[GPSCC-chat] Fw: Why Wall Street Is Very, Very Angry at Richmond, California, Right Now

[Caroline Yacoub]

----- Forwarded Message -----
From: shane que hee <squehee at ucla.edu>
To: 
Sent: Friday, September 13, 2013 12:31 PM
Subject: Why Wall Street Is Very, Very Angry at Richmond, California,  Right Now
  


Date: Fri, 13 Sep 2013 00:35:50
-0700
>Subject: Why Wall Street Is Very, Very Angry at Richmond, California,
Right Now
>From: Thomas Scott Tucker <scott at tstucker.com>
>
>Richmond, Califonia's Mayor Has a Name and a Political History
>
>Readers of Open Letter,
>
>The article below is good, but would have been better if it had contained
at least a sentence about the life and work of Gayle McLaughlin, the
mayor of Richmond, California who is indeed a member of the Green Party.
The writer of the article does mention the mayor's partisan affiliation,
but does not mention her name, or give any other information on
McLaughlin.
>
>Solidarity,
>
>Scott Tucker
>
>=======================
>
>Gayle McLaughlin, Wikipedia:
>
>http://en.wikipedia.org/wiki/Gayle_McLaughlin.
>
>Gayle McLaughlin (born 1952 in Chicago,
Illinois) is a California politician. She is a member of the Green Party and, since 2006, the mayor of Richmond,
California. McLaughlin was elected on November 7, 2006 by a
242-vote[1] margin over incumbent mayor Irma A.
Anderson .[2] Richmond is, as of 2009, the largest city in the country
with a Green Party
mayor.[3]
>
>McLaughlin is a social activist who has participated in the peace, social justice, civil rights, and environmental movements. She holds a Bachelor of Science degree in psychology, with
graduate study in psychology and education.
>
>She was first elected to the City Council in 2004, winning one of five
open seats, with 11,191 votes or 10% in
2004.[4] She has lived in Richmond since
2001.[5]
>
>McLaughlin was born into a working class union family. She
is the middle child of five daughters born to a unionized carpenter and a
housewife.
>
>During the 1980s, McLaughlin was an activist with the Central
American solidarity movement and a steering committee member of CISPES (Committee In
Solidarity with the People of El Salvador). She also played an active
role in the North Star Network, a national networking effort to unite
progressives, and in coalition-building
efforts with Rainbow/PUSH.
>
>McLaughlin graduated summa cum
laude from Bridgewater State College in Massachusetts. She continued her
education with two years of graduate study in psychology at Rhode Island
College, with additional graduate study in education at U.C. Berkeley Extension.
>
>McLaughlin has worked as a postal clerk, teacher, caregiver for the
elderly, and tutor/clinician for children with learning
disabilities. She has also worked in the capacity of support staff
for various not-for-profit health and educational
organizations.[6]
>
>================================
>
>
>Why Wall Street Is Very, Very Angry at Richmond, California, Right
Now
>
>Emily
Badger
>Sep 11, 2013 http://www.theatlanticcities.com/housing/2013/09/why-wall-street-very-very-angry-richmond-california-today/6858/ 
>
>Very early Wednesday morning, the city council in Richmond, California,
narrowly voted to move forward with a plan to aid underwater homeowners. It's a plan so
controversial that everyone from Wall Street investment banks, to the
National Association of Realtors, to U.S. congressmen, to state
politicians, to the Federal Housing Finance Agency has weighed
in.
>
>Five years into the housing crisis, the city of about 105,000 and its
Green Party mayor figure they've run out of better options – and out of
patience with federal solutions that never came – to ease the local
foreclosure glut. The median price of homes in town has dropped to less
than half of what it was at the height of the housing boom. And the city
has estimated that about 51
percent of its homeowners are underwater. Richmond is in worse shape
than most towns sacked by the housing bubble: Its home values are low,
its unemployment and poverty rates are high, and its residents in danger
of foreclosure are unlikely to have the principal on their mortgages
reduced any time soon.
>
>In this position, Richmond has now become the only municipality in the
country to seriously consider using eminent domain to seize underwater mortgages from the investors
who currently hold them. The city would not seize the properties
themselves – as more typically happens in eminent domain cases – but
would use the power to essentially purchase the mortgages at their
current market value (against the wishes of the banks that hold
them).
>
>A company called Mortgage
Resolution Partners would help the city fund and manage the
purchases, ultimately selling the restructured mortgages to new investors
at rates that would keep the current residents in their homes.
>
>So far, every other local government that's been tempted by this idea has
ultimately abandoned it.
>
>The scheme, Mother Jones  wrote earlier this year, "is almost as complicated as the
derivatives and collateralized debt obligations that caused this mess to
begin with."
>
>But the idea at its core is relatively simple: Richmond sent letters to
the banks and investors currently holding 624 mortgage notes on homes in
the city, asking to buy them at current market value. The banks said no.
Now the city hopes to purchase them anyway, citing a government power
more commonly wielded to take private property for constructing public
infrastructure like highways.
>
>Mortgage Resolution Partners has been pitching the proposal to distressed
cities for more than a year. But, so far, every other local government
that's been tempted by the idea has ultimately abandoned it in the face of growing pressure from the
banking industry, realtor groups and even the federal
government.
>
>Both Mother Jones and Wonkblog have good summaries of where this fight stood on the
eve of Tuesday night's city council meeting (which dragged into the early
hours of this morning). In short: Banks and the securities industry have
threatened that no one will give credit to cities that show they're
willing to seize property like this. And the Federal Housing Finance
Agency has said it may take legal action against cities that try the tactic and stop
lending to would-be homeowners who live there.
>
>The whole proposal is a little hard to wrap your head around because some
of the actors appear to be playing for the wrong team. Mortgage
Resolution Partners is not a non-profit community group. It's a business run by people who've worked in the banking and real estate worlds. This housing story
is not quite David vs. Goliath. It's David and some savvy investors
formerly associated with Goliath vs. Goliath.
>
>The angry industries involved have leveraged that plot line to their
benefit, casting the eminent domain proposal as something that sounds
like a Wall Street (or government, depending on your point of view) land
grab, not an attempt to rescue homeowners. A flier distributed in
Richmond by a local realtor's association opposed to the idea warns
residents "Don't let Wall Street take another bite out of Richmond
homes." Legislation proposed last year in Congress that would
have stymied the idea was called the Defending American Taxpayers from Abusive Government Takings
Act.
>
>As with the housing boom itself, it's easy to see how the local
homeowners here might have a hard time sorting out their own best
interests. Seemingly everyone has lined up against a plan the mayor
believes is best for Richmond's residents. And that plan also passed the
city council by a vote of just 4-3.
>
>Then again, just because everyone else has refused to try this doesn't
mean it's not a good idea.
>
>Top image: Flickr user BasicGov.
> 
> 
>************************************************
> 
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.cagreens.org/pipermail/sosfbay-discuss_lists.cagreens.org/attachments/20130916/628b163f/attachment.html>