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New Report: How Wells Fargo foreclosures could cost us $3.3 billion

NEW REPORT SHOWS POTENTIAL $3.3 BILLION LOSS TO COMMUNITY WEALTH AND STATE & LOCAL COFFERS FROM IMPENDING WELLS FARGO FORECLOSURES IN CALIFORNIA

Homeowners, policy experts, and community leaders gather at the bank's headquarters to urge Wells Fargo to reverse course and offer reasonable principal reductions to California families. Click here to tell Wells Fargo CEO to change course!

Report provides first-ever look at a major bank's current foreclosure pipeline in California's cities and the impact of these foreclosures on the State's economy.

SAN FRANCISCO, CA - Dozens of homeowners, policy experts, and community leaders stood outside of Wells Fargo's headquarters on Tuesday in downtown San Francisco and called on the bank to adopt a comprehensive program of mortgage principal reduction to save the California economy from a needless $3.3 billion loss. The event coincided with the release of California in Crisis: How Wells Fargo's Foreclosure Pipeline Is Damaging Local Communities, a report that uses state of the art data to show the homes that Wells Fargo is currently moving through the foreclosure pipeline.

Click here to download the report

"Our communities and our entire State are still reeling from the housing crisis, and will be for years to come," said San Francisco Supervisor David Campos. "As this report shows, the numbers of homes still facing foreclosure is enormous. Principal reduction is clearly a critical strategy for saving homes and stabilizing the economy. Wells Fargo and the other major banks should be doing more of it."

"This report calls attention to two important issues - that California cities continue to suffer financially as foreclosures and short sales destabilize communities and displace households and that Well Fargo's foreclosure pipeline continues to be concentrated where minority and poor residents reside," says Professor Jesus Hernandez of the University of California, Davis. "As this report recommends, loan modifications with principal reduction will aid cities by stopping the loss of property tax revenues and providing households with the type of stability and financial relief needed to reboot the economic vitality of distressed communities and households."

California in Crisis shows that there are currently 11,616 homes in Wells Fargo's foreclosure pipeline. If these houses go through foreclosure, California will take an entirely unnecessary $3.3 billion hit: Each home will lose approximately 22 percent of its value, for a total loss of approximately $1.07 billion; homes in the surrounding neighborhood will lose value as well, for an additional loss of about $2.2 billion; and government tax revenues will be cut by $20 million, as a result of the depreciation.

Betty Bardo, a member of the ACCE Home Defenders League, has lived in her Glendale home since 1994. She has applied to Wells Fargo for a modification five times and each time she has been denied as a result of a seemingly different problem. "I just want a modification with principal reduction so that I can stay in my home," she said. "It is everything to me."

Bernetta Adolph, a retired San Francisco employee and member of ACCE, told the assembled crowd that she has lived in her home for almost 20 years. She took out an equity loan on her home so that she could send her son to college. But Wells Fargo has refused to modify the high interest rate. ""I'm retired, I'm disabled, I'm a cancer survivor," she said. "I've been through so much. I can't let Wells Fargo steal my home."

"Housing counselors and legal service lawyers throughout the state report Wells Fargo is one of the most difficult banks to work with in terms of keeping their clients in their homes. This report highlights the huge impact that Wells Fargo has on communities, in particular communities of color. Wells can help stabilize families through an enhanced commitment to principal reduction and transparency, or further harm households with continuing foreclosures," said Kevin Stein, associate director of the California Reinvestment Coalition.

Wells Fargo recently announced a record $19 billion in profit in 2012, but the bank continues to resist a comprehensive program of mortgage principal reduction, despite the fact that economists from across the political spectrum believe principal reduction is the key to generating a robust economic recovery for California.

California in Crisis has current foreclosure data for the largest 21 cities in California for tailored local coverage. The report was written by the Center for Popular Democracy, the Alliance of Californians for Community Empowerment, and the Home Defenders League

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