CRC Calls on the Fed and BoA: No More Foreclosures

Dozens of demonstrators chanted loudly against greed, home foreclosure and subprime lending. They picketed outside the Federal Reserve Bank in Los Angeles April 28 with signs that read “Bank of America: Don’t Foreclose on America,” and “American Dreams, Not Countrywide Schemes.”

Some were mortgage counselors who had seen too many working families lose their homes because they were sold bad loans. Others were Countrywide borrowers on the brink of foreclosure, exhausted and frustrated after spending months on the phone desperately seeking a loan modification that would keep them in their home.

All of them had one clear message: Bank of America should not be allowed to acquire Countrywide Financial without a plan that addresses how they will help the 600,000 Countrywide borrowers currently faced with foreclosure.

The demonstration took place after a press conference hosted by the California Reinvestment Coalition, where mortgage borrowers and counselors shared their experiences with Countrywide, and their fears about the merger. CRC members and allies called on Bank of America to offer a business plan to solve Countrywide’s huge role in the mortgage crisis.

The actions were held on the first of a two-day public hearing before the Federal Reserve Board about the merger. The hearing was scheduled after CRC and other advocates wrote letters demanding that the Fed hear the public’s concerns about Bank of America buying the country’s largest predatory mortgage lender.

CRC staff and members presented testimony at the hearing. Among their requests, they asked Bank of America to commit to modifying loans at affordable, fixed rates, and to ensure that tenants whose buildings are in foreclosure won’t be evicted.

In response to the community activism, Bank of America committed to modifying $40 billion in problem loans from at least 265,000 borrowers within the next two years. The Bank also publicly stated that tenants will not be evicted for at least 60 days after foreclosure, and they will be offered “cash for keys” if they agree to vacate their properties sooner. Bank of America also committed $20 million for housing counseling – though only $1.5 million will be spent in California – and $15 million to assist the purchase of foreclosed properties by nonprofit organizations.

The broad statements made by Bank of America staff were positive but not specific enough to ensure real opportunities for homeowners, neighborhoods, tenants and others affected by the wave of foreclosures that has swept California.  CRC believes 75 percent of subprime loans can be modified. Families will be able to stay in their homes if the principal on their loan is lowered to match the real current value of the home, and if an affordable fixed rate loan is offered.  Without these responsive actions by Bank of America (and other lenders), California neighborhoods, cities and economy is in danger.

The acquisition, anticipated to conclude in July, will make Bank of America the country’s largest mortgage lender and consumer bank. CRC continues to be concerned about this massive transaction during this historical time of crisis, and will keep striving to hold the Federal Reserve and Bank of America accountable to California communities.

CRC would like to recognize the members and allies who participated in the press conference and demonstration: Affordable Housing Services (Pasadena), California Capital, Community Housing Development Corporation (Richmond), East LA Community Corporation, Esperanza Community Housing Corporation, Korean Churches for Community Development, Legal Aid Foundation of LA, Montebello Housing Development Corporation, Multicultural Real Estate Alliance for Urban Change, Nevada Fair Housing, Orange County Community Housing Corporation, Pacific Asian Consortium in Employment, Public Counsel, Service Employees International Union and Valley Economic Development Center.