MESA, ARIZONA -- In Mesa, where home values have dropped by nearly 45 percent, it is not hard to find people whose mortgage is in trouble. At today's event, every attendee I spoke with was either close to foreclosure or in foreclosure or had a close friend or relative facing foreclosure. Eyes brimmed with tears, attendees described the bleak outlook of being uprooted from their homes, a common fate in the Valley of the Sun. Besides the obvious transition from pre-election rallies to stately policy talks, today's topic -- the foreclosure crisis -- was sobering for the Mesa crowd.
A local resident who asked not to be named said her mortgage company denied all of her requests to modify her home loan after she was laid off from the local power company. She filed for bankruptcy in October in what she calls "a desperate attempt" to save her home, but just days ago, a judge lifted the stay on the foreclosure at the request of her lender. He told her simply, "Start removing her things from the premises."
Marva from Chandler is worried that her daughter, a single mother who was laid off in December from Arizona State University, could soon lose her home to foreclosure. She hopes the administration's abatement plan will be available soon to keep a roof over her grandchildren. She believes that the stimulus plan and the foreclosure prevention program will eventually pay for themselves. "They've been cutting, cutting, cutting taxes all along, but it hasn't done a thing," she intoned sadly.
Another resident lost her home to foreclosure less than a year ago and is worried that she may be evicted from the home she now rents as the property owner slips into foreclosure. With a bitter edge to her voice, she says, "All I want is a stable home for my kids. That's all. We're anxious, but they should feel safe."
Arizona currently has the third highest foreclosure rate in the nation, and Mesa has been one of the hardest hit cities in the entire country. Around the edges of the valley, entire neighborhoods and communities have been devastated. In neighborhoods where large numbers of houses have been abandoned, it has become common for neighbors to organize groups to care for the lawn and facade of empty homes so that new homebuyers are not discouraged from buying in their neighborhoods.
According to Housing and Urban Development Secretary Shaun Donovan, who spoke to the press before the event, about 6 percent of Arizona mortgages either are in foreclosure or are more than 90 days behind today. Across the country, nearly 10 percent of mortgages are behind, and in December, close to half of home sales across the country were "distressed" sales. Donovan says he expects about 6 million more foreclosures over the next 3 years.
To stop the downward spiral of the real estate market, the Obama administration believes that most of those 6 million foreclosures must be avoided. The plan, as unveiled today, would:
(1) Allow 4-5 million mortgage holders of owner occupied homes to refinance their loans to take advantage of lower interest rates.
(2) Make it easier for (and provide incentives to) lenders to modify 3-4 million distressed loans that have not yet reached 60-90 days delinquency by writing down the principle or interest or both. Incentives would also be provided to borrowers whose participation is successful over time.
(3) The administration is supporting legislation that, if passed, would allow judges to write down the principle and/or interest of mortgages when mortgage holders file for bankruptcy.
(4) The administration will also be releasing new mortgage guidelines, which go into effect in 2 weeks that will standardize the mortgage loan process, including the appraisal process.
All institutions receiving TARP funding would be required to participate in these programs (1 and 2, above) and will be required to adhere to the new guidelines (3, above).
The timing of Obama's foreclosure plan comes just one day before Democratic Arizona lawmakers are scheduled to hold a press conference to discuss foreclosure abatement plans in the state legislature. State Representative Daniel Patterson (LD29-Tucson) is sponsoring a foreclosure relief plan that would grant a 60 day stay to homeowners facing foreclosure. Several other bills related to predatory lending or foreclosures are also under consideration by the legislature.
Several hundred local residents camped out overnight Sunday hoping to get tickets Monday morning for the speech. While 500 tickets were handed out, 200 still went home empty-handed. Several attendees proudly proclaimed their number in the ticket line, "I was number 64!"
Tuesday night, ticket holders camped out again hoping to grab the best seats Wednesday morning.
The atmosphere was more rancorous among non-ticketholders. Dueling groups of anti-Obama protesters and pro-Obama counter-protesters were setup in several "free speech zones" near the high school, and smaller groups were scattered across sidewalks and street corners for several blocks.
While many of the anti-Obama protesters waved signs at passersby expressing disapproval of the Obama administration's economic policy, handfuls of others brandished bizarre or offensive signs. One lone protester stood on a nearby freeway exit ramp with a sign that read, "Gimme 40 acres and a mule." (Two other protesters near the school had the same sign.)
A group of conspiracy theorists handed out bumper stickers to other protesters that said, "Impeach Obama." Adherents of the fake-birth-certificate conspiracy theory, they believe Obama is not a citizen of the United States. One person passing out the "Impeach Obama" stickers said, "You can't go to school in a Muslim country and then become president. That's illegal!"
Many of the protesters had their own agenda, unrelated to the subject of Obama's speech. Somos America ("we are America") staged a protest hoping to bring attention to the controversial immigration enforcement efforts of local Sheriff Joe "Tent City" Arpaio. In response, former Republican Congressman J. D. Hayworth organized several hundred counter-protesters on the opposite side of the street to display support for Arpaio.
Obama's visit also comes on the heels of a difficult and chaotic couple of months for Democrats in Arizona. Democratic Governor Janet Napolitano left to accept a presidential appointment as Homeland Security Secretary and was replaced by Republican Secretary of State Jan Brewer, giving Republicans a lock on all three branches of Arizona government.
Arizona also recently faced the second largest budget shortfall in the country for the 2009 fiscal year, which ends in June. Arizona still faces a budget crisis for the 2010 fiscal year. With the support of the new governor, the Republican-led legislature cut the university system by 35 percent, cut K-12 education across the board, and cut services for Arizona's most vulnerable populations.
Grassroots leaders of the Arizona Democratic Party, unhappy with the results of recent elections and budget decisions, ousted long-time party insider, Don Bivens, at a recent reorganization meeting, and voted in Paul Eckerstrom as Arizona Democratic Party Chair, a passionate grassroots activist, as his replacement. Two weeks later, when Eckerstrom resigned, citing personal reasons, conspiracy theories abounded. The state party is currently operating without a chair until March 7 when a new election will be held.
Janet Higgins, a local Democratic state committeeperson and well-known activist, launched a grassroots campaign several weeks ago hoping to get Obama to visit Arizona. She urged local Democrats and progressive activists to call the White House to make them aware of the fiscal, economic, and political crises faced by Arizonans. Higgins also called the White House herself every day, reminding them that Obama "took our governor and gave Republicans a lock on all three branches of the state government." Higgins hoped a visit by Obama would re-energize the party and re-united activists who have become divided and entrenched in intra-party politics.