Singh Lemar, visiting
clinical professor at Yale Law
School<http://www.law.yale.edu/faculty/ALemar.htm>,
but “the tougher question is whether it’s a public use. There has to be an
inquiry about whether, in a particular neighborhood, amelioration of blight
would qualify.” In places like Irvington, Newark and Detroit, residents
have seen a correlation between mass foreclosures and crime, drugs and
fires.

Questions of reach and efficacy also remain. The eminent domain proposals
to date would not cover all foreclosed homes, leaving some needy homeowners
without recourse. In Irvington, for example, only about 10 percent of
mortgages would be eligible based on the criteria set by potential
financing institutions.

“The right way to use these sorts of programs is to buy mortgages in low-
and middle-income programs that are at risk of being blighted, but if you
have a profit-making motive, you won’t necessarily pick up those loans,”
Singh Lemar said. Re-mortgaging via eminent domain, she said, is akin to
yet much more complicated than the Rolling
Jubilee<http://rollingjubilee.org/> debt-cancellation
project of Occupy Wall Street, which has purchased and “abolished” nearly
$15 million of consumer debt.

>From credit cards to home loans, banks have targeted low-income people of
color for toxic products, according to the non-profit group New Jersey
Communities United <http://unitednj.nationbuilder.com/>. In Irvington,
whose population is 85 percent African American, consumer issues resonate
in racial-justice terms.

“They know we’re poor, and they’re taking advantage of us,” said McQueen,
the Irvington resident who lives with her elderly mother. “The neighborhood
we live in, nobody gives a damn because it’s black, Spanish, Haitian and
Jamaican. They put us in situations where, at the time, it’s presentable,
but when we go to talk to them, they aren’t willing to help.”

In a few weeks’ time — should Irvington find the right financial partners
and escape a federal lawsuit — McQueen may get some help from her township
instead.
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