In Oakland a comparatively new community development bank has set up a fund to help foreclosure victims. OneCalifornia Bank of Oakland together with OneCalfornia have created a fund of $1 million to help those in Oakland facing interest hikes because of the ARM’s. House owners will now be able to avail of flexible credit from this Community Homeownership Fund to stave off foreclosures. This plan set up in cooperation with the Unity Council’s Homeownership Center, includes compulsory financial education and free banking facilities. It is a pioneer project and plans are on for expanding across the Bay Area.
Details are still being worked out. The $1 million will at the start help about 20 to 30 families. But considering the ocean of trouble in California this is just a drop. The deferred interest would be kept pending for 10 years. The interest is close to the prime mortgages. The foundation will also try to persuade the lenders to help in the matter of restructuring the loan.
There are certain prerequisites for qualifying for the loans. The house must be the home of the borrower – lived in and occupied. They must be current in their mortgage payments till the time of increase.
Simultaneously other initiatives are being taken at the state and federal level to help the foreclosure victims. As regards number of foreclosures Oakland ranks 10th.
The plan launched by Bush regarding freezing of interest for five years has been done in consultation with the lending industry. Credit counselors will also help those struggling to make end meet by refinancing programmes. Last month Governor Schwarzenegger came to an understanding with some of the big giants in the mortgage business – Countrywide Financial Corporation, GMAC, Litton and HomEq. A $1.2 million public awareness campaign has also been launched. It is hoped that the fund will reach the magic figure of $25 million from donations coming in.
OneCalifornia has received $22 million from Taylor and Steyer, the founders of the bank. The focus is on the low-income localities of Oakland. The couple from San Francisco donated 100% of the non-voting shares of OneCalifornia Bancorp Inc that is the parent body of the bank together with 49% of the voting shares. Here the focus is on financial awareness operations. Taylor is from Stanford and Steyer from Harvard and Stanford. Both have long associations with the world of finance and philanthropy.
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1 response so far ↓
1 Nick // Dec 10, 2007 at 7:58 pm
This is good to hear, and it’s really the only way that the foreclosure problem will truly be solved. The government can come in and take a top-down, authoritarian approach with the force of the government behind it, but that won’t create anything except short-term benefits.
It’ll be the banks, working with their clients, that make long-term solutions to the foreclosures. When the lenders are willing to deal with the homeowners directly, and negotiate fair settlements, as it seems to be in the case you’re citing, then there’s really hope for the community.
I think that the more local the solution, the better it will be, as well. Multinational banks will have a far more difficult time being flexible enough to meet the needs of individual families facing foreclosure. Local banks can be much more creative a lot quicker.
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