The Wall Street WRECKING BALL

Transcription

1 SEPTEMBER 2011 The Wall Street WRECKING BALL What Foreclosures Are Costing Los Angeles Neighborhoods

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3 Alliance of Californians for Community Empowerment (ACCE) is a multi-racial, democratic, non-profit community organization building power in low to moderate income neighborhoods to stand and fight for social, economic and racial justice. ACCE has chapters in eleven counties across the State of California. The California Reinvestment Coalition (CRC) advocates for fair and equal access to banking and other financial services for California s low-income communities Alliance of Californians for Community Empowerment (ACCE) is a multi-racial, and communities of color. CRC is a membership organization of over 300 democratic, non-profit community organization building power in low to nonprofits and public agencies including housing counselors, consumer moderate income neighborhoods to stand and fight for social, economic and advocates, community organizations, legal service providers, and economic racial justice. ACCE has chapters in eleven counties across the State of California. development practitioners. Founded in 1986, CRC advocates with policymakers and California s largest banks for increased financial access- particularly in The California Reinvestment Coalition (CRC) advocates for fair and equal access lending, financial products and services, and investments- to California's lowincome communities and communities of color. to banking and other financial services for California s low-income communities and communities of color. CRC is a membership organization of over 300 nonprofits and public agencies including housing counselors, consumer advocates, community organizations, legal service providers, and economic development practitioners. Founded in 1986, CRC advocates with policymakers and California s largest banks for increased financial access- particularly in lending, financial products and services, and investments- to California's lowincome communities and communities of color.

4 As Wall Street Banks continue As Wall Street neighborhoods, Banks continue the to foreclose costs to tao neighborhoods, the costs to taxpayers add u As Wall Street Banks Wall Street continue banks shattered to our economy and left ou foreclose As Wall Street on Banks our continue neighborhoods, to foreclose on our Wall Street banks shattered our economy and left our communities to pick u the neighborhoods, costs to taxpayers the costs to taxpayers add upadd up While it was Wall Street s toxic lending practices and reckless California homeowners and taxpayers that are paying the pric While it was Wall Street s toxic economic lending crisis practices began and and recklessness without immediate that created action, the we housin are California homeowners and neighborhoods taxpayers that are that paying is undermining the price. the The economic housing market recovery is we w Wall Street banks shattered our economy and left our communities to pick up the pieces. economic crisis began and without immediate action, we are facing a multi-billion dollar While it was neighborhoods Wall Street s toxic that lending is undermining practices The and Picture recklessness the economic in that California: created recovery the housing we desperately crisis, it is need. California homeowners and taxpayers that are paying the There price. have The housing been 1.2 market million is where foreclosures the in the state economic crisis began and without immediate action, we are facing a multi-billion dollar hit to our neighborhoods The that Picture is undermining in California: the economic recovery exceed we desperately 2 million need. by the end of i There have been 1.2 million California foreclosures is the in hardest the state hit since of all 2008, fifty with states, the accounti numbe The Picture in California: exceed 2 million by the end US. of ii i There have been California 1.2 million is the foreclosures hardest in hit the The of state all 2 since fifty million 2008, states, foreclosures with accounting the number expected for one through to in every 2012 five fore are exceed 2 million by the end of US. ii i taxes, and local governments $650 billion statewide. ii California is the hardest hit of all fifty states, accounting for one in every five foreclosures in the US. ii The 2 million foreclosures expected Almost a through third of 2012 California are estimated homeowners to cost with homeow a mortg The 2 million taxes, foreclosures and local expected governments through 2012 their $650 are homes estimated billion are to statewide. worth. cost homeowners, iv iii property taxes, and local Almost governments a third $650 of California billion statewide. homeowners iii with a mortgage owe more on their mo Almost a third of California homeowners with a mortgage owe more on their mortgages than their homes are worth. their homes are worth. Los iv Angeles by the Numbers: iv Foreclosures harm all homeowners: Overall, Los Ang Los Angeles Los by Angeles the Numbers: by the Numbers: $78.8 billion in home values as a direct result of the 2 Foreclosures Foreclosures harm all homeowners: harm all Overall, homeowners: Los Foreclosures Angeles homeowners Overall, erode Los are the Angeles estimated property homeowners to tax lose base and are impac estim $78.8 billion in home values as a direct result of the 200,000 foreclosures for $78.8 billion in home values losses as a direct are estimated result of the to be 200,000 $481 million foreclosures in the wake for 200 o Foreclosures erode the property tax base and impact services for all: Property tax revenue losses are estimated Foreclosures to be $481 erode million the in the property wake Foreclosures of tax the foreclosure base cost and local crisis. impact governments: services for The all: typical Property fore t Foreclosures losses cost local are governments: estimated The to be typical $481 than foreclosure million $19,229 costs in for the local increased wake governments of the costs foreclosure more of safety inspections crisis. than $19,229 Foreclosures for increased costs cost of local safety governments: inspections, and maintenance. police The and typical fire calls, In Los foreclosure and Angeles, trash removal, costs theses local costs governm are es and maintenance. In Los Angeles, theses costs are estimated to be $1.2 billion. than $19,229 for increased costs Foreclosures of safety undermine inspections, an police economic and fire recovery calls, and tr c Foreclosures undermine an economic recovery and cost jobs: Los Angeles has 79,029 homeowners and underwater maintenance. by $7.3 billion. In Los If banks Angeles, homeowners wrote theses underwater down those costs mortgages, are estimated by $7.3 billion. it could pump to be $1.2 If banks billion. wro $780 million Foreclosures into local economy undermine and spur 11,353 an $780 economic jobs. million recovery into local and economy cost jobs: and Los spur Angeles 11,353 has jobs 7 homeowners underwater by $7.3 billion. If banks wrote down those mortgages, i Top Banks Foreclosing $780 on million Californians: into local Top economy Banks Foreclosing and spur 11,353 on Californians: jobs. Bank of America Top Banks Foreclosing Bank of in America California JP Morgan Chase Wells Top Fargo Banks Bank Foreclosing on Californians: JP Morgan Chase Citigroup Bank of America JP Morgan Chase Wells Fargo Bank Citigroup Wells Fargo Bank Citigroup 2 The Wall Street WRECKING BALL

