East Orange tries to stop sale of local home mortgages

EAST ORANGE, NJ — Elected officials stood shoulder-to-shoulder on the steps of City Hall in East Orange on Thursday, Feb. 4, along with HANDS Inc.; New Jersey Communities United, a home mortgage and housing advocacy group; Valley Arts Executive Director Patrick Morrissy, and some of the city’s struggling homeowners, to demand that banks holding local mortgages stop selling them to Wall Street.

“I’m joining with colleagues and community leaders from across the country in calling on Fannie Mae to stop contributing to the problem,” 1st Ward Councilman Chris James said Thursday, Feb. 4. “Instead, Fannie Mae should be working with local leaders to develop strategies that help stabilize our neighborhoods. In the coming weeks, the city of East Orange will consider a motion before City Council, calling on our federal housing agencies to do what’s right for our communities and our residents.”

Morrissy agreed with this idea, saying he knows from his experience redeveloping parts of the Valley section of Orange that the grassroots cooperative efforts James and East Orange Mayor Lester Taylor are advocating for can work.

“We know that what NJCU is calling for today works and we have a perfect example here in New Jersey, with NJ Community Capital, a community-development financial institution that’s doing just that,” Morrissy said Thursday, Feb. 4. “That is, buying mortgages and keeping people in their homes or, if the houses are vacant, redeveloping those houses for affordable home ownership. This is a sensible alternative to selling off those mortgages to speculators.”

Patrick Reid of the East Orange Chamber of Commerce and the Jamaican Organization of New Jersey said, as a Realtor and someone who immigrated to the United States in search of a better life, the “American Dream” seems to be turning into a nightmare, with Wall Street profiteering from the sales of subprime mortgages and scammers’ short-term approach to capitalism.

“I go through a daily routine of trying to help folks do short sales and some of them need modifications and the challenges that we go through with the banks are just immense — really, really immense,” Reid said Thursday, Feb. 4. “There’s a lot of red tape. And the saddest part of it is that you’re dealing with someone who’s losing their home. That’s not American. The American Dream is a home with a white picket fence, and a dog and two-and-a-half kids and, right now, it’s gone out the window. And I think, at this time, we need our legislators to get back that American Dream that we all work hard for.”

Trina Scordo, the executive director of New Jersey Communities United agreed with Reid, saying she is partnering with the city’s elected officials in an effort to keep homeowners in their homes, despite fluctuations in the economy and speculation by Wall Street profiteers.

“There was a major violation of the public trust that led to the Great Recession,” Scordo said Thursday, Feb. 4. “Probably the only type of wealth that working-class communities really can invest in is a home. … I want to trust the person who is brokering this deal for me and telling me, ‘yeah, sign, it’s a good deal.’

“The financial institutions were not truthful. When people asked questions, when people said, ‘What happens if the interest rate goes too high or my financial situation changes?’ the answer was often, ‘Don’t worry; we can refinance.’ And when the crisis happened and the crash hit and those families went back to the banks and said, ‘I really need you to work with me to refinance,’ they said, they couldn’t do it. They said those same customers no longer qualified. That was part of the scam that was perpetuated. This is not an individualized problem. This is a structural, collective problem that was perpetuated largely in communities of color.”

Scordo said, “We’re saying enough is enough.” She said NJCU believes the federal government has not taken a strong enough stance against the kind of scams that deceived and defrauded so many.

“We’re saying there are steps you can take to ensure that these homes stay in the hands of local communities. East Orange is not the only city speaking out on this issue today. There’s two other cities, New York City and Oakland, Calif. What we do as the next step is regroup and figure out how we can get the federal government engaged on this. That probably means going to Washington, D.C., because that’s where the decision makers are. We’re going to have to escalate this.”

The mayor said it’s not only a good idea, it’s good business, too. Taylor said that keeping wealth and value “local” is one of the keys to fulfilling his vision for East Orange as a destination city that is a model for urban excellence.

“The foreclosure and mortgage crisis in New Jersey is the worst in the nation,” Taylor said Thursday, Feb. 4. “East Orange has taken this crisis very seriously and worked diligently to keep families in their homes and stabilize our hardest hit communities. The city of East Orange can build on our successes, but only if the federal agencies prioritize the sales of delinquent mortgages to local non-profit partners with a commitment to our residents and our communities. I want Fannie Mae to talk with our city and our nonprofit partners before selling off one more troubled mortgage to Wall Street.”