Big City Mayors Unite to Call On Mortgage Loan Servicers to Provide Relief Against Foreclosures
San Francisco, CA–Mayor Edwin M. Lee today asked the nation’s five mortgage loan servicers that settled in the joint federal-state mortgage settlement to voluntarily pause foreclosure proceedings against homeowners who are at risk for foreclosure but could be eligible for assistance under the terms of the settlement.
San Francisco was joined by Fresno, Oakland, Sacramento and San Jose in a letter to executives at Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial to pause foreclosure proceedings against some borrowers until the settlement is finalized and the monitoring mechanisms are fully in place.
“A temporary pause in foreclosures provides relief to property owners and gives families an opportunity to remain in their homes,” said Mayor Lee. “We are calling on servicers to provide the time people need to access relief available to them under the federal-state settlement agreement that is now just months away.”
“Fresno is one of the cities hardest hit by the foreclosure crisis, and a significant percentage of our population is just now seriously delinquent and facing imminent foreclosure,” said Fresno Mayor Ashley Swearengin. “The costs of foreclosures on homeowners, neighborhoods and the cities are substantial. This pause will help people stay in their homes, resulting in an opportunity to stabilize our neighborhoods, and also have a positive impact on our economy.”
California State Attorney General Kamala Harris represented the residents of California at the bargaining table for the federal-state mortgage settlement and continues to advocate for opportunities to participate in the terms of the agreement.
The pause will allow cities to partner with servicing staff, the Attorney General’s office, and local HUD-certified counseling agencies to plan a comprehensive communication and outreach strategy to identify eligible borrowers and inform them of their rights under the settlement. As a result, borrowers will get the information they need to protect their rights, the time to organize their financial documentation, and time to evaluate their loans for modification.
Beginning July 1st, a monitor will oversee implementation of the servicing standards and consumer relief activities required by the agreement and identify where servicers are not in compliance.
While the process unfolds, Mayor Lee is asking to pause foreclosure proceedings against borrowers who could be eligible for relief under the judgments. The settlement is targeted at homeowners who could remain in their homes if a principal reduction or refinancing option were available. Under the settlement, borrowers must continue to make payments or risk losing protection from this temporary halt in foreclosures. Bank of America has already instituted a pause in foreclosure proceedings for its eligible borrowers. Wells Fargo previously instituted a pause in foreclosures until it had its consumer relief programs in place on March 1st.
Acknowledging that distressed borrowers are difficult to reach, Mayor Lee is forming a working group that will include the Attorney General, mortgage servicers, housing counselors, City agencies and community leaders to identify San Francisco homeowners who are at risk of foreclosure, but could be eligible for assistance under the terms of the settlement including immediate cash payments, principal reductions, short sales and refinancing.
Residents seeking modification will be able to use the City’s 311 system to find a housing counselor. The Mayor also announced that the Housing Trust Fund proposal has up to $15 million for housing stabilization for residents.
“As a City we have a collective responsibility to address the impacts of foreclosures on our communities,” said Supervisor Malia Cohen. “This collective responsibility includes the financial institutions and lenders that agreed to the state settlement. The myth that San Francisco is not suffering from the destabilizing effects of foreclosures is simply not true.”