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Community members held signs and applauded the politicians who promised their support for a senate bill requiring banks to consider a loan modification for any homeowner who applied for one.

Residents rally against foreclosure practices and to support reforms

on March 21, 2011

The sanctuary of East Oakland’s St. Louis Bertrand Church was filled with housekeys on Saturday morning—keys on string encircling the room and hanging from the balcony, keys in jars, in pockets and around necks, keys in hands being jingled in uniform outrage, all because there are fewer housekeys in Oakland than there used to be.

The display of keys was a symbolic part of Saturday’s rally as over 1,200 people protested the recent wave of home foreclosures resulting from what they called unfair and often criminal behavior by banks and demanded concrete responses from their elected officials to protect the rights of homeowners.

“Today we are here to advance our solutions, slow down the foreclosure process and ensure that our families are treated in a just, humane and ethical way.  We are here to ask our elected officials to stand with us, and do everything in their power to hold these banksters accountable for their actions,” said Richard Speiglman, whose speech was met with uproarious support from the crowd. Speiglman is a member of Oakland Community Organizations (OCO), a federation of schools, churches and other community groups, and one of the organizers of the event.

A labor union and two other organizations that work on housing issues also sponsored the rally, which marks the first collaboration between OCO and the Alliance of Californians for Community Empowerment (ACCE), People Improving Communities Through Organizing (PICO), and Service Employees International Union 1021 (SEIU).

California has been one of the states hit hardest by the foreclosures crisis, and housing prices here have always been comparatively high.  In February 2011, one in every 239 housing units received a foreclosure filing, a total of 56,229 statewide, according to RealtyTrac. Since 2006, Speiglman said, 9,122 Oakland homes have been lost to foreclosure—the majority of which are in East Oakland—and this week alone 684 of those homes are scheduled to be sold at auction.

The problems many homeowners are now having stem from uncontrolled lending practices that led to a proliferation of sub-prime loans, or loans with high interest rates made to people who would not normally qualify for loans. Many such homeowners took out  adjustable rate mortgages, in which the payments increase over the years, and found themselves unable to keep up with them. Now the banks can foreclose on their homes and sell them at auction. Borrowers in danger of foreclosure can apply for a loan modification in which the terms of the loan, such as the interest rates, duration and monthly payments may be renegotiated.  However, current state law does not require banks to modify loans.

Saturday’s forum moved at a rapid clip, with roughly a dozen speakers addressing the crowd in just over 90 minutes.  Some speakers shared heartfelt testimonials, others offered statistical presentations and outlines of possible solutions, and local politicians offered hope and promised that they would do more to help homeowners.  Throughout the event, organizers urged both the politicians and community members to support four proposed legislative measures that they say would ensure homeowners are given the best possible chance of keeping their homes.

In the first of three testimonials, Alameda County resident Jackie Brazil told the crowd that when her hours at work were reduced in 2008, she began having difficulty making her mortgage payments, but was told the bank wouldn’t speak with her unless she was behind on her payments. So Brazil said she intentionally fell behind on her payments to apply for a modification, and was told by the bank that she was an excellent candidate and that a modification was very likely.

Then, she said, one day she came home and found a notice on her door informing her the bank had sold her home and that she and her children had to vacate the premises within three days.  “They sold my home while I was in the middle of a modification,” she told the crowd at the rally.  “When I called my housing counselor at the bank, they told me, ‘We don’t have to modify your loan, it’s a voluntary program and we are under no obligation to modify. Yes, we sold your house, now get out.’”

Oakland resident Lilian Cabrera brought a stack of paperwork roughly seven inches high when she approached the podium and introduced herself as “possibly still a homeowner.” Cabrera said that since 2009, when she first applied for a modification of her loan, the bank had mishandled her application three times and that she has had to fill out the 69-page application by hand each time.  After nearly two years, and at least one attempt by the bank to sell her home, Cabrera said she still can’t get anyone one the phone to tell her if she will be able to modify her loan and keep her house.

“As a businesswoman, if I go into contract with a client and do not hold up my end of the bargain, I lose my license and possibly go to jail.  How do banks get away with this?” Cabrera asked the crowd.

