OAKLAND -- For 3,500 Oakland homeowners, the nightmare of the foreclosure crisis continues in stalled loan modifications and a new generation of scams.
They may, however, see some help from a new pilot program that plans to pool $5 million in federal, state and private money to help homeowners keep their homes or at least soften the landing of those who still will lose theirs. Others will have added access to much-needed counseling.
Alone, navigating the loan modification process is really difficult, said Yvonne Standford, a member of the housing rights group, Alliance of Californians for Community Empowerment, or ACCE.
People turn over their keys to the banks and "walk away discouraged," Standford said Tuesday at City Hall where Oakland city officials, state lawmakers and community advocates like her gathered to announce the initiative.
Stanford said she helped pressure Bank of America to reduce the principal owed on a second mortgage her ill sister took out on a Maxwell Park district home. The modification, Standford said, prevented her sister from becoming one of the more than 10,000 foreclosed on in Oakland between 2007 and 2011.
The program is also designed to include renters who, like Kim Shanklin, found that the water to her apartment in West Oakland was shut off after the building went into foreclosure. The banks tried to evict her and her children three times, Shanklin said Tuesday.
The initiative cleared the Oakland Community and Economic Development committee Tuesday afternoon.
Next Tuesday, the City Council will consider the plan that involves distributing funds to the Community Housing Development Corp. and a list of advocacy groups; the Allen Temple Baptist Church; and the SEIU 1021. The plan also partners with Wells Fargo to buy defaulted homes and resell them to the existing owners at the current market value.
Other elements include:
Oakland Mayor Jean Quan said the program is among a "wide variety" of efforts to fight foreclosures, which continue to plague Oakland. Banks foreclosed on 215 properties and issued 834 notices of default in the past four months, according to city figures.
One out of every seven Oakland homeowners between 2006 and 2011 received a notice of default.
One of them was Manuel de Paz, a Salvadoran refugee fighting for more than a year with Bank of America to keep his 77th Avenue home, which narrowly escaped being auctioned off.
Meanwhile, the deregulation and predatory lending that led to the mortgage crisis has destroyed the credit of individuals and unraveled the social fabric of neighborhoods, de Paz said.
"We don't know what's going to happen to our future."