RICHMOND -- About 25 residents, including organizers from Alliance of Californians for Community Empowerment (ACCE) and Richmond Mayor Gayle McLaughlin, staged a protest Thursday in a local resident's front yard to demand lenders slash principals for mortgage holders who owe more than their homes are worth.
"The (housing) crisis continues," McLaughlin said. "The banks created this, and the banks need to help keep our residents in their homes."
Thursday's protest was aimed to underscore the release of a new report on the effect of the housing crisis locally. Titled "The Wall Street Wrecking Ball: What Foreclosures Are Costing Richmond and What We Can Do About It," the report paints a grim picture of the local housing market, finding that 914 foreclosures were completed in 2012 and that more than 4,600 homeowners in the city are "underwater," or owe more than their property is worth.
The protest was held at the home of Juan Sandoval, a 45-year-old cable television technician. Sandoval said he bought his home for $310,000 in 2001. The value today is about $160,000, he said, far less than what he owes.
"We need some principal reduction," Sandoval said, adding that he is in deep debt supporting a home with his mother, his wife and three children. "The banks got the money from the government, so they should put some back into the community to help people stay in their houses."
Nationwide, some 2 million families are delinquent on their loans and 14 million are underwater on their mortgages, according to the report.
ACCE has been particularly critical of Wells Fargo in recent weeks, accusing the lender of being intransigent on deeper principal reductions.
Wells Fargo spokeswoman Mariana Phipps on Thursday noted that the bank's foreclosure rate on home loans in California was 1.04 percent in the final quarter of 2012, less than half its national foreclosure rate.
"When our customers encounter financial hardships and face challenges with making their mortgage payments, we work hard to help them stay in their homes through modifications, principal reduction and other Wells Fargo and government-sponsored programs," Phipps said. "We help seven of 10 avoid foreclosure."
Officials at Chase Bank, another prominent local lender, could not be reached for comment.
The report says 230 homes are currently delinquent in mortgage payments and in danger of foreclosure.
The report estimates that if the 4,600 local mortgages were reduced to current market value, it would save each mortgage holder an average of more than $1,100 per month, giving a jolt to the local economy.
The protest follows a decision by the City Council on April 2 to contract with a firm that specializes in wresting concessions from mortgage holders, and the city has indicated that it may attempt to use the "public use" clause in eminent domain to compel banks to negotiate.
"The city is willing to pursue bold policies to protect our local residents," Councilwoman Jovanka Beckles said.