[COMM-ORG] PICO foreclosure organizing
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Sat Oct 30 08:18:33 CDT 2010
From: Steve Rodriguez <news at piconetwork.org>
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City of San José Diverts Nearly $1 Billion from BofA as Bank
Foreclosure Scandal Mounts
It's happening. Cities are starting to say to big banks, "Stop harming
our communities!" by investing more of the public's dollars in banks
committed to stopping foreclosures, and pulling their money from those
that continue to kick families out of their homes at record pace.
Yesterday, San José Vice Mayor Judy Chirco, City Councilmembers
Sam Liccardo, Madison Nguyen, Rose Herrera and Kansen Chu, and
grassroots leaders from PICO affiliate PACT San Jose announced that the
city has diverted nearly $1 billion from Bank of America based on the
bank's poor record of modifying loans to stop preventable foreclosures.
The San Jose City Council voted unanimously in December 2009 to make
bank's loan modification performance a criterion in deciding where the
city will invests its money. As a result, the City has moved almost a
billion dollars from Bank of America this year. In the last quarter of
2009, the City had over $1.3 billion in BofA compared to $417 million in
the 3rd quarter of 2010. The City of San José now holds just 20%
of its investments in BofA. Bank of America is no longer the largest
bank in Silicon Valley.
The San Jose policy is the first of its kind in the nation to tie the
level of city investment that a particular bank receives to its
foreclosure prevention practices. You can
watch TV coverage of yesterday's event
Yesterday's event occurred on the same day that the U.S. Treasury
showing that the Administration, even amidst the controversial
robo-signing scandal, is still not doing enough to hold the nation's
biggest banks accountable for commitments they made to prevent
foreclosures when they accepted federal bailouts in 2008. According to
the Treasury report:
* Over the last 18 months, banks have offered permanent loan
modifications to just 466,000 homeowners. But in just the first nine
months of the year, nearly 2.7 million homes have received foreclosure
notices, and millions more are on the brink of foreclosure.
* Banks did just 27,480 permanent modifications in September, a number
that pales in comparison to the more than 100,000 bank repossessions of
homes during that same month.
* Most troubling, there are 76,500 homeowners who have been waiting for
more than six months in the limbo of a trial loan modification. Banks
are supposed to make a decision on whether someone is eligible for a
permanent modification within three months. One-half of all borrowers in
limbo are being strung along by one bank: Bank of America. Incredibly,
more than one-half of all families who have trial modifications from
Bank of America have been waiting for longer than six months to receive
a permanent modification.
* Bank of America also has the worst record of customer service in the
foreclosure prevention program, ranking last in Average Speed to Answer
a Homeowner Call, Call Abandon Rate and Servicer Time to Resolve
Luckily, while the Administration continues to turn a blind eye to the
banks, local officials like those in San Jose are starting to pick up
the banner, calling on banks to do much, much more to keep families in
their homes or else lose city deposits.
San Jose City Councilmember Madison Nguyen said at yesterday's event, "
The homeowners in my district need Bank of America to make a strong
effort to work with them. Homeowners are not asking Bank of America to
buy back their bad loans like many of these sophisticated investors are
asking BofA to do. The homeowners in my district want to keep their
homes. They simply cannot pay the high, adjusted rates of their B of A
home loans. Banks need to work with homeowners to provide sustainable
loan modifications that start with reducing principal."
PACT faith and community leaders and San Jose city officials called on
other cities to follow their lead in adopting social responsibility
investment policies to hold banks accountable for ethical policies and
practices to keep families in their homes and rebuild the economy.
" Our City has already taken action, and this is the time for other
cities to take action. I invite the other 10 largest cities in the
United States to look at where their money is and stand with your
homeowners and families. I invite Bay Area citie s to do the same," said
City Councilmember Rose Herrera. "This is not only an ethical action, it
is an economically responsible action. Each foreclosure costs our city
an estimated $27,000 in lost tax revenues. That means every two to three
foreclosures cause another teacher, another police officer or another
firefighter to lose their job at a time when the City simply can't
City Councilmember Sam Liccardo reported that he recently worked with
San Francisco to develop their own policy modeled after San
José's. Even tougher legislation is pending in Los Angeles as
To find out more about passing a similar policy in your city, contact us
at news at piconetwork.org .
Most Holy Trinity Catholic Church
PACT San Jose
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Our address is 110 Maryland Avenue NE, Suite 407, Washington, DC, 20002, USA
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