Martin Luther King III’s renewed focus on role of big lenders in foreclosure crisis could impact governor’s race

By David Pendered

Martin Luther King III has called on the federal Justice Department to intervene in the nation’s foreclosure situation, a call that could have the effect of energizing voters in Georgia’s gubernatorial election.

Georgia ranked fifth in the nation for foreclosures in August. Credit:

A spike in foreclosures in August resulted in Georgia ranking fifth in the nation for foreclosures that month. Credit:

King issued his letter to U.S. Attorney General Eric Holder on the heels of a controversial report on the nation’s housing market by the chief economist of Freddie Mac. The report paints a fairly rosy picture of the trend line of the jobs and housing sectors, at least on the national level.

At the state level, King’s call reminds Georgia voters of home foreclosures during a campaign in which Sen. Jason Carter, a Democrat, is pressing his point that Republican Gov. Nathan Deal hasn’t done enough to help the middle class. Deal points to jobs created since the end of the great recession.

Georgia’s Senate campaign, between Democrat Michelle Nunn and Republican David Perdue, has focused less of late on jobs and the economy.

Incidentally, Georgia’s foreclosure rate ranks fifth in the nation, according to the August foreclosure report by

Georgia’s foreclosure rate of 0.17 percent is nearly double the national rate of 0.09 percent, according to the report. Georgia trails Florida (No. 1), Nevada (2), Maryland (3), and New Jersey (4).

King’s ability to reach an audience can be viewed in terms of the almost 8 million individuals reached in 2013 through his involvement in a federally sponsored program. Through churches, King helped spread the word of a federal program to help those who lost their homes to foreclosure due to certain practices, according to King’s letter to Holder.

Martin Luther King III

Martin Luther King III

King’s five-page letter is dated Sept. 4 and begins:

  • “A campaign is underway that is seriously undermining federal and state efforts to help struggling homeowners recover from the devastating housing crisis that continues to afflict many parts of America, particularly hard-hit communities of color.”

King contends that several of the nation’s major financial institutions have sought since the outset of the foreclosure crisis to block efforts that intend to help homebuyers stay in their homes. These institutions include Blackrock, PIMCO, Charles Schwab, Prudential Insurance and AEGON, according to the letter.

The relief efforts opposed by the institutions include programs to avoid foreclosure, modify loans and reduce the principal amounts.

King’s letter states that these institutions now are:

  • “… starting to make good on their threats. They are relentlessly pursuing a litigation strategy designed to encourage more home foreclosures and thwart efforts to help homeowners remain in their homes through loan modifications and loan principal reductions.
  • Georgia's foreclosure rate is almost double the national average. Credit:

    Georgia’s foreclosure rate is almost double the national average. Credit:

    “At a time when the mortgages of more than 9 million American homeowners are under water, and after all of the economic harm the nation has suffered from the housing crisis and the millions of foreclosures it has wrought, it is reprehensible today that anyone today could deliberately support more foreclosures and more suffering.”

Previously, on Aug. 25, Freddie Mac’s chief economist, Frank Nothaft, issued a report on the housing market that was generally upbeat. One comment that spurred a fair amount of comment was:

  • “We are getting closer to a more normalized economy, and now we are expecting to see housing driven by fundamentals.”

Nothaft observed the string of improving jobs reports and predicted that as more people become employed, they will seek their own home. He predicts that millenials who have forestalled marriage will eventually marry and buy a home.

About 3 million households could be formed in the next few years, Nothaft contends. This number represents individuals who now share a home with parents or roommates, but want to have their own place.

According to Nothaft’s report:

  • “Those 3 million ‘missing’ households are likely to show up over the next couple of years, especially if recent labor market trends persist. Those new households will require a place to live (new households generally begin with an apartment in the rental market) and will add to housing markets that are already seeing a tightening of available inventory.”

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.

