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Tenants in foreclosure stand up to Fannie Mae…and become homeowners

 
July 31, 2013:  When Ethel Brown discovered that she was about to lose her home of 20 years because her landlord was in foreclosure, she could have been another statistic of the foreclosure crisis, uprooted by a mortgage institution that didn’t care about her or the condition of the house. But through three years of her family’s persistence, PJC legal advocacy and support from community organizing allies, her sons purchased the house from Fannie Mae.
 
Ms. Brown first learned about the foreclosure in March 2010. Her home was in disrepair, and Fannie Mae was pressuring her to accept a “cash for keys” deal to get her out of the house quickly. Thanks to a referral from Baltimore Neighborhoods, Inc., Ms. Brown and her sons Berveyn and Kenneth found the Public Justice Center. PJC attorney Matt Hill spoke with them about Ms. Brown’s rights under the Protecting Tenants at Foreclosure Act (PTFA) and worked with them to oppose Fannie Mae’s motion for possession of the house. Since Fannie Mae hadn’t provided Ms. Brown with a notice of at least 90 days to move out (required by the PTFA), the court denied the motion. Fannie Mae then offered her a new 12-month term lease.
 
But the victory didn’t last. In October 2011, Kenneth requested reimbursement for home repairs he had made and informed Fannie Mae’s management company of numerous outstanding problems needing professional work. A few days later, the management agent told the Browns that they wouldn’t be renewing the lease. In response, the PJC prepared a complaint to stop the apparent retaliation. Within days, the threat of ending the lease was taken back. The management company came to the property for the first time, promised to make repairs soon and offered a new lease. By summer 2012, however, the repairs still weren’t done and the new lease didn’t exist. In November, Ms. Brown was told to allow appraisers into the house and that she would have to move out by the end of the year, only a month away.
 
At this point, the Browns and the PJC realized that even the best result of legal action would be renting from an unresponsive landlord. The Browns wanted to call out Fannie Mae publically, not only because of their own situation, but also because of the way financial institutions had harmed their relatives and friends. 
 
The PJC found the avenue to amplify the Browns’ voices through national community organizing allies the Home Defenders League and Right to the City, which were running the campaign “Take Back the People’s Bank”. The campaign was demanding that Fannie Mae and Freddie Mac stop all evictions, respect renters’ rights and sell their foreclosed properties not to investors and hedge funds, but to existing occupants or to non-profit stewards.
 
The campaign invited Kenneth Brown and Communities United Baltimore to a private negotiation with Fannie Mae vice presidents in Washington, DC. He shared his mother’s situation and represented the position of Fannie Mae’s renters across the country. Afterward, the Browns sent a demand letter to Fannie Mae, listing conditions that still needed repair and offering to buy the house at market value. The letter was ignored.
 
In the meantime, a district court judge decided that the Protecting Tenants at Foreclosure Act didn’t apply to Fannie Mae’s latest attempt to evict Ms. Brown, but stayed the judgment to give her five weeks to find a new place. In that time, the Browns discussed what they wanted and dispatched PJC attorney Zafar Shah to speak with Fannie Mae about their offer to purchase the house. This direct communication was only possible because the Home Defenders League and Right to the City had been organizing residents nationally to pressure Fannie Mae.
 
The day before Ms. Brown had to move, Fannie Mae contacted the PJC and the Browns to schedule the signing of a new lease which would keep Ms. Brown in her home while the house was appraised and prepared for sale. Fannie Mae also agreed to allow the Browns to make the first offer to buy the house. The organizing pressure had produced a positive response. 
 
A few weeks later, Zafar called Berveyn Brown to check in. Berveyn had just gotten back from closing on the sale of the house. After three years of fighting for this home, the Browns owned it and would be reimbursed for the rent they had paid since the new lease.
 
In sharing the victory with PJC staff, Zafar Shah offered this reflection: “While the Browns’ is an individual success, the whole process, from being threatened with illegal eviction to sitting at the table with Fannie Mae to closing on the house, has cemented for the Browns the idea that organized people can fight back against organized money. And for the Public Justice Center, the Browns’ victory is an example of how legal advocacy in court and the legislature can combine with community organizing to achieve tremendous results.” 
 


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