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New Report Finds Continuing Foreclosure Crisis Led to $192.6 Billion in Lost Wealth in 2012; Households in Communities of Color Hardest Hit
- With 13.2 million homes still underwater, principal reduction could save underwater homeowners an average of $7,710 a year and boost U.S. economy by over $100 billion
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Seattle, WA – The foreclosure crisis continued to destroy wealth on a large scale across the U.S. in 2012, with $192.6 billion in lost wealth, an average of $1,679 per household, nationwide. The most devastating impacts were felt in communities of color: in zip codes with majorities of people of color, average lost wealth per household was $2,198, over 1.7 times the average lost wealth of $1,267 in segregated white zip codes.
These are among the key findings of a landmark study, “Wasted Wealth: The Foreclosure Epidemic, a Generational Crisis for Communities of Color,” released today by the Alliance for a Just Society, Home Defenders League, and The New Bottom Line. Wasted Wealth analyzes 2012 foreclosure data to calculate lost wealth, examines the ongoing threat of foreclosures-in-waiting, and explores the economic impacts of principal reduction.
“While the impacts of the housing crisis have been felt broadly across communities and across the country, these data shows that there’s a clear racial dimension to the foreclosure crisis: households in communities of color are the hardest hit,” said report co-author Jill Reese, Associate Director of the Alliance for a Just Society.
The full report, including national numbers, data for all 50 states, and special breakouts for 19 cities, is available here: http://bit.ly/wastedwealthreport
“It’s as if my life, security for my family, a roof over our heads, is a game to the banks,” says homeowner Grace Alexander of Newark, NJ. “There are four generations of us living under that roof and our impending homelessness is not a game to us.”
Homeowners like Grace Alexander have worked with Home Defenders League and New Bottom Line coalitions nationwide, to push Congress and the Administration to move on principal reduction.
In addition to wealth already lost in communities like Harris’, the report found there were 13.2 million underwater mortgages still on the books in 2012 and another $221 billion in wealth at stake if a share of these mortgages go into foreclosure.
“The solution to the continuing foreclosure crisis is clear: we need principal reduction, and we need it now,” says Tracy Van Slyke, Director of the New Bottom Line. “President Obama's nomination of Rep. Mel Watt as the new director of the Federal Housing Finance Agency is a step in the right direction. It's time for Congress to confirm this nomination immediately in order to support homeowners now, strengthen communities and get our economy back on track.”
Key findings from the report include:
* The foreclosure crisis continued to destroy wealth on a large scale in 2012: $192.6 billion in wealth was lost due to foreclosures across the U.S. in 2012, an average of $1,679 in lost wealth per household.
* Foreclosures had a disproportionate impact on communities with above average populations of people of color: In zip codes with proportions of people of color above the national average of 16%, average lost wealth per household was $2,008.
* The most devastating impacts of the ongoing foreclosure crisis were in majority people of color communities: Zip codes with majority people of color populations saw an average of $2,198 in lost wealth per household, over 1.7 times the average lost wealth in segregated white zip codes.
* More than 13 million homes are still underwater and at risk of foreclosure and more lost wealth: For reporting zip codes, there are at least 13.2 million underwater mortgages. If action is not taken to prevent a share of these mortgages from going into foreclosure, Americans stand to lose nearly $221 billion in additional wealth.
* A strategy of principal reduction would save money for homeowners, boost the economy, and create jobs: A principal reduction program could produce average annual savings of $7,710 per underwater homeowner, boost the U.S. economy to the tune of $101.7 billion, and create 1.5 million jobs.
Read the full report: wastedwealthreport.com/download
The New Bottom Line is a national campaign fueled by a coalition of community organizations, congregations, labor unions, and individuals working together to build a movement that challenges established big bank interests on behalf of struggling and middle-class communities.
The Home Defenders League is a national movement of underwater homeowners and our allies fighting Wall Street to get back what Wall Street stole from us and for a stronger economy for all of us.
The Alliance for a Just Society is a national coalition of state-based grassroots community organizations that address economic, racial, and social inequities to advance economic justice and generate increased power and sustain social change.
