One LA Secures Principal Reductions to Prevent Foreclosures
In the face of a tsunami of foreclosures in the San Fernando Valley and South Central LA, One LA-IAF organized homeowners into negotiations with banks and crafted a unique solution involving shared sacrifice on the part of homeowners, the banks and the public.
Two thousand One LA leaders rallied to compel the City of LA to not just adopt the strategy, but invest at least $1 million into the innovative pilot project. One LA and California IAF leaders then worked with the California Housing Finance Agency to expand this project into an $11 Million program that made “silent second” loans available to incentivize lenders to make loan modifications that included principal debt forgiveness.
Local leaders secured commitments from commercial banks to reduce principal on bank-held loans, saving 500 families from foreclosure.
[Photo Credit: Gregg Canes, CNN]
Video: Fighting For Our Homes, Brave New Films Foundation
Beltway Bubble, KCRW [skip to 26:41 to hear the plan]
CalHFA Principal Writedown Plan is ‘Bank Bailout’, Sacramento Bee
Churches Helping People Keep Their Homes, Santa Cruz Sentinel