For a half hour, other speakers outlined four legislative proposals that the event organizers hope will make foreclosure practices more transparent and discourage banks from foreclosing too hastily.  The measures would require a greater level of disclosure between the banks and the state and implement policies to reduce the total number of foreclosures.

These include California Senate Bill 729, which would require banks to consider every homeowner who cannot pay their mortgage for a loan modification and require them to give a specific reason if they deny the modification before beginning the foreclosure process.  It would also require that banks prove they own the mortgage before attempting to foreclose—banks often sell mortgages to other lenders without notifying homeowners, leaving homeowners confused when a new bank unexpectedly takes over their property.

The bill’s author, Senator Mark Leno who represents San Francisco, Sonoma and Marin, attended the rally, and an enlarged copy of SB 729 sat on an easel near the podium. Leno joined other politicians including Oakland’s Vice Mayor Desley Brooks, councilmember Rebecca Kaplan, and state assemblymembers Sandre Swanson and Nancy Skinner in signing the bill as a show of support. As they signed, each was presented with a jar of keys representing homes that had been lost in their respective districts.

“When I look at this jar, I imagine all the tears and sleepless nights these keys represent,” said Leno as he made a speech explaining his bill. SB 729 was introduced to the state senate on February 18, but has not yet reached the senate floor for a vote.

Groups like ACCE are also pushing for a bill that would require title transparency, meaning that all mortgages and deeds be on record with the county recorder’s office. At this point, no such bill has been proposed to the California legislature, but Phil Tang, the assessor-recorder of San Francisco, said in his speech on Saturday said that he would adamantly support one. He said that he often gets calls from citizens who want to know which bank or institution owns the deed to their home, but can’t provide an answer because the law does not currently require banks to share this information with the city.

“Now, so often we don’t even know who owns our homes,” said Tang. “So when it comes to modifying or getting a reduced interest rate, you call your bank and [the bank] can’t help you. And if you come to my office, and ask ‘Who owns my mortgage?’ we don’t know. We are supposed to have that information, and we don’t because the banks have come together to hide it.”

Event organizers are also pushing for a bill that would require any banks wishing to do business with the state of California to disclose information to state officials about their lending and investment activities within the state. Banks are not currently required to do this.

Finally, the event organizers are also advocating that the state impose a foreclosure fee of $20,000 charged to the bank that owns each foreclosed property to mitigate the impact foreclosures have on the surrounding community.  The money would go to public education and public safety measures in the cities and counties that are most affected by multiple foreclosures.

While this, too, is still merely an idea, Desley Brooks said that she would be eager to support such a bill, and that many of Oakland’s communities have been deeply affected by the wave of foreclosures in the city. Brooks said her constituents frequently call her to complain that vacant properties on their streets are now home to squatters, gangs and drug dealers and that the blight associated with abandoned, bank-owned homes reduces the value of properties in the entire neighborhood.

“One of the things that this foreclosure crisis has done is attempt to kill hope in our communities,” Brooks said. “It has attempted to isolate people, but in reality we know that [the foreclosure] touches everyone on that block. Sometimes, it touches a whole city.”

Beverly Williams, a member of ACCE and one of the emcees for the event, said that the biggest victory of the morning was getting the politicians to sign a representative copy of SB 729 on camera in front of an audience.  “If [a politician] is willing to stand up for a bill like this first, before it even gets put to a vote, I think that gives us a lot more power,” she said.

Williams said that if rallies like this one continue to spread throughout California, and if any of the proposed legislation eventually becomes law, “we might actually see some prosecution for fraudulence.”

OCO member Mandy Bratt was also thrilled that the group was able to get so many politicians to come to the event, and even more pleased that they all signed the bill.  While she had hoped that the turnout would be closer to 1,500 or 1,600 people, she said the “spirit in here was really great today.”

Bratt wasn’t exactly sure what the next step would be in trying to reform the laws governing banks, but she had a pretty good idea of what she planned to do. “We just keep at ‘em!” she said.

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