Macalester College Students Put On The Heat To Wells Fargo Bank On Home Foreclosures

By @MMichaelsMPN |
Be Sociable, Share!
    • Google+
    Demonstration at a Wells Fargo bank in the Twin Cities. (Photo/Emma Kalish)

    Demonstration at a Wells Fargo bank in the Twin Cities. (Photo/Emma Kalish)

    (MintPress) – “This is a student-led, student-run campaign that we have ownership on but we are also part of a broad coalition of groups in the Twin Cities targeting corporations like Wells Fargo,” said Macalester College student Rebecca Hornstein to Mint Press News.

    A growing number of students at the college have demanded that the administration end Macalester’s long-standing relationship with  Wells Fargo after bank representatives failed to meet student demands for ethical banking practices. The burgeoning student movement, barely a year old, grew considerably this week after bank officials refused to capitulate to student demands, namely principal reduction for homeowners in Minnesota threatened with unjust foreclosure.

    Macalester students were among the 200 people representing labor unions and student groups that marched to a Wells Fargo branch in Minneapolis, Minn. last Wednesday, demanding an end to foreclosures across the city. Thirteen people were arrested in the non-violent demonstrations when several activists sat down, blocking the 26th Street bridge over I-35 W.


    Students Fight Back: A Month of Action

    Long after the 2008 financial crisis, the worst economic downturn since the Great Depression wiped out $11 billion dollars in personal savings, the residual effects of the housing crisis is still affecting thousands of families across the country.

    Approximately 20 devoted students have begun working with Minnesotans for a Fair Economy, a community coalition of labor unions, student groups and faith-based organizations advocating for an end to home foreclosures, a pernicious problem across the state.

    Since 2005, more than 100,000 homes have been foreclosed in Minnesota, according to the Minnesota Housing Partnership. Nationwide, more than 10 million homes have been foreclosed in the past decade, according to a 2012 Al-Jazeera report.

    Months of conversation with college administrators led to a meeting  last Tuesday, giving student representatives the opportunity to issue their demands to Wells Fargo.

    David Wheaton, Macalester’s vice president of finance, wanted to broker an honest discussion, giving both sides a fair chance to engage in dialogue. This came after a meeting over winter break when students first brought their demands to college administrators.

    “We are demanding principal reduction on a large scale and it is important to hear what they have to say about that,” said student organizer Leewana Thomas to Mint Press News.

    Principal reduction is a loan modification that reflects that current market value of a home. After the housing market collapsed during the 2008 financial crisis, home values plummeted, requiring homeowners to make monthly mortgage payments that reflect the old value of their homes.

    The subprime mortgage crisis made matters far worse after the housing market crashed and millions of families found that bank executives knowingly approved fraudulent mortgages that were substantially out of their income range. In many cases, individuals were issued “robo-loans” approved by bank computer programs without ever having a banker’s approval.

    The fraudulent mortgages packaged by investment groups like Washington Mutual, Countrywide, Deutsche Bank and Goldman Sachs later become known as “liars loans” because many did not require any proof of income for applicants.

    Total home equity in the United States valued at $13 trillion in 2006 dropped to $8.8 trillion by mid-2008.

    Enter Macalester student organizing in 2013, offering a simple demand in solidarity with Occupy Homes Minnesota and other activist groups working to keep families in their homes and to pass a moratorium on home foreclosures.

    “The administration wanted to get us all on the same page with what we are doing and what they are asking,” said Emma Kalish to Mint Press News.

    The students met with Wells Fargo representatives Feb. 26 in a meeting closed to the media and outside observers. “Our administration set up a meeting with Wells Fargo representatives because they thought we weren’t hearing the other side,” Sarah Knispel said.

    The bank flew in special mortgage experts from Sioux Falls, S.D. for the occasion who rebuffed student demands for widespread principal reduction across the Twin Cities. Wells Fargo representatives refused to speak with Mint Press News when approached for comment.

    Students speaking to Mint Press News remained optimistic that they could move forward from the meeting constructively, building their movement and ending Macalester College’s ties to the financial institution.

