States Call for Moratorium on Home Foreclosures

States Call for Moratorium on Home Foreclosures

Thursday, January 3rd, 2008


BY J. Mijin Cha

States Call for Moratorium on Home Foreclosures

Not surprisingly, the Bush Administration's proposal for fixing the subprime lending crisis is an industry-led deal that involves completely voluntary actions to fix the current crisis and will ultimately help only a few of the millions of people who have either lost or are in danger of losing their homes.  With absolute failure at the federal level, it is again up to states to step in.  In two recent editorial pieces, the executive directors of the Progressive States Network and the Drum Major Institute called on New York Governor Spitzer to impose a six-month moratorium on foreclosures to stop the rapidly increasing rate of home loss, a policy all governors should enact. A moratorium would give lenders incentive to restructure loans on fair terms and fight back against the Wall-street backed predatory lenders.

We previously highlighted how states are taking over for federal inaction, and misaction, in fighting the current mortgage crisis. New York Assemblyman Jim Brennan is introducing legislation to impose a one-year moratorium on home foreclosures.  Massachusetts became the first state to impose a moratorium last year. Without action, in the next two years, as many as 100,000 homes would be subject to foreclosure in New York. Nationwide, home foreclosure filings have increased an incredible 68% over the period of just one year. The rate is predicted to increase even further this year as payments rise on roughly 1 million home loans. Movements are also underway in Michigan, Ohio and Texas to adopt foreclosure moratoriums. 

As a recent report by the US Conference of Mayors highlighted, the ripple effects on local economies from mass foreclosures would be devastating. Nationally, groups like the AFL-CIO and the NAACP are also calling for a foreclosure moratorium to give homeowners a chance to re-finance and restructure their subprime loans. Illinois Congressman Danny Davis, facing a rate of 70 foreclosures per square mile in his district, is proposing legislation that would implement a 90-day moratorium on foreclosures, free homeowners from the threat of eviction during the winter months, and allow lenders to rent the homes at fair market value while the property is in foreclosure proceedings.

Senator Hilary Clinton has also called for a three-month moratorium on foreclosures. Presidential candidate John Edwards goes even further and would impose a moratorium on foreclosures until he, as president, would decide that the housing crisis is over.

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BY Nathan Newman

California Upholds Free Speech Access to Malls for Labor Boycotts

On December 24th, the California Supreme Court gave a major Christmas present for labor rights, affirming that under California law, union members in a mall could distribute handbills calling for a consumer boycott of one of the mall's tenants. The decision, Fashion Valley Mall v. NLRB, built on an earlier state high court decision in 1980 that deemed malls to be a "public forum" where the public had free speech rights. The recent decision extended that principle to active labor boycotts -- a critical tool for labor to get its message out to consumers.

New Jersey law extends similar free speech protections in malls, with Massachusetts, Oregon, Colorado and Washington also creating broad free speech rights. Other states have more limited or no protections for speech rights in malls. While federal law gives no general free speech protections on private property, the U.S. Supreme Court has affirmed that states do have the full authority to extend free speech rights to corporate property if they choose. 

A number of states and local governments have taken action to extend free speech access beyond malls:

  • California's agricultural labor relations law gives non-employee organizers access to private farm fields to talk to workers. (See §20900 of the CA Agricultural Labor Relations, Solicitation by Non-Employee Organizers regulations).  Massachusetts extends similar free speech access to farm camps for labor organizers. 
  • The City of Hartford in 2004 enacted a law giving the general public access to outside areas of retailers located on government-owned property.
  • This past legislative session, the Pennsylvania House introduced legislation, HB 1383, to broadly protect free speech at large retail establishments of all kinds.

Extending free speech rights to large retail establishments and other corporate spaces where people congregate is a key action states can take to both strengthen labor rights and expand democratic rights at the same time.