5 Foreclosures have a clear impact on the families losing their homes, but the costs hit all of us. Foreclosures harm the value of all homes within a neighborhood. When a home falls into foreclosure, it affects the property value of the foreclosed home as well as the values of other homes in the neighborhood. It is estimated that homes in foreclosure experience a 22% decline in value. v That means the impact of the 200,000 foreclosures estimated for the period 2008 through 2012 will be more than $26 billion in lost home value in communities across Los Angeles. vi But the impact to foreclosed properties is just the tip of the iceberg. It is conservatively estimated that each foreclosed property will cause the value of neighboring homes within an eighth of a mile to drop 0.9%. vii In Los Angeles, impacted homeowners could experience property devaluation of $53 billion. viii Overall, Los Angeles homeowners are estimated to lose $78.8 billion in home values as a direct result of the foreclosure crisis. With lower home values, families have less home equity to use to fund retirement, pay tuition, grow their small businesses, or pay medical bills. For the average pre-retiree, at least two-thirds of their total assets are tied up in their home. ix Foreclosures erode local tax bases and revenues, impacting services for everyone. As housing values decline, state and local governments also feel the burden. As property values drop an estimated $78.8 billion, Los Angeles communities could lose as much as $481 million in property tax revenue. x The reduction in property values has decimated the tax bases that support state and local budgets. Foreclosures require increased police and other services, further draining public budgets. Foreclosure-related costs for Los Angeles local governments are estimated to be $1.2 billion. xi Local government agencies have to spend money and staff time on blighted foreclosed properties, providing maintenance, inspections, trash removal, increased public safety calls, and other code enforcement services. For example, violent crime increases 2.33% for every 1% increase in foreclosures. xii Additional foreclosure costs include sheriff evictions, providing transitional assistance and shelters, and other safety net support to families. Responding to these needs is a gargantuan task that involves multiple agencies and multiple levels of local government. The costs to taxpayers add up very quickly to $19,229 per foreclosure and potentially much higher. xiii That means at a time when local governments are contemplating slashing services, they are also being asked to pick up the tab for cleaning up the banks foreclosure mess. A National League of Cities survey found that foreclosures and the declining housing market are among the leading causes of fiscal budget crises. As a result, cities are hard-pressed to pay for services like libraries, parks, police and fire. xiv A breakdown by zip code can be found in attached chart. A July 2011 Pew Research analysis found the median wealth among Hispanic households fell by 66% and among African- American households fell by 53% after the bursting of the housing market bubble in 2006 and the recession that followed. SEPTEMBER

