Cities seeking halt
Mayors asking banks to suspend actions
San Francisco Mayor Ed Lee and the mayors of Oakland, San Jose, Sacramento and Fresno will release a letter Wednesday asking the nation’s five largest banks to temporarily halt foreclosure proceedings against some of their customers.
The request applies only to mortgage holders who are covered under the $25 billion federal-state robosigning settlement, which affects people whose loans are held in a portfolio by Ally Financial, Bank of America, Chase, Citibank or Wells Fargo.
The mayors are asking for a pause until the settlement is expected to start taking effect on July 1. The settlement requires banks to offer various forms of mortgage relief, including principal reduction, lower monthly interest payments and help with short sales.
The idea is to make sure that people who may be eligible for help don’t lose their homes in the meantime, said Paul Henderson, Lee’s deputy chief of
staff.
Wells Fargo spokeswoman Vickee Adams said the bank is continuing to provide solutions for distressed borrowers but does not support a moratorium on foreclosure proceedings.
“There are ample opportunities for payment assistance,” she said. “We think any sort of delay would not necessarily benefit the cities or communities in which these borrowers live.”
Buck Bagot, a member of Occupy Bernal, a community group whose protests frequently interrupt foreclosure auctions on the steps of San Francisco City Hall, said he would welcome a temporary halt to foreclosures.
“This whole dual-tracking thing, where people are in a trial loan-modification period and they can still have their houses auctioned off, continues to happen,” he said. “The banks don’t think of it as dual tracking because until they approve the loan modification, they feel like people are still in the (foreclosure) process. The way they do it is so disorganized. A pause would be a wonderful thing.”
San Francisco “wants to be a catalyst in … providing innovative solutions” to the foreclosure crisis, Henderson said.
Toward that end, Lee has been negotiating with banks about their practices, he said. By week’s end, San Franciscans who call 311 will be able to get referrals for assistance with mortgage problems.
The mayor is also focused on making sure San Francisco residents receive relief under the terms of the robosigning settlement.
The mayor will convene a working group including representatives from banks, housing counselors, community leaders and city staff “to work on an approach that reaches borrowers who could be eligible for relief under the settlement to connect them with those resources,” said Jeff Buckley, Lee’s senior adviser on housing policy.
“What we come up with in San Francisco could serve as a model to other cities,” Lee said.
Meanwhile in Sacramento, legislators continue to thrash out final language for the Homeowner Bill of Rights, a package of proposed laws to address foreclosure abuses that is backed by Attorney General Kamala Harris and Democratic leaders.
Key provisions include eliminating dual tracking and requiring banks to provide a single point of contact for struggling homeowners.
A final vote could happen next week.