Occupy protests take banks battle to US home front

Q: What are the "Occupy Our Homes" protests and why should investors care?

The Occupy Our Homes events are a series of direct actions in more than 20 U.S. cities (including Oakland, San Francisco and San Jose) where protesters reclaim foreclosed properties, interrupt foreclosure auctions and pressure banks over lending practices. Everyday investors should care because these protests highlight large-scale foreclosure issues, public scrutiny of banks and potential regulatory or political responses that can affect bank reputations and financial-sector policy.

PROTESTERS have "reclaimed" foreclosed properties, shouted down foreclosure auctions and waved banners outside banks as part of a nationwide day of action by the Occupy movement to draw attention to the plight of home owners.

By InvestSMART · 8 Dec 2011

By InvestSMART ·
8 Dec 2011

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"The basic message of the 99 per cent is that everybody deserves a place to stay, everybody deserves a place they can afford," said James Vann, an Oakland architect.

Vann was holding a protest sign on the steps of the Alameda County Courthouse while about 40 protesters chanting, "Shame on you!" surrounded auctioneers attempting to sell off homes in arrears.

"The courthouse steps are a dramatic, shameful place where a home is passed by anonymous people to anonymous people," said Tony Wilkinson, a retired warehouse worker who lives in Berkeley. "Each one of these transactions represents a family and lives. This may be legal, but it's criminal."

The "Occupy Our Homes" events, a series of direct actions and gatherings held in more than 20 cities across the country, including Oakland, San Francisco and San Jose, represent a new phase for the Occupy movement.

It came as demonstrators marched on Capitol Hill to occupy the offices of members of Congress in Washington, DC.

Occupy encampments locally and nationally were recently evicted by city governments. Now, in claiming common ground with home owners facing foreclosure and challenging big banks on their lending practices, the movement is focusing on an issue that highlights economic inequality.

More than 6 million homes have been seized by banks since 2007 and another 8 million are likely to undergo foreclosure over the next four years, according to a report by Michelle Meyer, Bank of America Merrill Lynch senior US economist.

The Obama administration's attempts to address foreclosures through voluntary programs for banks to reduce mortgage payments have helped only a fraction of struggling home owners, according to banking regulators.

But President Barack Obama has picked up on the protesters' message, venturing into the conservative heartland of Kansas to deliver his most pointed appeal yet for taxes and regulations to level the playing field.

"This country succeeds when everyone gets a fair shot, when everyone does their fair share, and when everyone plays by the same rules," he told a crowd packed into a school gymnasium.

Mr Obama warned growing income inequality was undermining the middle class. He said it "gives lie to the promise that's at the very heart of America: that this is the place where you can make it if you try".

"At stake is whether this will be a country where working people can earn enough to raise a family, build a modest savings, own a home and secure their retirement," Mr Obama said.

It was the President's third trip out of Washington in three weeks to press for passage of the payroll tax break set to expire next month. Under the Democratic proposal, which Republicans have blocked, the cut that would go to most working Americans would be offset by a surtax on people earning more than $US1 million a year.

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Frequently Asked Questions about this Article…

What are the "Occupy Our Homes" protests and why should investors care?

The "Occupy Our Homes" events are a series of direct actions in more than 20 U.S. cities (including Oakland, San Francisco and San Jose) where protesters reclaim foreclosed properties, interrupt foreclosure auctions and pressure banks over lending practices. Everyday investors should care because these protests highlight large-scale foreclosure issues, public scrutiny of banks and potential regulatory or political responses that can affect bank reputations and financial-sector policy.

How are protesters targeting banks and foreclosure auctions?

Protesters have reclaimed foreclosed homes, shouted down foreclosure auctions, surrounded auctioneers (for example at the Alameda County Courthouse) and staged demonstrations outside bank branches. The tactics are aimed at drawing attention to homeowners in arrears and challenging the way banks handle foreclosures and lending.

How severe is the foreclosure problem described in the article?

According to a report cited in the article by Michelle Meyer, a Bank of America Merrill Lynch senior US economist, more than 6 million homes have been seized by banks since 2007 and another 8 million are likely to undergo foreclosure over the next four years. The article presents this as a significant and ongoing issue for homeowners and the housing market.

Have government programs helped struggling homeowners facing foreclosure?

The article notes that the Obama administration's voluntary programs asking banks to reduce mortgage payments have helped only a fraction of struggling homeowners, according to banking regulators. That suggests many homeowners remained exposed despite the initiatives described.

Could the Occupy protests lead to policy changes that affect investors?

The article reports that President Obama has echoed protesters' concerns about inequality and has pushed for taxes and regulations to 'level the playing field.' It also mentions a high-profile debate over a payroll tax break and proposals to offset cuts with a surtax on very high earners. Such political attention indicates protests can contribute to policy conversations that may affect markets and regulation, although the article does not predict specific outcomes.

What implications do rising foreclosure numbers have for the housing market and investors?

Large numbers of foreclosures can weigh on local housing markets, affect home prices and highlight credit risk for lenders. For investors, the article implies it’s important to pay attention to foreclosure trends and how banks and regulators respond, since those factors influence financial-sector stability and housing-related investments.

How are protesters framing the foreclosure issue, and what messages might resonate with voters or regulators?

Protesters frame the foreclosure crisis as a matter of fairness and housing as a basic need—messages like 'everybody deserves a place to stay' and criticism of anonymous courthouse transactions that affect families. Those narratives have reached political leaders and may influence public opinion, regulatory scrutiny and policy discussions about lending practices and inequality.

What practical steps can everyday investors take to stay informed about foreclosure risk and bank exposure?

Based on the article’s themes, everyday investors can monitor foreclosure statistics and reports (such as the economist report cited), follow banking regulator updates on the effectiveness of relief programs, watch policy debates on taxes and regulation, and pay attention to bank disclosures about mortgage losses and lending practices. Staying informed about local auction activity and national trends helps investors assess housing-market and bank-credit risks.