6 Foreclosures undermine an economic recovery and cost jobs. Another alarming impact of the housing crisis is the overhang of underwater mortgage debt, which is now one of the primary drags on economic recovery. Negative equity, often referred to as underwater or upside down, means that borrowers owe more on their mortgages than their homes are worth. California s negative equity share is 30% (compared to 23% nationally)-- that means almost a third of homeowners are underwater on their mortgages. California homeowners are underwater by $200 billion as a result of the Wall Street-created housing crisis. That means as homeowners overpay on their mortgages, Wall Street devours $20 billion annually. This is money that would otherwise go into our economy in the form of consumer spending if banks wrote down mortgages to market value. Mortgage write downs or principal reduction means banks would write down mortgages to market value and refinance homeowners into 30-year fixed loans at current market interest rates. California has over 2 million homes underwater (30% of all mortgages) by $200 billion. Fixing the underwater crisis by writing down mortgages would save California homeowners $810 every month and pump $20 billion annually into local economy. xv With the extra $810 per month, homeowners could start spending again, making purchases they have been putting off. The increase in consumer demand would in turn help spur 300,000 jobs in California. Los Angeles has 79,029 homeowners underwater (27%) by $7.3 billion. If banks wrote down those mortgages, it could pump $768 million into local economy and spur 11,353 jobs. xvi Fixing Underwater Mortgages Would Spur Economic Recovery 4 The Wall Street WRECKING BALL

