Shhh. Can you hear it?
Remove your ear from the ground. It's no longer a murmur. The shifting social mood has bubbled to the surface: Americans are starting to fight back.
Our 401(k)s are evaporating before our eyes. Elected officials trumpet power grabs that moonlight as rescue packages. Talking heads mention in passing that General Motors (GM) may not be around next year.
And while some are content to sit, mouth agape, staring at a screen, watching flickering symbols drop in value and bank accounts dwindle, others have had enough and are doing something about it.
Jurisdiction be damned, enough is enough.
On Wednesday in Chicago, Cook County Sheriff Tom Dart said his police force will no longer carry out orders to evict renters if banks foreclose on their landlords. As long as tenants are current on their rent, they can stay. For now. Dart is demanding lenders provide reasonable notice so renters have ample time to find a new place to live.
Financial institutions typically outsource the foreclosure process, which, as one might expect, can get messy. Collections, lawsuits, evictions - these aren't things banks like to deal with (it’s far easier to manage a vendor than deal with the problem themselves). Eviction is the ugliest part, as real people -- warranted or not -- must at times be physically removed from their homes.
In the case of renters, this includes families whose only transgression was to choose renting over buying. Sheriff Dart said he could no longer stand the sight of families returning home and finding their belongings on the street, through no fault of their own.
"These mortgage companies only see pieces of paper, not people, and don't care who's in the building," the sheriff said in a news release. "They simply want their money and don't care who gets hurt along the way. We're not going to do their jobs for them anymore. We're just not going to let them evict innocent tenants. It stops today."
Slowly, banks are coming around to the fact that they can no longer ignore troubled homeowners, many of whom were the victims of fraud or deceit on the part of mortgage brokers, realtors and even the lenders themselves. There are, in fact, codes of conduct that matter.
In the past week, Bank of America (BAC) agreed to pay over $8 billion to settle claims filed by states and counties against Countrywide, which it purchased earlier this year. Merrill Lynch (MER), Morgan Stanley (MS) and other banks have had to cough up millions to satisfy claims they were less than forthright in sales of Auction Rate Securities.
To be sure, some homeowners were complicit in the fraud themselves, but in the case of responsible tenants, this simply isn't the case.
As expected, the Illinois Banking Association isn’t pleased with Sheriff Dart’s obstinance, and has accused him of vigilantism. It’s likely he’ll end up in court to defend his actions. It’s just as likely an angry mob will be waiting outside in the event he’s not vindicated.
Recent intrusion of government into the free markets, as well as recognition of some more clandestine tinkering in the past, has sparked a passionate ideological debate about the rule of law - and our obligations under it.
It should come as no surprise, then, that as the public begins to come to terms with the farcical economic growth that’s characterized this decade -- and the implications of the reversion to the way things once were -- this is the first of many such instances of very warranted vigilantism.
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