Irvington, NJ – A municipal hearing on foreclosure was held here, July 10. The main emphasis was placed where it belongs: on the testimony of distressed homeowners themselves. The council chambers were packed.

Public discussion of foreclosure is usually confined to government and banks, experts and government, etc. That won’t work because it leaves out the power of the people. The mortgage wreck is a systematic fraud against homeowners by the banks.

Esmay Parchment bought her home in Irvington in 2004. At the time sales and turnover were everything in the housing market. Price fixing by the banks was universal. Speculators flipped houses every day to rake off profits from zooming prices. Huge closing fees were to be had by realtors.

Parchment’s realtor prevented her from looking at the basement of the home she bought, which had problems. The city inspector’s report made no mention of major defects of the roof. Her attorney alerted her to none of these dangers.

Then the mortgage market began its collapse, and the economy went into crisis. Nonetheless Ms. Parchment paid her mortgage every month plus an extra $1000 for early principal reduction.

In 2009 she applied for a mortgage modification. The servicer took her package of documents and did nothing, only to ask months later that she re-apply. The runaround happened repeatedly. Millions of homeowners have had the same experience with the Obama administration’s Home Affordable Mortgage Program (HAMP). It was a scam to allow banks to string homeowners along so that millions of foreclosure filings would not hit the courts all at once.

In 2012 Parchment had serious health issues. Appealing to the mortgage servicer for help, she was told, “The bank is in business to make money.” A little later she was told she would receive no modification. Currently her house is valued at half what she paid for it, but she holds 60% of equity against the price she paid. If there were any such thing as justice she would gain full ownership plus a 20% rebate of current value, based on the fraudulent original pricing.

Earlier this year she began to attend meetings of the Coalition to Save Our Homes. “Then I realized I was not the only one,” she said to a storm of applause.

Linda E. Fisher of Seton Hall Law School had earlier told the assembly of the “mind-boggling level of fraud” by mortgage bubble lenders. They made loans they knew borrowers could never repay. Brokers falsified mortgage applications; falsified documents were submitted in closings: mortgage security trustees cannot verify that they own mortgage notes. Court rulings favorable to homeowners have shown fraud.

Mortgage securities investigator Laura Walsh went even further. She charged that trustees never verified that mortgages allegedly belonging to securities issues were actually held by them. She charged that many mortgage based securities contain no mortgages at all. Many are held by retirement funds. Retirees might think there is $100 million in a mortgage fund for their pensions but there is nothing there. “We want people to be held accountable,” she said, calling for enforcement of securities laws.

Homeowner Michael Spruill said mortgage bust terminology deals with water – banks get bailouts, mortgages are under water. “They sucked money out of our community and poured it back on us,” he said. “If nothing is done they will continue sucking that money out of us. The same people are investing in prisons while schools are being closed. They don’t want to educate us. If you are educated you understand the government has responsibility – deregulation allowed it all to happen.”

Irvington Township Councilman David Lyons replied, “When a banker, a respected member of the community, tells you that you can afford a home you believe him. But he’s no more than a thug. If a thug on the street took your money he’d be in jail.”

Cynthia Johnson talked of a high note of homeowner resistance last year when many individuals joined and picketed at her mother’s house in Orange on the day she was scheduled for eviction, forcing a postponement. After that, ongoing people’s struggle forced giant JP Morgan Chase to admit it had no financial interest in the house. Johnson said her mother had been subjected to so much stress she still won’t leave home for fear she will not be able to get in when she returns. Speaking of local officials, she said “Leaders should step up and be leaders. If they empty out the cities nothing will be left.”

The Irvington Municipal Council had passed a resolution the day before that included a list of action items to address the mortgage crisis, appended below. The resolution was read aloud at the end of the assembly, in an inspiring atmosphere of people’s unity.

The meeting was sponsored and organized by a range of grassroots people’s organizations including the Coalition to Save Our Homes, NJ Communities United, the Irvington Branch of the NAACP and the People’s Organization for Progress.

Big financial corporations are the dominant institutions of United States society. Government and regulators are controlled by them. Their unquenchable thirst for profits is swallowing the means to meet every human need. But they have a weakness: a great many people hate them. The hearing showed that when people come together in a united effort to oppose them the struggle can indeed surge upward. What happened in Irvington can happen in virtually any community in the United States.

The action items of the municipal resolution are as follows:

• There must be federal and state criminal investigations of lender wrongdoing in the housing bubble. • County prosecutors must investigate wrongful lender claims of foreclosure standing for possible criminal violations. • There must be comprehensive and uncompensated write-downs of overvalued mortgage bubble principles to reflect the true market values of homes. • Eminent domain must be used as a tool for mortgage principal reduction. • Bring mass pressure for an Essex County moratorium on foreclosure evictions until mortgage principals are reduced to true market value. • The County needs to put procedures in place to determine whether or not plaintiffs hold a valid interest before foreclosures can proceed in court. • The State of New Jersey must make more timely allocation of funds for homeowner assistance. • Enforce Irvington's vacant property ordinance to bring much-needed revenue to local coffers and offset the negative budget impacts of the foreclosure crisis. • Bring a class action suit on behalf of homeowners against the banks. • Congress must speedily approve an appointee to head the FHFA, which holds Fannie Mae in receivership, who will proceed to write mortgage principals down according to Pres. Obama’s directive.

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