7 It s time for solutions: Wall Street Should Pay Their Fair Share: The banks collapsed the economy and created the housing crisis It s time with their for recklessness solutions: and predatory lending practices. Currently, taxpayers are being forced to absorb Wall Street the losses Should to Pay home Their values Fair and Share: the The costs banks to local collapsed governments. the economy California and should created institute the housing a crisis Foreclosure with their Fee, recklessness making the and banks predatory pay $10,000 lending to $20,000 practices. per Currently, foreclosure taxpayers to partially are being reimburse forced local to absorb and state the governments losses to home for values the costs and of the this costs crisis. to This local fee governments. would raise California roughly $2 should billion institute to $4 billion a Foreclosure over the next Fee, year. making the banks pay $10,000 to $20,000 per foreclosure to partially reimburse local and state governments for the costs of this crisis. This fee would raise roughly $2 billion to $4 billion over California the next Needs year. a Strong AG Settlement. The current multi-state Attorneys General investigation into robo-signing and other servicing abuses needs to provide meaningful relief for California families and neighborhoods. California Needs Any a Strong agreement AG Settlement. must include The 1) current a large multi-state settlement Attorneys award that General is commensurate investigation with into the harm robo-signing caused and by bank other practices; servicing 2) abuses limited needs releases to provide of liabilities meaningful so banks relief are for not California let off the families hook for and neighborhoods. uninvestigated claims; Any agreement 3) mandated must principal include reductions 1) a large settlement that are fairly award distributed that commensurate to communities with the harm hardest caused hit by by predatory bank practices; lending 2) and limited foreclosure; releases and of liabilities 4) restitution so banks to homeowners are not let off who the lost hook their for properties uninvestigated due to claims; bank's 3) irresponsible mandated principal and illegal reductions foreclosure that practices. are fairly distributed to communities hardest hit by predatory lending and foreclosure; and 4) restitution to homeowners who lost their Wall properties Street due Banks to bank's Must Stop irresponsible Preventable and Foreclosures: illegal foreclosure Reducing practices. foreclosures is good for families, communities and the economy. Banks should be subject to court-based mandatory mediation programs Wall to give Street homeowners Banks Must a fair Stop shot Preventable at getting a Foreclosures: loan modification. Reducing Banks foreclosures must also be is good forced for to families, fully end the dual communities track process, and the a controversial economy. Banks practice should whereby be subject homeowners to court-based negotiating mandatory a loan mediation modification programs in good to give faith homeowners find that the a fair bank shot has at nonetheless getting a loan proceeded modification. with Banks foreclosure must and also taken be forced their to homes. fully end the dual track process, a controversial practice whereby homeowners negotiating a loan modification in good Wall Street faith find Must that Clean the bank Up and has Pay nonetheless for Foreclosure-Related proceeded with Blight: foreclosure Vacant and foreclosures taken their unattended homes. by banks have become a magnet for blight and illicit activity that further destabilizes neighborhoods already Wall Street decimated Must Clean by foreclosures. Up and Pay Banks for Foreclosure-Related must maintain and Blight: pay for Vacant the cleanup foreclosures of blighted, unattended vacant by homes banks have in neighborhoods. become a magnet for blight and illicit activity that further destabilizes neighborhoods already decimated by foreclosures. Banks must maintain and pay for the cleanup of blighted, vacant homes Who is in responsible neighborhoods. for this mess? Who Wall Street s is reckless Responsible and predatory lending for practices this have Mess? devastated California. Bankers pushed homeowners Who is responsible into high-cost for loans this they mess? couldn't afford and then promptly cashed out by selling the loans to Wall investment Street s reckless banks that and turned predatory them lending into mortgage-backed practices have devastated securities California. (MBS). This Bankers widespread pushed practice, which homeowners started into among high-cost subprime loans lenders they couldn't but was afford quickly and adopted then promptly by the big cashed banks, out created by selling and inflated the loans the to investment housing bubble. banks Bankers that turned and them brokers into raked mortgage-backed in mega-bonus securities checks making (MBS). homeowners This widespread vulnerable. practice, When which started Wall Street s among bets subprime went sour, lenders the but bankers was quickly were bailed adopted out by taxpayers the big banks, and created got to keep and their inflated bonuses the housing but bubble. Californians Bankers lost and billions brokers in savings raked in their mega-bonus homes. checks making homeowners vulnerable. When Wall Street s bets went sour, the bankers were bailed out by taxpayers and got to keep their Wall bonuses Street s but Californians recklessness lost is well-documented billions in savings and in their continues homes. to have devastating consequences as they use flawed-and, in some cases, fraudulent--procedures to flood the housing market with foreclosures that Wall are Street s throwing recklessness hundreds is of well-documented thousands of California and continues families to out have of devastating their homes. consequences The total disregard as they for use mortgage flawed-and, laws in and some standards cases, fraudulent--procedures is the latest example of to a flood predatory the housing industry market that continues with foreclosures to devastate that are throwing families hundreds already hit of hard thousands by the of economic California crisis. families out of their homes. The total disregard for mortgage laws and standards is the latest example of a predatory industry that continues to Currently, devastate families the five largest already mortgage hit hard by companies the economic in the crisis. U.S. are under investigation by all 50 state Attorneys Generals for foreclosure fraud. They may be on the hook for more than $20 billion in damages. Currently, the However, five largest this amount mortgage is not companies nearly enough in the U.S. to compensate are under investigation communities by for all the 50 harm state that has Attorneys been done, Generals as this for report foreclosure documents. fraud. They may be on the hook for more than $20 billion in damages. However, this amount is not nearly enough to compensate communities for the harm that has been done, as this report documents. SEPTEMBER