    “It became clear that all the major community gains have gotten in rebuilding after the foreclosure crisis has been through community pressure and that was something that the Wells Fargo representative told us in the meeting,” Rebecca Hornstein said.

    No figures have been published on the extent of Macalester investments with Wells Fargo, but the elite liberal arts school uses a P-card system with the bank. Students and clubs are issued cards that can be used on campus and at neighboring businesses. The P-cards function like a debit card.

    The Tuesday meeting was preceded by a Valentine’s Day demonstration in which students wrote cards to Wells Fargo offering their desire to create a new relationship with the bank.

    “We went with one of our schools’ a cappella groups. We have been asking students to write Valentine’s to Wells Fargo. We wrote a letter to the Wells Fargo Minnesota president saying that we want principle reduction on all underwater homes in Minnesota,” Knispel said.

    More than 100 Valentine’s Day cards were hand-delivered to Wells Fargo representatives but the group left quickly after the bank employees threatened to call the police.

    Student messages included “Give our community a chance” and “Principal reduction would help build our community.”

    Mobilizing the student body of just 2,000 is a challenge, especially at a school where the majority of the student body takes academics seriously by spending the majority of time in class or doing homework. Several student organizations have signed on in support of the campaign. The Macalester College student government already has passed a resolution this semester calling upon the administration to cut ties with the bank.

    The movement is in its incipient stages, but student leaders say that they are willing to escalate the protest if college administrators do not agree to cut ties with Wells Fargo. This could lead to a student strike in the future, a much smaller version of the mass student uprising in Quebec during 2012 that led to the Harper government canceling proposed tuition hikes.


    Coordination with Occupy Homes

    Support within the housing rights community has been growing outside Macalester College, and signs point to that the housing crisis is still a major problem affecting families across Minnesota.

    The homeless rate in Minneapolis is at a six-year high, according to a November 2012 local report.  Each night, 500 families sleep in city shelters and approximately 800 are on the streets, a serious housing epidemic in Minneapolis that corresponds with troubling national trends.

    Nationwide there are approximately 3.5 million homeless individuals, many of whom are veterans. With 19 million vacant homes, the solution is simple — keep families together, in their homes, by giving them somewhere safe to live. The demand has been posed by Occupy Homes; the question is whether city officials are willing to do something about it.

    The problem has not gone unnoticed by state legislators. Democrats in the Minnesota state legislature proposed a Homeowner Bill of rights last month. If passed, the bill would prevent a practice called “dual-tracking,” a process by which a lender simultaneously starts foreclosure proceedings on a borrower while assessing the borrower’s eligibility for a mortgage modification. These considerations have come at the behest of Occupy Homes, a group that has helped stave off foreclosure for seven Minneapolis families through dozens of occupations and demonstrations since 2011.

    “I think it’s really powerful for students to see the impact that this work has on the community and to see us working in solidarity with unions, like the striking Macalester security guards for example, I think energizes students to realize the impact that they have and the pressure that they can exert on the administration, instead of feeling so helpless,” Maya Pisel said.

    Be Sociable, Share!


    Print This Story Print This Story
    You Might Also Like  
    This entry was posted in Economy, Nation, News and tagged , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.
    • Darren Snakeman

      Wonder what came of this. I suppose this has to put a tinge on Wells Fargo’s reputation on being a student-friendly bank?

    • The Z

      So people take out a mortgage, don’t pay it, and they should get to keep their house?

      If you can’t afford the loan to buy a house, seems the right thing to do is not take out a loan to buy house.
      Really, I’m lost when it comes to students wanting every bit of debt they’ve acrued to be forgiven. And I’m a student with $40,000 in student loan debt and a $100,000 mortgage. I don’t expect those debts to be wiped cleaned until I send in the check that clears the balance.
      I guess I’m just responsible that way.

    • TJ

      Do these students understand that when a bank forgives part of a principal that the homeowner will have to pay taxes on that amount and it will be considered income for that year. How would you like to pay the IRS on tens of thousands of dollars in one shot? What they are demanding is not necessarily best for the homeowner.

    • Todd Gack

      I’d like to increase my principal when my home value rises post-signing.

      Said no homeowner ever.

      • The Z

        Exactly. It’s a two-way street that these kids apparently don’t get.