By Sean Reilly Wood
Six years after housing prices began their perilous drop in January 2007, the negative equity of all underwater mortgages within the United States is still a whopping $689 billion. Neither Congress, President Obama, or the Federal Housing Finance Agency have sufficiently addressed this ongoing crisis.
Instead, students are stepping up.
On Wednesday, February 27, more than 200 students rallied at Macalester College in St. Paul, Minnesota, against Wells Fargo and home foreclosures. The previous day, four members of the student group “Kick Wall Street Off Campus” (KWOC) had met with representatives from Wells Fargo and the Macalester administration to demand that Wells Fargo implement a principal reduction policy. Under this policy, all underwater mortgages would be renegotiated to current market value. In a post-crisis market, homeowners would be given a fair value for their house and the banks – who caused the crisis – would take a slight hit to their assets in return for long term loan stability.
Unsurprisingly, Wells Fargo refused. At the Wednesday rally, students asked Macalester to end financial dealings with Wells Fargo, objecting to their college’s affiliation with a firm which not only helped cause the housing crisis but has continued abusive policies in the wake of it, refusing to renegotiate loans for struggling homeowners. Afterwards, students went into Minneapolis proper and rallied a second time at the foreclosed home of Gayle Lindsey before marching to the Wells Fargo Home Mortgage Headquarters.
“Wells Fargo representatives repeatedly stated that their ‘hands were tied’ in regards to principal reduction” explains Leewanna Thomas, one of the lead organizers for KWOC. “I hope that today showed Macalester’s administration that we are not students protesting for the sake of protesting. We are joining together with our neighbors as we all fight a serious crisis, and our college needs to decide if it is on the side of our community or on the side of Wells Fargo.”
During the latter rally, four students (including Thomas) and nine community members were arrested for civil disobedience.
Macalester College has become a focal point for a national campaign of students to “Kick Wall Street Off Campus.” On a national level, the campaign has been organized by United Students Against Sweatshops, a national student organization dedicated to economic justice and which works in conjunction with labor and community organizations.
According to the national USAS KWOC campaign,, “resetting all underwater mortgages in America to market value would end the foreclosure crisis, save the average homeowner over $500 million a month on mortgage payments, and would only cost Wall Street banks $71 billion of the $1.64 trillion they currently have in cash reserves.”
Not only has Wells Fargo prioritized its own profits over the livelihoods of homeowners, it has shirked responsibility and, in so doing, dodged accountability for the crisis which foreclosed more than 2.5 million homes.
Since the housing crisis first hit, Public Citizen has fiercely lobbied for accountability from the irresponsible Wall Street firms who flushed the economy down the toilet. Public Citizen has called for the enforcement of the Volcker Rule, a part of the Dodd-Frank Act that prevents banks from making risky bets with taxpayer-backed funds. More recently, Public Citizen sent a letter to the Inspector General of the Federal Housing Finance Agency Steve Link criticizing a recent settlement between Bank of America and Fannie Mae. Restitution for bad loans, which caused the crisis, the settlement at $3.5 billion represents less than a half of a percent of the original value of the loans.
It is inspiring and exciting to see students aware and active, demanding justice from these financial titans, resolute against Wall Street goliaths. To create an economy that prioritizes citizens over corporations, it will be necessary for communities of all sorts to join together and struggle for people over profits.
Here’s hoping Macalester can hold these corporate Goliaths accountable.
Sean Reilly Wood is a communications intern at Public Citizen.