Contacts:
Alliance for a Just Society: Rahul Gupta, (206) 419-9599, rahul@allianceforajustsociety.org
Home Defender’s League & New Bottom Line: Nick Sifuentes, (310) 866-1692, nick@berlinrosen.com
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FROM BRIAN KETTENRING, CAMPAIGN FOR A FAIR SETTLEMENT:
Below is a statement for attribution from Brian Kettenring, National Coordinator of the Campaign for a Fair Settlement. CFS is the lead watchdog group monitoring the National Mortgage Settlement, which was executed one year ago tomorrow, February 9, 2012. Our statement:
Tomorrow is one-year since 49 states agreed to a $25b settlement with the big banks to help compensate for their role in causing the housing crisis. The National Mortgage Settlement was supposed to help people stay in their homes. But one year later we have yet to see a full accounting of how the money has been spent, states are diverting large portions of the funds to meet their deficits instead of helping homeowners, and the hardest hit – particularly communities of color – are not seeing relief. Short sales and dual tracking continue, and the banks themselves are spending more to move people out of their homes than to keep people in them. The bottom line: a settlement that promised justice and relief for homeowners has instead continued business as usual for mortgage servicers and financial institutions.
As the President begins his second term, the Obama Administration needs to move swiftly to ensure real Wall Street accountability and oversight, as promised. This week's S & P case, and yesterday's news about JPM show that there are still cases to be brought and justice to be won for homeowners and taxpayers. We expect the President and the Department of Justice to be on our side, and pursue these cases aggressively.
Contact Info
nick@berlinrosen.com
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(BPRW) Wells Fargo Announces Settlement with U.S. Department of Justice Regarding Mortgages
- • Reaffirms Commitment to Fair and Responsible Lending • Plans to Discontinue Funding Mortgages that are Originated, Priced and Sold by Independent Brokers • Announces Agreement with City of Baltimore Dismissing Litigation and Launching Program to Support Local Housing Recovery -
(BLACK PR WIRE) – SAN FRANCISCO – July 12, 2012 – Wells Fargo & Company (NYSE:WFC) announced today a definitive settlement agreement between Wells Fargo Bank, N.A. and the U.S. Department of Justice (DOJ) that resolves the DOJ’s previously disclosed claims that some Wells Fargo mortgages may have had a disparate impact on some African-American and Hispanic borrowers.
The DOJ claims are based on a statistical survey of Wells Fargo Home Mortgage loans between 2004 and 2009, and the claims primarily relate to mortgages priced and sold to consumers by independent mortgage brokers. While Wells Fargo denies the claims, the company has agreed to pay $125 million to borrowers that the DOJ believes were adversely impacted by mortgages priced and sold by independent mortgage brokers through its Wholesale channel.
Wells Fargo is settling this matter solely for the purpose of avoiding contested litigation with the DOJ, and to instead devote its resources to continuing to provide fair credit services and choices to eligible consumers, and important and meaningful assistance to borrowers in distressed U.S. real estate markets.
This settlement also resolves pending litigation filed in 2009 by the State of Illinois on behalf of borrowers there, and resolves an investigative complaint filed in 2010 by the Pennsylvania Human Relations Commission.
While not part of the DOJ settlement, Wells Fargo, on its own volition, also announced today that on July 13 it will discontinue funding mortgages that are originated, priced and sold by independent mortgage brokers through its mortgage Wholesale channel. Mortgages sold by independent brokers in this manner currently represent five percent of the Company’s home mortgage funded volume. Mortgage brokers operate as independent businesses and are not employed by Wells Fargo. Therefore, Wells Fargo cannot set loan prices for independent mortgage brokers nor control the combined effect of the negotiations that thousands of these independent mortgage brokers conduct with their customers. After July 13, 2012, the Company will no longer accept new applications for loans originated by independent mortgage brokers through its Wholesale channel, but will work to ensure existing applications are processed and closed.
“Wells Fargo is settling this matter because we believe it is in the best interest of our team members, customers, communities and investors to avoid a long and costly legal fight, and to instead devote our resources to continuing to contribute to the country’s housing recovery,” said Mike Heid, president of Wells Fargo Home Mortgage. “Wells Fargo takes pride in serving the home ownership needs of all of our customers, and we are fully committed to fair and responsible lending. Through our separate decision to no longer fund mortgages through independent mortgage brokers, we can control how that commitment is met on every mortgage that Wells Fargo makes.”
The Company stopped making subprime loans through independent mortgage brokers in 2007 and stopped all subprime home lending in 2008. During the period in which Wells Fargo originated subprime loans, the Company implemented industry-leading procedures to identify applicants who might be eligible for a prime-rate product. In keeping with Wells Fargo's commitment to strong fair and responsible lending controls, the Company has agreed with the DOJ to undertake an internal lending compliance review of a small percentage of subprime mortgages delivered through its Retail channel during the period of 2004 to 2008 and will rebate as appropriate.