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BY Adam Thompson

Despite Court Decision, San Francisco Moves Ahead with Health Care Expansion

Healthy San Francisco, the first government program to guarantee universal health care, was dealt a blow by a federal judge who last week shot down a major funding source for the program provided by employers. Regardless, the city planned to move ahead with an expansion of Healthy San Francisco on January 2nd, providing health care to all uninsured residents living below 300% of the federal poverty line, roughly $32,000 a year for a single adult.  Choosing to move ahead will allow San Francisco to cover all but one-third of the city's 73,000 uninsured residents -- helping to preserve Healthy San Francisco's status as the boldest program for universal coverage being implemented in the country.

Healthy San Francisco promises health care to all the city's uninsured residents and sets up a broad-based funding mechanism to ensure shared responsibility, including sliding scale payments from enrollees, city taxes, money currently spent on free care at city hospitals, and a requirement that employers provide employee coverage or contribute to the financing of the program.   It is this employer "pay or play" measure that the federal judge ruled was in violation of the 1974 federal ERISA law which prevents local and state governments from regulating employee health care benefits.

The city is appealing the judge's ruling, arguing that employers can comply with the city law without establishing or changing employee health plans; if they don't meet the law's threshold for employee benefits, they make a contribution to the city to help finance Healthy San Francisco. The employer contributions are expected to cover about a quarter of the program's $200 million funding needs.  

Prior to yesterday's planned expansion, Healthy San Francisco was up and running in two clinics since July and has enrolled more than 6,500 residents. Without the employer payments, the city will not be able to expand eligibility beyond 300% of the poverty line, leaving roughly 25,000 residents without coverage.

The ERISA law is a major roadblock to state universal health care reform and broad-based funding mechanisms that include employer payments.  Since employers provide coverage for more than 158 million Americans, comprehensive health care for all must preserve a robust level of employer participation in providing coverage.  Some states, notably Wisconsin, are pursuing reforms that guarantee health care for all residents and require shared responsibility from employers without running afoul of ERISA.  These proposals sever the link between mandated employer payments and whether or not employers offer health benefits to employees; the very link that is problematic in the eyes of ERISA.

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Research Roundup

Unlocking America: Why and How to Reduce America's Prison Population, published by the JFA Institute, details the explosive growth in prison populations from just 196,000 in 1970 to 1.5 million in state and federal prisons today-- with an additional 750,000 in local jails. The report emphasizes that there is little evidence that this mass incarceration reduces crime and outlines recommendations for changing current sentencing laws and correctional policies to reduce incarceration rates.

In Promises with a Price, the Pew Charitable Trusts' Center on the States highlights how states can meet the $2.73 trillion in pension, health and other retirement benefits promised to public employees. Overall, states have already set aside $2 trillion to meet their long-term obligations, but some states that haven't taken steps to prepare for the future will face challenges.

Please email us leads on good research at


States Call for Moratorium on Home Foreclosures

Stop Foreclosure Resource Center

Neighborhood Assistance Corporation of America

Brooklyn Eagle - Brennan Bill Would Impose One-Year Moratorium on Mortgage Foreclosures

U.S. News and World Report - 6 Things to Know about Bush's Plan

US Conference of Mayors - The Mortgage Crisis: Economic and Fiscal Implications for Metro Areas

California Upholds Free Speech Access to Malls for Labor Boycotts

California Supreme Court - Fashion Valley Mall v. NLRB

RetailTraffic - Free Speech in the Mall

§20900 of the CA Agricultural Labor Relations - Solicitation by Non-Employee Organizers regulations

Hartford Courant - New Rule Makes Hartford Hub of Wal-Mart Debate

PA HB 1383 - Law providing for civil demonstrations at large retail establishments 

Despite Court Decision, San Francisco Moves Ahead with Health Care Expansion

Healthy San Francisco - Our Health Access Program

United States Court of Appeals - Text of Emergency Motion for Stay of Judge's Ruling Pending Appeal

Kaiser Daily - Judge Rules Healthy San Francisco Violates ERISA; City Appeals Decision

Progressive States Network - Ensuring Affordability of Employer Mandates

Progressive States Network - San Francisco's Landmark Law


The Stateside Dispatch is written and edited by:

Nathan Newman, Policy Director
J. Mijin Cha, Policy Specialist
Adam Thompson, Policy Specialist
John Bacino, Communications Associate

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