Occupy Our Homes Targets Big Banks Over Shady Mortgage PracticesA spin-off group from Occupy Wall Street, called Occupy Our Homes, has formed to reverse and stop foreclosures. Lately, the group has been using some creative tactics to raise awareness about the banking practices that led to the housing bubble

Earlier this week, Occupy Our Homes protesters in cities across the country united in a day of action, which included reoccupying vacant properties and moving in people without homes -- in some cases, those homes' former owners. Protestors also shut down several auctions and ran off bidders, preventing dozens of homes from being sold that day.

In Atlanta, the members of the Occupy Our Homes movement helped one man convince the auctioneer to talk to his lawyer, and ultimately got his house taken off the auction block.

The protestors also had some success in getting banks to delay foreclosures and work with their clients on loan modifications. For example, Chase agreed to postpone the foreclosure sale of a California family's home and to discuss a loan modification. In Seattle, executives at Aurora Loans and Freddie Mac agreed to negotiate with a couple in a possible modification of their loan.

The movement has also succeeded in gaining media interest, with attention from TV hosts such as Rachel Maddow, Ed Schultz and Keith Olbermann.

So what are these dishonest banking practices the protestors want to hold banks like Bank of America (BAC), Wells Fargo (WFC), Citigroup (C) and JPMorgan Chase (JPM), accountable for? Here's what the protestors allege:

Encouraging risky loans: First, bankers used predatory lending practices to pressure some Americans to take on risky loans they may not be able to pay back. While some might claim that the borrowers are responsible for this decision, the bankers' positioning as "experts" allowed them to gain the trust of their clients about what they would be able to afford.

Allowing highly speculative investing: Bankers' and speculators' over-leveraged and risky investments surrounding the housing market played a huge part in the economic crash, which in turn caused many Americans to lose their jobs or take pay cuts. This, combined with the rapid fall in housing prices, created a situation in which homeowners could not recoup the money they'd put into their houses if they needed to move.

Taking taxpayer money for bailouts: Protestors are unhappy about the fact that while taxpayer money has been used to bail out the banks that engaged in irresponsible business practices, homeowners have not seen any benefits from the government's largesse.

Carrying out illegal evictions: Finally, protestors wish to draw attention to the fact that many banks are carrying out illegal foreclosures and evictions because they do not have the proper notes, mortgages, and other legal documents required to demonstrate valid ownership of the loans. This is a particularly interesting complaint, because it shows why protestors think they are perfectly within their rights in refusing to leave their foreclosed-upon homes.

It will be interesting to see how the action unfolds in upcoming weeks, and whether protests have a lasting impact on public policy and corporate behavior in the banking sector.

Motley Fool analyst Jim Royal, Ph.D., does not own shares of any company mentioned here. The Motley Fool owns shares of Citigroup, Bank of America, JPMorgan Chase, and Wells Fargo, and has created a covered strangle position on Wells Fargo.




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