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San Diego Reinvestment Task Force

RTF Sub-Committee. Bob AdelizziLynn HastingsGeorge Harris IIIWendell FrenchJim SchmidtVenus MolinaTechnical Advisors - Steve Bouton andSchahrzad Berkland. Background. previous market downturns caused by external factors (employment, government regulation)current problems linked to industry actions.

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San Diego Reinvestment Task Force

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    1. San Diego Reinvestment Task Force Analysis and Response To Property Foreclosures September, 2007

    2. RTF Sub-Committee Bob Adelizzi Lynn Hastings George Harris III Wendell French Jim Schmidt Venus Molina Technical Advisors - Steve Bouton and Schahrzad Berkland

    3. Background previous market downturns caused by external factors (employment, government regulation) current problems linked to industry actions

    4. Structure of Sub Prime Capital

    5. San Diego County

    6. Moderate Income

    7. Low Income

    8. San Diego County High- Minority Census Tracts*

    9. Community impacts foreclosures reduced access to affordable credit vacant homes reduced property values reduced investments reduced tax base for city services and schools

    10. Possible Causes a spectrum of causes unregulated funds from new state licensed mortgage lenders high commissions for mortgage brokers   lack of state regulation of interest rates and loan terms  for mortgage brokers Fannie Mae and Freddie Mac policies related to securities purchase of sub prime and predatory home loan products.

    11. ….causes targeting of low income and ethnic communities by mortgage lenders lack of regulation on securities sales of sub-prime and predatory loan products

    12. Current Conditions ongoing increases in foreclosures of single-family homes ongoing decrease in property values. decreased access to home mortgage credit. continuing failure of state licensed mortgage lenders. disappearance of 42,000 mortgage brokers nationally  

    13. …conditions ongoing fluctuation in securities markets impacting the cost of credit  slowly evolving federal legislative or regulatory response lack of funding for local foreclosure counseling services

    14. Recommendations Local Actions The RTF should examine the feasibility of creating a regional land bank to purchase foreclosed, bank owned properties on the market over nine months for the purpose of establishing first time affordable homebuyers initiative.  Request that City and County CDBG Departments seek to increase grant making to non-profits involved in financial education and home loan foreclosure (HUD certified). The RTF should work in collaboration with United Way, San Diego Foundation and major lender foundations to increase funding and capacity of non-profits providing financial education to build skills in foreclosure prevention.

    15. Recommendations continued The RTF should work in partnership with local non-profits and state coalitions to negotiate with major lenders for reasonable workout programs and loan products for customers experiencing foreclosure. Request that the city, county and state legal authorities develop an enforcement strategy for interdicting, reducing and removing predatory mortgage lending practices in the region including the review of potential securities violations.   The RTF should request that the City and County establish an ordinance regarding inspection and monitoring of foreclosed properties for code violations and on going maintenance. The RTF should request that County Tax Assessor monitor and notice delinquencies in tax payments with bank owned/ foreclosed properties.

    16. Recommendations continued Legislative/ Administrative Request that City and County lobbyists pursue federal and state legislation which; provides increased funding of non-profits for foreclosure counseling establishes rules and regulations for unregulated mortgage companies and brokers applies the Community Reinvestment Act to credit unions, mortgage companies expands lending capacity of VA and FHA for foreclosure alternatives increases oversight of securities markets, mortgage brokers and state licensed mortgage lenders  

    17. Recommendations continued Lobby for State Department of Corporations and Banking to establish regulations for mortgage brokers and mortgage lenders that define standards for full disclosure, restrict steering and misrepresentation. The RTF should work with appropriate congressional offices to request that FNMA and Veterans Administration modify loan limits to adjust for cost of housing in the San Diego market.

    18. Recommendations continued The RTF should work with appropriate congressional offices to encourage FNMA and Veterans Administration to develop specific foreclosure alternative loan products, to engage in aggressive marketing efforts to include financial education assistance in partnership with local non-profits. Request that Federal Reserve Bank or appropriate legislation establish guidelines for hedge funds and securities that are related to sub prime single home mortgages.

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