In a counterattack against Wall Street's abusive practices, grassroots groups and California government leaders are joining forces to exact significant concessions from the big banks and bring mortgage relief to hundreds of thousands of homeowners.
Flanked by state legislative leaders, California Attorney General Kamala Harris said Feb. 29 she is co-sponsoring the legislation, "including an end to 'dual tracking,' in which banks pretend they are open to modifying someone's mortgage, while - at the same time - foreclosing on their home."
Lenders must also offer homeowners a single point of contact for questions about their mortgage, and face fines of up to $10,000 for "robo-signing" - the mass production of false and forged mortgage documents.
Attorney General Harris and the ReFund California Coalition (RFCC) recently came together with Assembly Speaker John Pérez and Senate President Pro Tem Darrell Steinberg to introduce the California Homeowner's Bill of Rights.
All three government officials, progressive-minded Democrats, are responding to a wave of pressure from California homeowners, RFCC and allied groups advocating for mortgage relief and justice.
RFCC is a coalition of nearly 50 different community, faith, labor, consumer rights and human service organizations working to make Wall Street banks accountable and reinvest in hard-hit communities.
"While she (Harris) works the inside," the Alliance for Californians Community Empowerment (ACCE) said in a recent statement, "we need to grow a mass movement on the outside to make calls, write letters, and mobilize Californians to force our legislators to vote with homeowners and not the Big Banks." ACCE is a ReFund coalition partner.
The set of 12 bills, six in the Assembly and six in the Senate, also call for:
- Community tools to prevent blight after banks foreclose upon homes
- Tenant protections after foreclosures
- Enhanced law enforcement to defend homeowner rights, paid for by fees imposed on banks
- A special grand jury to investigate financial and foreclosure crime
The California initiative is all the more significant when compared with states where Republican-controlled state legislatures and officials bend over backwards to favor the big banks.
Last November, Vivian Richardson and Carolyn Gage, San Francisco Bayview residents living one block from each other, fought their respective banks despite pending and actual eviction. Within a month of their actions, both banks worked out solutions that let them stay in their homes.
Gage and Richardson are among ACCE's Foreclosure Fighters who join homeowners in their homes when they refuse to move during eviction proceedings or reoccupy their homes if evicted.
"We continue to lose families every day. These are our neighbors, people we grew up with. Our community continues to be destroyed and displaced," Gage said recently. "I stood up and fought and I got my house back. And until these banks do the right thing, this is what we're going to have to do as a community to take our community back."
The California legislation builds on the estimated $18 billion in borrower benefits and relief that Californians won as part of a $25 billion multistate settlement to penalize robo-signing and other bank servicing and foreclosure misconduct.
Participating in the settlement are Citibank, JP Morgan Chase/Washington Mutual, Bank of America/Countrywide, Wells Fargo/Wachovia, and Ally Financial.
The agreement comes after California left the multistate negotiations last September when relief to California was estimated at $4 billion.
Harris insisted on more relief for the most distressed homeowners, on stronger enforcement provisions, and that California and other states preserve key investigations into mortgage misconduct.
The legislation will strengthen those protections, make them permanent and apply them to all mortgages in the state.
Harris has also secured a separate state pact with Bank of America, Wells Fargo and JP Morgan Chase including significant financial penalties if the banks don't meet a minimum of $12 billion in principal reductions and short sales for California homeowners.
Photo: Calif. Attorney General Kamala D. Harris with legislative leaders Assembly Speaker John Perez, left, and Senate pro Tem Darrell Steinberg, right, unveil the California Homeowner's Bill of Rights, Feb. 29, in Sacramento. Paul Kitagaki Jr./The Sacramento Bee/AP