Troubled Oakland homeowners packed the floor and gallery of the Oakland City Council chambers Saturday morning to gather information from city, state, and national officials and private home counseling organizations on how to keep their dwellings from going into foreclosure.
Folding chairs had to be brought into the council chambers to accommodate the crowd, and it was standing-room only along the back walls.
The crisis surfaced when many homeowners around the country bought homes, or were lured into taking out mortgages, based on loans that initially had affordable monthly payments, but then saw those monthly payments balloon into the unaffordable after a period of a few years.
Banks and other lenders have been foreclosing on these homes in large numbers over the past two to three years, collapsing what had been a booming housing market and drying up available capital.
The three-hour Consumer Home Mortgage Town Hall, the first such community gathering in the state since the subprime mortgage crisis hit, was co-sponsored by a coalition of political leaders, including Oakland Mayor Ron Dellums and several members of the Oakland City Council, Oakland City Attorney John Russo, Congressmember Barbara Lee, Assemblymembers Sandré Swanson and Loni Hancock, and several state and national agencies.
Oakland has been particularly hard-hit by the flood of home foreclosures growing out of the collapse of the subprime mortgage system, with African-American and Latino communities the most devastated.
Giving out a series of bleak statistics, Oakland City Attorney John Russo said that in two East Oakland zip codes alone—94621 and 94603—15 of every 1,000 homes were seized by banks in 2007 in foreclosure actions, a total of 1.5 percent of all the homes in those zip codes.
Russo said that African-American and Latino borrowers were four times more likely than Anglo borrowers to be shunted into the shakey, hi-cost subprime loans that are causing so much of the foreclosure problem, even when homeowners from those three racial groups had similar incomes and financial data.
Nationally, 2.2 million subprime loans have gone into foreclosure in recent years.
Congressmember Lee said that 180,000 of those foreclosures were in California in the two years of 2005 and 2006. In Oakland alone, Lee said, “21.3 percent of subprime loans made in 2006 are expected to go into foreclosure.”
Lee said that Congress has several bills passed or pending to ease the crisis, but that President George Bush “has been blocking most of those efforts.” But she said that she and other Congressmembers are moving forward with legislative action. “This could have been prevented,” Lee said. “The lending laws in this country could have been reformed.” She added that her ultimate goal “is to have these predatory loans wiped off the books.”
Dellums told the gatherers that the Oakland workshop was “the local response to a national epidemic. Thousands of people stand on the brink of financial disaster. Our obvious hope is that everyone can keep their homes and move forward. But we want options for those who cannot.”
The Oakland mayor said that “in the not-too-near future,” he would be convening a meeting of local bankers and lenders “to step up and help in this crisis.”
That concern was echoed by Assemblymember Swanson, who said “I hope today that this will be a message to lenders. We ask them to do something. Help work out solutions with consumers to help ease the pain. Lending institutions are going to have to have some compassion. We are all in this together.”
Following short presentations by local and state leaders, residents split up into several home mortgage workshops held throughout City Hall, as well as to receive private, one-on-one counseling.
An hour-long workshop on foreclosure mitigation in one of the City Council hearing rooms, presented by Community Housing Development Corporation of North Richmond senior homeownership counselor Katrina Vizinau, showed the anguish and the pending disaster being faced by many local homeowners.
One woman asked advice on how she could hold off the pending foreclosure sale of her longtime home. The sale was scheduled for Tuesday, giving the woman only one more business day to act.
After several suggestions came from moderator Vizinau and audience members, many of them with either personal experience or expertise in homeowner foreclosure problems, one woman chimed in, “Whatever you do, don’t waste your time contacting HUD (the federal Department of Housing and Urban Development). They’ll leave you for dead, they’re so slow. Your house will be gone before they come out to help.”
Vizinau repeated over and over that unless they were extremely knowledgeable about mortgages and had extensive sales experience, homeowners with pending foreclosure sales should not try to negotiate with bankers or other lenders themselves. Instead, she suggested homeowners contact a counselor from one of several local credit counseling agencies familiar with home mortgages to do the negotiations for them (see sidebar for list). Vizinau said that in many instances, she and other counselors have been able to forestall imminent home foreclosures and work out new payment plans affordable to beleaguered homeowners.
“Many of the lenders are now saying the crisis is so great, they don’t want to foreclose,” Vizinau said. “They want to work with the homeowners.” But she said that the message often hasn’t gotten down to company agents who are “working off of old screens.”
Vizinau said that counselors can help push the discussion up to higher levels at the lending agency, where appreciation for the devastation of the many foreclosures on the lending institutions themselves is better appreciated.
Earlier in the general session, Carrie Lopez, director of the California Department of Human Affairs, urged homeowners to contact their lenders as soon as they begin anticipating problems in meeting their mortgage payments.
“Pick up the phone and negotiate with your lenders,” Lopez advised. “Don’t let it get out of hand.”
Dale Bonner, Secretary of the California Business, Transportation, and Housing Agency added that “there are a significant number of people in the state who, we learned, never had a conversation with their lenders about their payment problems until their houses went into foreclosure. Either they never called the lender or, when they did, they got a negative response. We found both of those to be very distressing.”
The Oakland City Attorney’s office has set up a foreclosure hotline at 510-BE-ALERT (510-232-5378) for homeowners who want to get advice on possible mortgage scams, and for homeowners facing pending foreclosure or for tenants in buildings that are facing pending foreclosure.
Local credit counseling agencies that can provide counseling to affected homeowners:
ACORN Housing Corp.: 436-6532
Community Housing Development Corporation of North Richmond: 412-8920
The Unity Council Homeownership Center: 535-7181
NID-Housing Counseling Agency: 268-9792
Housing Rights, Inc.: 548-8776 ext. 310
NeighborWorks Rep: (877) 316-8913