Sunday, April 29, 2012

Land reform similarities: US and Zimbabwe

I went for a walk this afternoon around my neighborhood with the for sale signs and the people moving out. I wondered where all the people go. I know some people who lost their jobs, homes and then moved away. I know people who lost jobs, homes and stayed but downsized. When I think about the changes to my affluent town I am frequently reminded of the changes in Zimbabwe. I also recently happened to finally have watched the movie Mugabe and the White African which chronicles the case of Ben Freeth and the SADC tribunal ruling on Land Reform in Zimbabwe. It occurred to me, while I was walking in my neighborhood, that America has created a kind of Land Reform program of its own. It has redistributed property from American families to banks. This redistribution of land has many similarities to the program of Land Reform in Zim.

My neighbor has had it share of foreclosures but I failed to find out exactly how many of the years. Recent statistics show that 1 in every 303 housing units in the state of California is foreclosed.   That sounds like a lot to me. I wonder who gets those properties? If a home is foreclosed it goes back to the bank who held the loan or mortgage. So the banks now own the house. Banks like Bank of America, Wells Fargo, Bank of New York, and JP Morgan are beneficiaries of foreclosure. They now own those properties.

It is true that some properties are resold to new American homeowners, about 33% of sales are resales from foreclosures. So what happens to the balance? What if the banks own them ? What does it mean socially, politically and economically that banks own so much property in California?

The new sub-prime mortgage loan process that relaxed lendee credit and income requirements was spearheaded by banks and mortgage lenders. Now the banks own those failed mortgage lenders and the banks own the homes as well. The US government permitted this through its determination not to regulate.

Homeowners have tried to sue banks and argue to keep their homes because of the deficiencies in the assignment of mortgages to MERS the mortgage electronic registration system leaving the bank not with the title but the homeowner. These cases are not successful as the courts do not support the homeowner but instead support the bank in order to maintain the status quo.

It's official. I do live in Africa. Let's go through the similarities between the land reform programs.

The government of Zimbabwe passed laws to redistribute land. The US government failed to regulate MERS and the entire driver of the subprime lending fiasco, collateralized debt obligations. Both government activity of failure to act resulted in homeowners losing their homestead and suing in the courts.

Both land reform programs, one intentional one incidental, resulted in courts being slow to see the homeowners point of view. Africa is actually ahead of the game on this point. SADC declared land reform illegal in Zim. In the US, the courts pretty much rubber stamp foreclosures.

Lawyers have been trying to argue for more scrutiny by courts in these cases in order to recognize the numerous legal deficiencies in the foreclosure process giving an advantage to the banks. But these cases are few and far between.

The US land reform program resulted in transferring property to banks. In Zim, former white owned farms are redistributed to indigenous Zimbabweans, who sometimes also work for the Zim government. Two programs that may have had one purpose to begin with or on their face, but resulted in the same thing: dispossession, economic downturn and a complete lack of faith in the process and rule of law.


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