Coalition of Consumer Groups Calls for Foreclosure Moratorium
Under the umbrella of the California Reinvestment Coalition, 150 community and consumer organizations recently called on some of the country's largest mortgage lenders "to declare a temporary moratorium and direct homeowners to financial solutions that will allow them to keep their homes" across the state of California.
In a company release, CRC warned that as housing prices decline, "the foreclosure crisis will escalate." Established to advocate for equal access to financing for low-income and minority communities, CRC represents over 245 nonprofit organizations and public agencies statewide.
"Many California homeowners are facing foreclosure because they were misled by unscrupulous mortgage brokers and lenders," said CRC associate director Kevin Stein. "We are asking the largest lenders in the state to take leadership so that families can keep their homes and California's economy won't suffer."
CRC said it has sent letters to the chief executive officers of Bank of America, Citibank, Countrywide Home Loans, Merrill Lynch, Washington Mutual and Wells Fargo.
ReatyTrac data show California is one of the states hardest hit by the foreclosure disaster with 31,434 foreclosures reported in March alone, which is three times higher than the same month a year ago. Also, California features a foreclosure rate twice the national average, according to the same source.
Given the current housing crisis caused by the approach of the expected reset time for a large number of adjustable-rate mortgages, especially in the subprime marketplace, Mr. Stein said, "California is in the midst of a foreclosure crisis" that could rob hundreds of thousands more of their homes.
In the letter, CRC asks these lenders to stop foreclosure procedures for the next six months and try to negotiate possible solutions for homeowners. It suggests lenders cooperate with various community organizations such as the groups that have joined CRC in this call to the banks. All these groups, CRC notes in a company release, "have a common goal of providing affected homeowners access to financial advisors and services so they won't join the thousands in California who already have lost their homes." In addition, CRC reports in 2006 up to 26 metropolitan areas in the state suffered housing price declines "which limit the ability of many borrowers to refinance."
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