Working with the DOJ, the Company also will provide a total of $50 million to community improvement programs in the City of Baltimore and in certain areas within seven metropolitan statistical areas identified by the DOJ as being most in need of support to recover from the housing crisis: Washington-Arlington-Alexandria, DC-VA-MD-WV; Chicago-Naperville-Joliet, IL-IN-WI; Philadelphia-Camden-Wilmington, PA-NJ-DE-MD; San Francisco-Oakland-Fremont, CA; New York-Northern New Jersey-Long Island, NY-NJ-PA; Cleveland-Elyria-Mentor, OH; and Riverside-San Bernardino-Ontario, CA. This program will be modeled after Wells Fargo’s successful NeighborhoodLIFTSM program, launched earlier this year.
The Company separately is entering into a collaborative agreement with the City of Baltimore in which the city will dismiss the lawsuit it initially filed against Wells Fargo in January 2008. In keeping with the Company’s commitment to continue lending in Baltimore and to supporting the area’s financial recovery, Wells Fargo will provide $4.5 million of the $50 million for community improvement programs to the City of Baltimore, and will grant the City of Baltimore $3 million in additional funds for local priority housing and foreclosure-related initiatives. Wells Fargo also has set a five-year home-mortgage lending goal for the Baltimore area.
“Our commitment to our customers and to turning the housing market around is stronger than ever,” Heid added. “We will continue to offer education and meaningful choices through our Retail and Correspondent mortgage lending operations, including an important emphasis on providing assistance to communities affected most by the economic downturn.”
Customers can find more information about Wells Fargo’s commitment to fair and responsible lending practices at www.wellsfargo.com/fairlending.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.3 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 stores, 12,000 ATMs, the Internet (wellsfargo.com), and other distribution channels across North America and internationally. With more than 270,000 team members, Wells Fargo serves one in three households in America. Wells Fargo & Company was ranked No. 26 on Fortune’s 2012 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially.
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JOIN MASS JOINDER Complaint for Wrongful Foreclosure, Fraud, Negligence, Quiet Title, and Unfair Business Practices Against Banks
If you are a victim or have been a victim of mortgage fraud and you have been injured by a bank, given the run-around, and/or denied your rights to apply for a HAMP Loan modification, have beeen illegally foreclosed upon, or are in the process of being foreclosed upon by a bank?
Join homeowners from across the country taking a stand against banks. Send your complaint, plus your name, and your mortgage lenders name and address to Grace Adams at graccointern@msn.com. Or, call (248) 651-6775.
There are no attorney fees involved in this joinder lawsuit. Prepare and submit your Complaint to stop a lender from illegally foreclosing upon you.
So what does this all mean to you? Simply put there are two key tenets to a Mass Joinder Lawsuit.
Individual settlements. Unlike a Class Action suit where the plaintiffs all share one judgment after the attorneys take their fee. In a Mass Joinder since each plaintiffs’ individual loan is unique, and therefore the bank may have violated different laws during it’s handling of said loans, each home owner may have unique demands and gain the benefit of having everyone’s complaints being added as weight to their individual case. Examples of those demands are:
(Principle Reduction, Full Lien Strip, and Monetary Compensation)
From the standpoint of protecting yourself from foreclosure, this action can assist in preventing a foreclosure from going into a sale of the property. The legal term is known as a “compulsory counterclaim” which simply means that if one party sues another (i.e. a bank sues a borrower to recover the property in the mortgage, and then the borrower sues the bank, i.e., Mass Joinder Lawsuit, neither party can execute a legal action against the other until the case is either settled or won by either party.
Types of Wrongful Foreclosure
Wrongful foreclosure is where a bank or mortgage loan servicing agent forecloses on a property without a legal right to do so. In this situation, banks often wrongfully seize the home and possessions which basically amounts to an illegal home invasion. In Michigan, when a wrongful foreclosure occurs, the wronged homeowner has the recourse to challenge the foreclosure in court and request economic damages.
Wrongful foreclosures can occur under the following situations:
- When the homeowner has no loan with the foreclosing bank;
- When there has been a violation of the Truth and Lending Act
- When a lender has used predatory or unconscionable lending practices
- When the homeowner is up to date on all mortgage payments
- When the foreclosing occurs without statutory due course
- When there has been a servicing error
- When the bank forecloses on a house sold in a short sale
- When the bank does not offer or approve a statutorily required loan modification
- When the homeowner is up to date on payments under a valid loan modification agreement
- When the bank does not disclose who the lender is that is foreclosing
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The articles on this website are provided for information purposes only. BlackRefer.com does not accept any responsibility or liability for the use or misuse of the article content on this site or reliance by any person on the site's contents.
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BlackRefer.com does not endorse or recommend any article on this site or any product, service or information found within said articles. The views and opinions of the authors who have submitted articles to BlackRefer.com belong to them alone and do not necessarily reflect the views of BlackRefer.com.
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