10 replies
  1. Burroughston Broch says:

    He speaks of himself in his letter in the Imperial We mode, like the Queen of England. Of course, she speaks for a nation while he speaks only for himself.
    I suspect this is his effort to support Jason Carter for a hoped-for future quid pro quo. He might have better luck suing his siblings again.Report

  2. ScottNAtlanta says:

    What these institutions are doing is foreclosing on these homes in an effort to make profit in the rental market.  They are even concocting new “derivative products” lumping these properties (and there value on the rental market) into rated securities.  Any guesses how that ends?  Well, when you got away with it once…why not go for two.  
    Also, as I recall it was the wise men under the gold dome that took Georgia’s payout for foreclosure relief  and diverted it to attracting new corporations to the state instead of helping the families it was designed to help keep in their homes.  So, regardless of the messenger…facts are facts, whether spoken by MLK III or the Queen of England. “The truth will stand when the worlds on fire”…nice little phrase from the old south.Report

  3. Burroughston Broch says:

    ScottNAtlanta It is not government’s job to protect the unwary and heedless from purchasing more home than they can afford. A lender is entitled to foreclose on a property if the buyer falls into default.
    And no bank or lender should be “to big to fail.”Report

  4. ScottNAtlanta says:

    Burroughston Broch ScottNAtlanta 
    Yet it is governments job to police the bad actors.  Thats what this is about.  Lenders knowingly selling to buyers that they knew did not have the ability to pay just to turn a profit.  Thats fraud and its not legal.  Yes a lender is entitled to foreclose, but it shouldn’t have a financial incentive to do so.  Its easy to blame the borrower, they cant defend themselves like the banks.  The banks loaned to these people making them think they could pay it back.Report

  5. Burroughston Broch says:

    ScottNAtlanta It is not government’s job to protect citizens from the consequences of their poor decisions. If you wish to buy a home and don’t understand the contract, retain a lawyer to explain it to you. And don’t assume the closing attorney is their to represent you.
    The lender is entitled to foreclose when and if (1) the contract provides for it, and (2) if it makes business sense for the lender.Report

  6. ScottNAtlanta says:

    Burroughston Broch ScottNAtlanta 
    It is, however, the governments job to prevent fraud.  Judging from the huge settlements these banks have been paying to avoid having to answer for defrauding their customers I’d say you’re trying to make something cut and dry when it is not.  Its not that simple and you should know that.  You can commit fraud with a signed contract.  Just because you have a contract doesn’t make it valid under the federal laws governing fair housing.Report

  7. ScottNAtlanta says:

    Burroughston Broch ScottNAtlanta 
    ” It is not government’s job to protect citizens from the consequences of their poor decisions”
    I did not say it had anything to do with bad decisions.  Its the governments job to make sure everyone is operating within the boundaries of the law…which the banks were not doing.  They were defrauding their customersReport

  8. vic says:

    Anyone  who is facing foreclosure and had a loan involved with countrywide/bankofamerica/ now greentree, please check the papers that were submitted by the corrupt substitute trustee lawyers…check them very carefully as many are being forged. They are not only adding fraudulent endorsements but they are also forging the owners own signature .  Do not let them forge your documents and get away with it. Get an expert’s opinion and take it to the police and file a report, then take it to the states attorney, and file a counterclaim against them. Do not roll over and let them get away with defrauding you and the courts.Report

  9. vic says:

    Burroughston Broch ScottNAtlanta You haven’t a clue as to the truth of what is going on.  Do a little bit of research into the matter and you will see what is really happening. Ponzi scheme from the start. Ask yourself why lawyers are forging documents. Ask yourself why lawyers are forging documents. Ask yourself why lawyers are forging documents. Ask yourself why the mortgage notes are being forged? What’s your answer to that?Report

  10. Burroughston Broch says:

    @vic I am asking myself why you would repeat the same inane statement three times. Can you clarify? Just once, please.
    Forgery is a crime; stupidity, bad decisions, and laziness are not.Report


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