Kamala Harris, California’s Attorney General-elect, ought to put in a phone call to Iowa Attorney General Tom Miller, who is lead AG in a 50-state investigation of questionable foreclosure practices by the nation’s biggest banks.
Miller held a public meeting Tuesday in Des Moines during which he heard testimony from families who lost their homes when their efforts to work out mortgage modifications with their banks proved fruitless.
One of those foreclosed upon homeowners was San Jose resident Gina Gates. She told Miller that her woes began when her adjustable-rate mortgage reset, more than doubling her house note, from $2,000 to $4,200 a month. “I’d never been late before,” she said, “but I started to get behind and could never catch up.”
Especially with her bank adding late fees and other charges to her balance, the result of which was that the bank’s proposed loan modification would have cost her more than the $4,200 she already could not afford – which all but ensured that her home would be foreclosed.
Gates’ story is not unlike that of the more than 200,000 Californians who’ve been turned out of the homes they once owned. The foreclosure crisis not only has been devastating to affected homeowners, like Gates, but to all the state’s homeowners as well as to those who owed their livelihood to the state’s once-robust housing sector.
Indeed, because the banks have seized so many homes in California, because they have dumped the foreclosed properties on already depressed local housing markets, they have driven down home prices to the point that California homeowners have lost more than $1 trillion in equity, according to Zillow.
Meanwhile, home foreclosures have had a damping effect on new home construction, with production at its lowest levels in a half century. That has cost the state economy more than a half-million housing-related jobs, according to the state Economic Development Department, that are unlikely to return anytime soon.
U.S. & World
News from around the country and around the globe
The banks accept no culpability whatsoever for the foreclosure crisis and the economic collapse it has caused in states like California. But Miller plans to hold them accountable.
He not only is seeking a financial settlement with the big banks, such as that which the state AGs reached with the tobacco industry back in the 1990s, he also is promising criminal prosecution of bank executives who engaged in unlawful practices to hasten home foreclosures.
California AG-elect Harris, who has stated that, “Protecting homeowners will be one of my highest priorities,” ought to work closely with Miller. For hardly any other state has been more adversely affected by the foreclosure crisis than California.