Bernero, Democrats push for action on foreclosure crisis

HOLT — Lansing Mayor Virg Bernero, the Democratic nominee for governor, has launched a multipronged attack on the state’s foreclosure crisis.

On Friday, Bernero held a press conference at the home of Bill Krieger. Krieger is an Iraq War vet who found himself staring down the short end of a mortgage foreclosure error with JPMorgan Chase. Krieger, whose wife and son are currently serving in Iraq, said that his family had not missed a single payment, but still faced a foreclosure proceeding from Chase. That is until he hired an attorney.

But even after getting legal representation and having the company admit the error, Krieger discovered that Chase had inappropriately recorded the foreclosure proceedings to the credit agencies, destroying his credit. Krieger only found out about the credit reporting when he went to purchase a new car.

“I’ve done everything I can think of to get this situation with Chase straightened out,” said Krieger. “I’ve spent hours on the phone, I’ve been told three different times the issue has been resolved, but here we stand. I’ve worked hard and never missed a payment and I still have to deal with this. I’m grateful that Virg is standing up to Wall Street banks to fight for what’s right.”

During the press conference, Bernero renewed his call for a foreclosure moratorium. He has been calling for such action since April of last year.

“Wall Street Banks are putting 600 Michigan families out of their homes every day, many based on mistakes or fraud,” said Bernero. “The foreclosure tsunami is a driving force bringing down home values for everyone across the state. Michigan’s economic problems are not going to magically evaporate — we have to stand up for ourselves.”

Krieger is not alone in his battle with JPMorgan Chase. On Friday Michigan Messenger reported on the case of Melody Stratton, also of Lansing.

On Monday, Bernero put the pressure on Bank of America by holding a press conference at the Renaissance Center in Detroit. There, he and Detroit-area homeowner Lory Park demanded Bank of America produce the mortgage note on which Park’s recent foreclosure was based.

Bank of America and JPMorgan Chase have both been implicated in a national scandal over “robosigners” in which people for the banks signed off on foreclosure notices without reviewing the necessary documents. That has lead to an investigation by several parts of Michigan’s government, including the Attorney General’s office as well as the Office of Insurance and Financial Regulation.

The Bernero campaign said the company could not produce the requested document.

“In their rush to profit by turning mortgages into investment instruments, Wall Street banks got incredibly sloppy with records and systems,” said Bernero. “Their greed-induced haste has led them to erroneously threaten foreclosure on families that have never missed a payment. Banks should halt foreclosures at least until they can prove they have their systems in order enough to tell every homeowner who now holds their mortgage. This would reduce the number of foreclosure threats banks are issuing to families who haven’t done anything wrong.”

Bernero staffers have acknowledged that the mayor is considering asking the City Attorney of Lansing to seek an injunction against banks moving to foreclose on properties in Lansing. No decision has been made on that tactic. Brigham Smith, the city attorney, recently filed suit against several large pharmacies to recoup costs associated with the city’s insurance program.

Republican candidate for Governor Rick Snyder doesn’t support a moratorium, says Bill Nowling, spokesperson for the campaign.

“We have to go after the bad actors,” Nowling said. “We have to make it clear what the rights are for the borrowers.”

Nowling said the most direct way to address the foreclosure crisis would be to get the economy working again.

Democratic nominee for Attorney General, David Leyton, has also gotten into the game in relation to the foreclosure crisis.

“As attorney general, I will thoroughly investigate unscrupulous lenders and make sure banks and other lending institutions are following the law and playing by the rules. I will demand refunds for consumers when banks or other lending institutions charge hidden fees or mislead consumers on the nature of their loans,” said Leyton in an email to Michigan Messenger. “A good portion of the housing market mess can be attributed to the vast deregulation that Bill Schuette supported while he was in Congress, including voting for the massive bailout of the savings and loan industry. As attorney general, I will side with regular families, not predatory lenders and Wall Street CEOs, as Bill Schuette has done time and time again.”

Rusty Hills, spokesperson for the Schuette campaign, did not return phone calls or emails seeking comment for this story.

Todd Cook, Leyton’s campaign manager, also raised the red flag about donations to the Schuette campaign by David Trott and his wife, Kathleen. Trott and Trott is the state’s largest mortgage foreclosure law firm. Both Trotts donated $3,400 to Schuette’s campaign, the maximum amount allowed under law.

“In their endorsement of David today, the Detroit Free Press questioned Schuette’s ability to be independent in light of his campaign being awash in corporate campaign contributions,” said Cook in an email. “Clearly, contributions from the owners of the state’s largest foreclosure law firm continues that disturbing pattern of behavior at a time when Michigan families are facing a record level of foreclosures.”

Mike Cox, the current Republican Attorney General, has been widely criticized for his receipt of thousands of dollars from the Trotts over the years. Some point to his lack of action on mortgage fraud cases referred to his office by OFIR as proof that Cox is being influenced by Trott. David served as the chair of Cox’s finance committee in Cox’s failed bid to become the Republican nominee for governor.

The Trotts have also donated thousands of dollars to Republican causes and candidates over the years, including Republican candidate for governor Rick Snyder. Trott has also been engaged in writing legislation to reshape Michigan’s foreclosure laws, Michigan Messenger has previously reported.

Some experts in foreclosure say a full moratorium would freeze Michigan’s access to credit. The state did do a two year moratorium at the height of the Great Depression.

“To be honest no [I don’t support a moratorium],” Tammy Farnum, director of special projects at the Franklin Street Housing Corporation told Michigan Messenger last week. “The problem is if you slap a moratorium out there, it would cause our financial system to collapse.”

Bernero challenged that view in his Friday press conference in Holt.

“I would certainly disagree with her,” Bernero said when asked about Farnum’s take on the moratorium. “I understand these are are some scare tactics.”