During the week of March 14th, PICO California, together with allies at ACCE, California Reinvestment Coalition and SEIU, launched a statewide campaign to pass a package of new state legislation aimed at protecting homeowners from fraudulent bank foreclosure practices and making banks pay their fair share for the housing and foreclosure crisis that has devastated the budgets of families, local communities, and the state.
The package of legislation includes:
- The Homeowner Protection Act (SB 729) which will require lenders to finish attempting a loan modification with each borrower before continuing with the foreclosure process.
- The Title Transparency Bill (AB 1321) which will require that all deeds and transfers of mortgage loans be recorded with the County, so that borrowers can confirm in public record who actually holds their mortgage.
- The Foreclosure Fee Bill (AB 935) which seeks to incentivize loan modifications by adding a disincentive to foreclosing – a $20,000 fee. This fee begins to allow communities, cities and the state to recoup some of the fiscal costs that result from each foreclosure. The revenue will be collected in a state fund and will go to Public Safety, Public Education and Local Governments.
To kick off the campaign, the coalition released a new report, “Home Wreckers: How Wall Street Is Devastating Communities,” which brings to light the full impact of the costs of foreclosure for each county, a total that adds up to a minimum of $650 billion and as much as $1 trillion. This report is the first time the full set of costs to homeowners and taxpayers have been quantified in California – the hardest hit of all states with the most number of foreclosures. The costs to the state outlined include:
- Homeowner Cost: Home value losses to foreclosed homes and neighboring homes total a minimum of $632 billion-$337,379 value loss per foreclosure to the surrounding community.
- Property Tax Cost: As housing values decline, property tax revenue losses are estimated to at least $3.8 billion– $2,058 property tax loss for every foreclosure.
- Local Government Cost: Foreclosure-related costs for multiple agencies and multiple levels of government for maintenance of blighted properties, sheriff evictions, inspections, public safety, trash removal, and other costs are estimated to be $17.4 billion and higher-$19,229 cost for every foreclosure.
The coalition also held events throughout the state on March 16th in support of these initiatives, which would create a disincentive to foreclosure and would raise an expected $10 billion in revenue over the next two years.
And on March 19th, PICO federation Oakland Community Organizations (OCO) and PICO California, together with ACCE and SEIU Local 1021, held a large town hall meeting with city and state elected officials in east Oakland, which has been rocked by foreclosures and is now dotted with vacant, bank-owned homes. In addition to building support for the state legislation, community and faith leaders lifted up local strategies that the city and county can take to protect homeowners and hold banks accountable. To watch homeowners giving testimony from the action click here.