Refunding California: Alleviating the Foreclosure Cost to our Communities

Resolution Number 11-04.13

WHEREAS, the home foreclosure crisis has rocked our nation with one out of every five U.S. foreclosures located in California with more than 30% of mortgage holders owing more on the mortgage than the house is worth and, between 2009 and 2012, it is projected that almost two million California homes will suffer foreclosure; and,

WHEREAS, this crisis affects our communities as a whole not just those who lose their homes: when banks foreclose on homes, they lower property values and property tax revenues draining public resources at the local level; local government agencies then have to spend time and money covering the increased costs of public safety, inspecting and maintaining blighted properties, trash removal, foreclosure processing, evictions by sheriffs, providing transitional assistance, shelters and other safety net support to the foreclosed families; and,

WHEREAS, banks created this crisis by reckless and predatory loans, which have gone bad and, which they have been slow to modify; while communities suffer, the banks pay nothing - even though the bankers were bailed out by taxpayers and kept their bonuses (last year the top six banks paid $143 billion dollars in bonuses and compensation) "" fairness dictates that they compensate communities impacted by their greed; and

THEREFORE, BE IT RESOLVED, that the California Democratic Party supports a solution to help California recover from the foreclosure crisis by demanding that banks and mortgage servicers accept accountability and pay a substantial community reimbursement fee (which cannot be passed on to borrowers) before the foreclosure process can be concluded to help offset community costs due to foreclosures. These monies will be distributed to local communities to be used for public education, public safety, redevelopment in distressed neighborhoods, small business loans and to cities and counties to pay for mitigating the effects of foreclosures on the community, core functions and the construction of affordable housing; and

BE IT FURTHER RESOLVED, that the California Democratic Party transmit this resolution to Governor Brown and to the democratic members of the California Legislature, Congress and Senate.

Authors: Assemblymember Bob Blumenfield 40


Adopted by the California Democratic Party
At its July 2011 Executive Board Meeting
Sheraton Park Hotel, Anaheim
July 31, 2011





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