Above photo: In this Thursday, Aug. 15, 2013, photo, protesters hold a banner outside of Wells Fargo headquarters in San Francisco. The protesters wanted the bank to drop a lawsuit aimed at stopping Richmond’s first-in-the-nation plan to use the government’s constitutional power of eminent domain to “seize” hundreds of mortgages from Wells Fargo and other financial institutions. (AP Photo/San Francisco Chronicle, Rohan Smith)
Will introduce resolution supporting Richmond’s Local Principal Reduction plan and have San Francisco investigate use of eminent domain to save underwater borrowers
San Francisco: On Monday, September 9, 2013, at 10:00 a.m. (Pacific) San Francisco Supervisor David Campos will announce his intention to introduce a resolution before the County Board of Supervisors expressing support for the City of Richmond’s innovative effort to save hundreds of underwater borrowers (Richmond CARES), and instructing staff to explore opportunities in San Francisco to adopt a similar program.
“For the last few years, we have seen Wall Street Banks challenge every effort to rebuild our hardest hit communities from the foreclosure and economic crisis,” stated Supervisor Campos “today we need to show solidarity with bold leaders of Richmond in their effort to break the status quo as defined by Wall Street and rebuild their communities.”
1. Have San Francisco stand with the Mayor and City Councilmembers of Richmond to use similar lawful methods at their disposal as they work to save homes and save neighborhoods;
2. Calls on Wells Fargo – whose home is in San Francisco, SIFMA, and FHFA to stop threatening communities with reprisals and litigation and instead work with them to negotiate principal reduction for underwater mortgages as a way to strengthen local economies and help keep families in their homes; and
3. Explore how a Local Principal Reduction program similar to the one being implemented by the City of Richmond could work here in San Francisco.
WHERE: East Steps of San Francisco City Hall (Polk Street)
Francisco borrowers that received principle reduction and San Francisco borrowers who want the same opportunity.
On July 30, 2013, the City of Richmond became the first municipality in the nation to step boldly in where the federal government and the banks have failed, offering to purchase more than 600 city mortgages from major Wall Street banks and other servicers to achieve local principle reduction for distressed homeowners. Richmond has been hard-hit by the ongoing foreclosure crisis; as of 2013, 46% of all residential mortgage holders in the city are still underwater.
Wrongful foreclosures have caused a catastrophic loss of wealth. Often targeted by predatory lending, communities of color have been particularly hard-hit with African Americans losing 53% of their median wealth from 2005 to 2009 and Latinos 66%.
The Richmond program is an innovative program that enables cities to preserve wealth in local hands, especially in communities of color and low-income communities, which have been decimated by the foreclosure crisis and see no end in sight.
After an unprecedented push by local residents in Richmond to find ways to help struggling homeowners, the Richmond City Council approved the plan in April and sent letters to the banks in late July to offer to purchase underwater mortgages and, if needed, use the city’s eminent domain authority if necessary help struggling homeowners restructure their loans to be in line with the current value of their homes. The City of Richmond is working in partnership with Mortgage Resolution Partners, an advisory firm that has lined up the funding and technical support needed to carry out this program.
“Residents here in Richmond have been suffering for years thanks to the housing crisis Wall Street created and which Wall Street refuses to fix,” said Richmond Mayor Gayle McLaughlin. “We’ve seen too many houses go dark, too many lawns dry up and die, too many families left with nothing after years of hard work. When my constituents started showing up, calling on us to help them save our homes, I knew that this was the right thing for the Mayor and City Council to do.”
Though the City of Richmond is leading the way nationwide on local principle reduction, other California cities such as El Monte and La Puente are advancing this as well.
Supervisor Campos is District 9 Supervisor for the Mission and Bernal Heights Neighborhoods of San Francisco, two neighborhoods impacted by the Foreclosure Crisis. Occupy Bernal was formed last year and has already saved dozens of homeowners from foreclosure through principal reduction by banks and servicers. Occupy Bernal has proven that servicers and borrowers can work together to achieve what Richmond is proposing and Banks like Wells Fargo is opposing.
The Home Defenders League is a national organization fighting against foreclosures, and for a just resolution to the mortgage crisis including the mass principal reduction for underwater homeowners. The League includes 26 community-based affiliates such as the Alliance of Californians for Community Empowerment (ACCE), national organizing networks the Alliance for a Just Society and Right to the City Alliance, Occupy Homes groups, and thousands of member families across the country. In a few short months, a coalition of more than 50 groups, including some of the nation’s largest labor unions and leading fair housing groups, issued an open letter asking members of Congress to rebuff repeated efforts to unfairly bar local municipalities that enact local principle reduction from receiving federally backed home mortgage loans. For more information, please visit: www.saverichmondhomes.
Housing fix has strong enemies – LA Times Column, September 1, 2013
New York Times article, July 30, 2013 about The City of Richmond’s initiative here: