How Large Financial Institutions Devastated CA Communities

Wed, Feb 17, 2010


It seems there is never any good news to report on the continuing mortgage crisis.
Experts agree, the situation is not improving. The numbers validate their claim. 632,573 California properties received a foreclosure filing in 2009, a 21% increase over 2008.

Our partners at the California Reinvestment Coalition released a special report last week titled, “From Foreclosure to Re-Redlining -How America’s largest financial institutions devastated California Communities.”

The report “looks at how banks, including the largest financial institutions, have acted in five California cities (Los Angeles, Oakland, Sacramento, San Diego, and Stockton) over the last three years. The report utilizes neighborhood-level analysis to show the combined negative impact of predatory lending, concentrated foreclosures, inadequate
foreclosure prevention solutions, and lack of access to mortgage lending credit to
help sustain and revitalize neighborhoods.

What the data indicate is an alarming trend of dispossession in neighborhoods with high concentrations of African American and Latino residents. Not only have these areas received a devastating amount of predatory home loans—and subsequent defaults—but they also
receive markedly low numbers of loan modifications and an accompanying bigger
drop in the origination of new conventional or prime loans than other

The CRC sites 4 Key Challenges:

• Lack of transparency for foreclosure prevention efforts
• Lack of accountability for banks
• Need to reverse the neighborhood impacts of redlining, toxic loans, foreclosures,
inadequate loan modification outcomes, and lack of access to credit
• Loss of household and community wealth

They recommend 5 action steps:

Pass Strong Regulatory Reform: CRA and CFPA
Pass Strong Regulatory Reform: CRA and CFPA
Improve Home Affordable Modification Program
Enforce Fair Housing and Fair Lending
Enforce Fair Housing and Fair Lending

You can read the full report here.

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13 Comments For This Post

  1. mike Says:

    I wrote BofA last summer alerting them I was not going to be able to continue affording my monthly payment and would like to modify. I have never been late for any payments…. ever, and my credit score is (was) 743.

    They wrote back and said the would like to help and put me on a modification program. The long and short of it is they continued to put me through an ambiguous review process, even after the three month trial period was up. I jumped through every hoop they sent my way and then some. I never talked to the same person twice since September of 09, and they never gave me any specific metrics to achieve so I could perform them.

    They denied me. They said my investor doesn’t participate in the program.

    Now here is the real kicker. Keep in mind, I never missed a payment for four years (until the denial), and my credit is great. I paid down my original loan from $595,000 to $585,000 to date. But last week Bof A told me I owe them (the pay off)is 609,000. WHAT? I now owe MORE than my original loan amount??? On May 1st it will be $613,000

    So, let me get this straight. In FOUR years I can reduce my principle by ten thousand dollars. But conversely, in just SIX EASY MONTHS on Bank of America’s loan modification program your principal will be INCREASED by OVER ten thousand dollars!!!!!

    Yeah, that’s how the loan modification program works! The bank puts you on a program “to help you” and in the end you owe more than the original amount you borrow! Wow! Aren’t they nice!

    This is wrong. Its really really wrong! It amazes me this is happening, these people (BofA) are crooks! How do they get away with this? But they will, of course.

  2. Donald Wong Says:

    Please allow me to post my journey. We walked out from our home on the 17th of March and headed directly for the airport with my wife. Few days earlier we handed two of our family members to a rescue home. It was heart wrenching and the following day I decided that I cannot leave without them. I decided to take them with me. However, the “kind lady” at the rescue home refused, instead in a short heartless email (Never met her) wrote: “….good luck.” I delayed departure seeking help, including Michael Finney 7 KGO On Your Side. They are not interested. Finally another Rescue Group advice me, to move on, it takes time and money. I wish you could feel the pain I had to endure.

    Nevertheless, I headed for the place where I could wait for my wife, even for a grown man (seasoned from hardship) I cannot resist the tears when I parted with my dear wife. I had finally settled in a cheap rented place all alone. I spend much of my time reading on-line NY Times, PBS, C-Span and playing endless MS’s Solitaire on my used laptop. You might want to read my posting in NY Times how I feel about Goldman Sachs and being left out in the cold by the present Administration who, promised us “CHANGE.”

    “NY Times S.E.C. Accuses Goldman of Fraud in Housing Deal”

    To: NY Times
    From: COBZY

    “Not only should SEC go after Goldman Sachs but all Fat Cats from Walls Street who cooked up the Sub Primes and other investment gimmicks. Why should we suffer while they benefited and continued to benefits and we lost everything? Should there be class action lawsuits you bet your sweet life we will be on board. We have not forgotten Obama’s promised help is coming, while we waited and waited. We had to walk out and refuse to take the “dirty” money to conned us into short sale our home. We chose to walk out instead, I lost my two Cocker Spaniards and separated from my wife. Life can never be the same again and including the millions other American. It is sickening to see the so call “Non-Profit” organization (getting Federal Funds) to consuls us while we were trying to find relief. Mind you how these credit counseling help us when we owe not a dime in credit cards debts except hospital bills and mortgage?”

    Donald Wong

  3. Suzanne Hofer Says:

    This is the same type thing that has happened to me, and now my home of 18 years is being sold at auction on May 5. First an illegal loan was giving to me at a monthly payment I couldn’t afford I made payments for 3 years without ever being late. The loan modification they offered was 6,000 more than what I owed I was given a 276,000 loan on a home that is now worth only 125,000 at best all on a 12.50 an hour job from Option One Mortgage. It has been sold to American Home Mortgage Servicing Co. Which is just another Predatory Loan Co. Why is there no accountability with these banks? How can a home owner protect themselves? I am a 50 year old that doesn’t have time to start over. My daughter and her 3 children live with and depend on me what can I do to save my home?

  4. B Butterton Says:

    It is said that the Internet empowers the common man. It is said that it was the intention of Apple’s founders to give that power to the people. It has. Now dear people, you need to harness that power. You need to organize somehow, and if you do then you can force the change you want. You need to take back America, make it’s corporations accountable, by force if necessary, and your government once again of, by and for the people. Don’t you see…you are the ghosts in the machine. You work, you buy feeding back into the machine, and you are not the survivors, the machine survives and there will always be more workers. They take away your health insurance, your savings, your pensions, your homes, and even your lives. Things are out of balance. Only you can put them right. Do you vote? Become involved in your government, communities, schools? Are you ethical in your own lives? Who then should throw the first stone? It begins with you and it will end with you, with regard to governance, the environment, energy issues, water issues, crime, education…all of it. One person can make a difference. My mother died a few months ago and something hit me hard then. The stuff doesn’t matter, none of it. We cannot take it with us. I would trade anything, everything to have my mom back again. If they take your house unjustly let it go and fight back by participating in the solutions. Your life is not over it is just altered and in some small way the other is us. We are all responsible. We created these monsters. We are the employees dreaming of the corner office, we are the lobbyists, we are leaving our children at home alone so we can both work so we can live in a bigger house…aren’t we? It begins with you. It begins with me. This is not what I intended to write because I may soon be in the same position as most of you but it is time for a different kind of message. Let us not be victims. Let us be warriors and fight back in ways that create and exlemplify what we would have our nation be. Organize. Use the Internet. It is yours. My heart goes out to you all.

  5. Donald Wong Says:

    In Respond to B Butterton:

    I hear you and I agree with you wholly heartily. we create it and continue to feed this “MONSTER”. I came across KTEH Website while searching for relief and begging to talk to anyone of our anguish. All the while predictors calling, email and flyers all in the guise of “Helping.” I watched during and after the Election is Help really here? Before our last reserve depleted, we decided to throw in the towel and make plans to walk out. Many homeowners make the mistakes, dreaming that Obama’s will keep his promised, by continuing paying endless until they ran out of their saving and become homeless. I wrote to Elizabeth Warren Chairperson of COP, telling her our story in Dec, 08. Nothing came out of it. My initial draft calling homeowners to organize, but on second thought I did not want to offend the Panels and KTEH for theirs afford to make the public aware of the problems. I will be respectful. There are people still willing and genuinely trying to help. See my postings (August 22 and August 24)


    As I am typing, NY Times reported in their website:”U.S. Said to Open Criminal Inquiry Into Goldman.” We should not wait for the Justice Department to make it happen. I am thinking of Dr. Martin Luther King marched to Washington in 1963, to deliver his famous speech. “I Have a Dream….” If anyone coming forward, I will drop everything and join him or her. What I got to loose, I have nothing except two small suitcases (two used laptop computers, cables, cd and accessories) and a few clothes with me. That it! I wanna see “TEETH” that bites into the FAT CATS and Goldman Sachs break into smaller companies, that includes the Banks! No one is above the laws. If I loose my home and love ones they too should bear the same consequences. If KTEH permit, I will post my email here for anyone wanna communicate with me.

  6. Roxy Says:

    Mr. Wong and others, I feel your pain. Your stories are my story and the stories of countless other Americans.

