Housing Crisis Foreclosure Abatement Action Plan

A Call to Action for MoveOn East Bay and Central Contra Cost Councils
 

For many Americans the American Dream has become the American nightmare. Since 2006 we have had more than 5 million foreclosures.  The New York Federal Reserve Bank recently estimated that there will be 3.6 million more foreclosures in the next two years.  The financial impact on states and cities is devastating. A recent National League of Cities survey found that foreclosures and the declining housing market are among the leading causes of local government budget crises.

The housing market is where the economic crisis began and without immediate action, we are facing a multi-billion dollar impact on our neighborhoods that is undermining the economic recovery that we desperately need.

·     Establish Foreclosure Free  Zones:  Counties and municipalities should use all means to stop foreclosures that are based on questionable document filings - such as widespread “robo-signing” and notarization fraud.  Support California Attorney General Kamala Harris’ proposed foreclosure moratorium, and the legislative initiatives of The Homeowners Bill of Rights.

·      Promote a comprehensive Principal Reduction program:  An appraisal will establish a new “Interest Bearing Principal Balance”.  For example, the difference between the assessed home value and the loan balance can be divided equally, where 50% is written off as principle forgiveness and the other 50% becomes non-interest bearing “Deferred Principal Balance” due on sale of the property or in 30 years at loan maturity. This is a "Win-Win" for both the mortgage holder and the lender in averting total loss of both the home and book value of the loan in extremely stressed markets. 

·      Establish Land Banks and Land Trusts:  Land Banks and/or Community Land Trusts provide a structure allowing for foreclosure, while giving people an opportunity to stay in their homes and avoiding the impact of abandoned houses in the surrounding neighborhood.  These program move us towards an effective solution that can serve as an advocacy tool and as a model for the rest of the country.

So far the federal government has mostly offered programs that bailed out the Big Banks and Wall Street.  Our proposal will provide direct assistance to Main Street.  A revived and stable Main Street will provide the needed economic boost to maintain a healthy economy with a dynamic and responsible financial sector.

We need to stop the coming wave of new foreclosures and keep people in their homes.
   We need to act now to preserve and start restoring the middle class.

East Bay MoveOn members are being asked to bring this action plan to their local state, city and county representatives, to city council and county supervisors meetings and to the offices of public officials such as assessors, district attorneys and county sheriffs who are involved in oversight of the public trust related to unfair and fraudulently documented foreclosures.  

Some links to additional resources and perspectives on the issues:

San Francisco Assessor and Recorder of Deeds Phil Ting has determined that 84% of foreclosures in SF County are based on improper loan documents. Read more HERE, with a link to his complete report.  

California Attorney General Kamala Harris is asking for a statewide foreclosure moratorium, in conjunction with a legislative "Homeowner's Bill of Rights" which our local actions can support moving forward. Read more on the Homeowner's Bill of Rights legislation HERE. 

Impact of Nevada's laws restricting foreclosures without full documentation, HERE. 

Land Banks are a locally-based approach to avoiding abandonment of houses and keeping people in their homes even in the event of a foreclosure and auction of the property.  Read more HERE and HERE and HERE on Land Banks. 

ACCE - Alliance of Californians for Community Empowerment - have several reports on the "Wall Street Wrecking Ball" impact on California communities, linked HERE. 

The New York Federal Reserve Chairman on the impact of the foreclosure and housing crisis on economic recovery and the need for broad remedies to assist homeowners, HERE. 

Printable three-page text version of the Anti-Foreclosure Action Plan, with contact info and resource links, HERE.

Viewpoint: California Realtor's Association 

Viewpoint: Principal Reduction Is Long Overdue 

Viewpoint: "Will Schneiderman Take On the Banks?"