The Church in Action...



Rodney D. Coates
Professor of Sociology and Gerontology
Miami University
Oxford, Ohio 45056
 513 - 529 1590

Faith-Based Effort To Avert Foreclosures

By Carolyn Said, Chronicle Staff Writer

San Francisco Chronicle - October 28, 2008
<
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/10/28/MNI613P6T3.DTL>

"Our purpose is to stand up for real change," said Raul
DeAnda, a church member addressing the packed room of
men, women and children, many waving colorful flags with
slogans in English and Spanish, such as "families first"
and "good business sense." A strong desire for action
was palpable in the prayers and testimony from
foreclosed homeowners. There was also some anger
stemming from a backlash against the massive bailout
bill enacted by Congress this month. While the $700
billion legislation assists financial institutions, it
does not include specific provisions for struggling
homeowners.

The theme of helping families, not just bankers,
underlay many of the evening's speeches.

The meeting, which was Webcast to supporters in 20
cities, kicked off a national, faith-based campaign by
PICO National Network, an affiliation of 1,000
congregations nationwide based in Oakland.

PICO, which stands for People Improving Communities
Through Organizing, calls for a systematic approach to
modifying problematic mortgages instead of treating them
on a case-by-case basis. With 1.2 million homes
nationwide already lost to foreclosure and another 2.2
million at risk over the next year, it is urgent to
"stop the bleeding," both to save homes and to help
stabilize the housing market, PICO says.

Similar events are planned in Missouri, Florida, New
York and Massachusetts, to be followed Nov. 17-19 by a
meeting in Washington with leaders from Congress, the
Treasury Department and the Federal Deposit Insurance
Corp.

"In November, hundreds of people will go to Washington,
D.C., with one common message: Work with us," said
Gloria Cooper, an organizer with a PICO affiliate in San
Diego, to the cheers of the crowd. "We want to keep our
families in their homes."

The group wants Treasury to require banks that receive
bailout money to adopt protocols that would keep more
people in their homes, such as lowering interest rates
and reducing balances to make payments affordable. A
growing chorus

The faith-based groups join a growing chorus calling for
streamlined modification of troubled mortgages. FDIC
Chair Sheila Bair has championed the idea in testimony
on Capitol Hill. Bair used such an approach for
borrowers of IndyMac Bank after the FDIC took it over
this summer. Congressional Democrats now say other banks
should follow that example.

Despite the groundswell of support, mass loan
modifications still face obstacles, including the
inability of some borrowers to make payments of any
reasonable size, and the fact that most loans have been
divided into complex financial instruments owned by many
investors.

"This is the first real gathering of the faith community
on this issue, but it also includes community
organizations and people affected at the grassroots
level," said Adam Kruggel, director of Contra Costa
Interfaith Supporting Community Organization, an
affiliation of 25 congregations, which co-sponsored the
event. After meetings throughout the county over the
past year, his group identified "foreclosure as the most
important and urgent issue we needed to work on," he
said.

"I've heard countless stories of families whose mortgage
payments ballooned out of control; they could not
contact their lender; they could not renegotiate to stay
in their home," Kruggel said.

Contra Costa County, particularly the eastern section,
where rampant overbuilding occurred, has been hit hard
by the foreclosure crisis. More than 3,660 Contra Costa
homes were repossessed by banks in the third quarter,
the most of any Bay Area county. Another 4,100
households received notices that they were in default on
their mortgages in the same time period.

Crime increasing

"It is devastating," said Contra Costa Supervisor
Federal Glover, speaking before the event. "We have a
lot of people that have done well for years that are now
finding themselves homeless because they've been
foreclosed on. We also see an increasing crime rate and
blight in communities."

Glover and other county officials pledged to pressure
banks "to be creative and find ways to help people stay
in their homes."

A representative from Bank of America/Countrywide was
greeted with cheers when he took the microphone to say
that his bank would try to work with borrowers.

Kevin Stein, associate director of the California
Reinvestment Coalition, said the growing momentum behind
the idea of streamlined loan modifications comes in
tandem with the continued growth of foreclosures and
their ripple effect.

"For more and more people, reality is starting to set in
that foreclosures just keep increasing and this is
having devastating consequences," he said, speaking
before the event.

Paul Leonard, director of the California office of the
Center for Responsible Lending, said the involvement of
the faith-based community is "natural and welcome."

Besides the FDIC's example at IndyMac, the recent
settlement between state attorneys general and Bank of
America/Countrywide provides another model for
policymakers to consider in crafting better approaches
to stemming foreclosures, Leonard said.

In that settlement, announced early this month, BofA
said it would provide up to $8.4 billion in interest
rate and principal reductions on as many as 400,000
mortgages nationwide plus more than $200 million in aid
for those who have suffered or face foreclosure.

"The fact that the federal government is investing so
much money without an apparent clear focus on the need
of preventing foreclosure draws a clearer picture of
what is needed for many who are worried about the
broader economic consequences of foreclosures as well as
the neighborhood and personal tragedies," he said.

To learn more

For more information about the campaign by People
Improving Communities Through Organizing, go to
www.piconetwork.org or  www.ccisco.org

E-mail Carolyn Said at [log in to unmask]

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