    These banks and financial institutions took the American Dream and flushed it down the toilet, and all for their own unjust enrichment. The banks, government, and judicial system has failed the American people.

    Where do we go from here? Where do we turn for help? How do we help ourselves and each other? What incentive is there to work hard for a dream that can so easily be ripped away from us?

    I want to be strong and lift myself up from this rut that I didn’t even create. Sometimes I even entertain the idea of starting over again but then I realize that at my age, it just may not be realistic.

    It breaks my heart to think that my parents migrated to this country in hopes of giving their children a better future. Presently, I would probably be better off back in the third world country they came from. You see, there, this behavior is to be expected. Never did I think it would happen in America.

    Maybe it’s all still too fresh. Maybe I will differently in 9 months. Right now, I just feel disappointed, disillusioned, and exhausted.

    I do know this, I will never put my trust in man again.

  7. Melinda Says:

    @mike….I feel ya, I too have a BofA loan and have been asking for the “making homes affordable” program for almost a year now…BofA offered me a modification (their modification) not MHA, in 8/09…and they increased my principle amount owed from 511K now to 524K…where in the hell did that xtra money come from? I singed the agreement letter and started making the agreed payment only to find out 9 months later that they did not process that modification and now they say I owe 1800.00 in late fees??? and 20K in arrears. I feel its time for us to take back our country and make these banks & people accountable for ruining peoples lives, wheres Obama in all this??? what happened to his PROMISE to help the middle class familys, im still waiting..I say do not vote him in for another term…I am thinking about walking out of my home now as this mess has made me ill and I am a wreck…im now hoping that CRC can help me out…if not, I am done.

  8. Ron Says:

    I was in the middle of a loan modification with Citi Mortgage. They have another branch of their company do the fact finding and or gathering. The MOS Group (Mortgage outreach Services) They would tell me that I was complete and that they were sending back my paperwork for the under writers to approve or not approve. Then they called me and said that I need the declaration page from my Insurance company. Citi mortgage already has a declaration page from my Insurance company. While I was getting a copy of the declaration page they sold my home. They had put notices on my door twice before and given me 3 certified letters saying they were going to sell my home on steps of the courthouse. I would then notify the “MOS Group” and they would tell Citi”hey, we are still getting info from him for you” and they would post pone the sale. This last time they did not give me certified letters or notice on my door. The citi mortgage person said they just put it in the newspaper somewhere this time. I came home to find a new notice stating that my home was sold and to contact this realty team to find out term of “getting Out”.
    Does not sound like they had honest intentions with me.
    And, here is another question. Does Obama know they do this, was this his intention? I think not!!! All I needed was this information to be passed on to keep my modification in line.

    I need answers and help!!!!!


  9. Catherine Says:

    I too have BofA; last June I paid a company, Option Mediation Services ($4,000) to help me obtain a loan modification from BofA. I got a trial period for 7 months, was told by Option that BofA “forgave” the money we didn’t pay for the year–that was a lie!! Now BofA denied the final modification, saying I don’t qualify or the investor of the loan is the one saying they don’t want to modify the loan, not BofA. Now “continue to pay” however foreclosure proceedings with start. I even went to HUD and they submitted my paperwork twice now and I “still don’t qualify” howeve they don’t explain why? The last letter I received from BofA stated “there are not other options for me”–Banks want to help, yeah right!!!! They are not helping me!!

  10. Reuben Nieves Says:

    Everyone is missing one critical factor. The non judicial foreclosures that the banks have done here and in all non judicial states, which is committed by federally chartered bank corporations created for public and national purposes are unconsitutional. The eviction procedure that may follow would therefore be an abuse of process and since it implicates the 5th amendment violation in the foreclosure is itself a 14th amendment violation. The purpose of the eviction is to complete the deprivation of due process begun by the power of sale foreclosure.
    I have the research to show that the pwer of sale foreclosure is unconstitutional

  11. Reuben Nieves Says:

    as an addendum. you can email me at for the research

  12. Suzanne jeffers Says:

    Is there any recourse to file a wrongful foreclosure by Wells fargo/Wachovia/countrywide after the fact? There were so many things that went wrong and I answered the door one day to find out the “loan” had been sold/foreclosed. I had $300,000. down and a $500,000. loan. The bank just sold the same condo for $395,000. Is there ANYTHING I can pursue? As I was waiting to find out about a loan mod all of this occured. PLEASE let me know your thoughts and I can fill in the details.

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