8 Who is Responsible for this Mess? Who Is Responsible for this Mess? Wall Street s reckless and predatory lending practices have devastated California. Lenders pushed homeowners into high-cost loans and investment banks turned mortgages into a casino. When Wall Street s bets went sour, the bankers were bailed out by taxpayers and got to keep their bonuses but Californians lost billions in savings in their homes. BANK OF AMERICA CEO Brian Moynihan Federal taxpayer bailout funds received: xvii $230.1 billion xviii Profits since bailout ( ): $4.0 billion 2010 CEO Brian Moynihan bonus: $9.05 million xix 2010 CEO Brian Moynihan total pay: $10 million xx 2010 bonuses and compensation: $35.1 billion JP MORGAN CHASE CEO Jamie Dimon Federal taxpayer bailout funds received: xxi $100.7 billion xxii Profits since bailout ( ): $29.1 billion 2009 CEO Jamie Dimon pay: xxiii $17.5 million xxiv 2010 bonuses and compensation: $28.4 billion WELLS FARGO CEO John Stumpf Federal taxpayer bailout funds received: xxv $43.7 billion xxvi Profits since bailout ( ): $24.6 billion 2010 CEO John Stumpf bonus: $14.3 million xxvii 2010 CEO John Stumpf total pay: $17.1 million xxviii 2010 bonuses and compensation: $27.2 billion CITIGROUP CEO Vikram Pandit Federal taxpayer bailout funds received: xxix $414.9 billion xxx Profits since bailout ( ): $9.0 billion CEO Vikram Pandit pay: 10.8 million xxxi 2010 bonuses and compensation: $24.4 billion GOLDMAN SACHS CEO Lloyd Blankfein Federal taxpayer bailout funds received: xxxii $53.4 billion xxxiii Profits since bailout ( ): $21.7 billion 2010 CEO Lloyd Blankfein bonus: $12.6 million xxxiv 2010 CEO Lloyd Blankfein total pay: $13.2 million xxxv 2010 bonuses and compensation: $15.4 billion MORGAN STANLEY CEO James Gorman Federal taxpayer bailout funds received: xxxvi $36.3 billion xxxvii Profits since bailout ( ): $6.0 billion 2009 CEO James Gorman pay: $15.0 million xxxviii 2010 bonuses and compensation: $16.0 billion 6 The Wall Street WRECKING BALL

9 The Cost of the Foreclosure Crisis in Los Angeles by Zip Code ( ) Zip Code Foreclosures Foreclosed Home Value Loss Impacted Homes Value Loss Total Home Value Loss Property Tax Loss Local Gov't Cost ,125 $404,954,409 $828,315,837 $1,233,270,246 $7,522,949 $20,044, ,006 $519,133,771 $1,061,864,532 $1,580,998,303 $9,644,090 $26,905, ,929 $768,358,417 $1,571,642,217 $2,340,000,634 $14,274,004 $37,938, ,143 $148,109,166 $302,950,566 $451,059,732 $2,751,464 $6,987, ,045 $135,485,931 $277,130,313 $412,616,244 $2,516,959 $5,291, ,612 $208,866,583 $427,227,102 $636,093,685 $3,880,171 $10,368, $121,696,278 $248,924,205 $370,620,483 $2,260,785 $5,341, ,419 $183,905,238 $376,169,805 $560,075,043 $3,416,458 $6,964, $12,493,633 $25,555,158 $38,048,791 $232,098 $423, ,701 $738,886,922 $1,511,359,614 $2,250,246,536 $13,726,504 $32,077, $108,062,148 $221,036,211 $329,098,359 $2,007,500 $5,434, $60,783,338 $124,329,555 $185,112,893 $1,129,189 $3,222, $39,191,645 $80,164,728 $119,356,373 $728,074 $2,042, $93,339,360 $190,921,419 $284,260,779 $1,733,991 $4,707, ,737 $354,772,515 $725,671,053 $1,080,443,568 $6,590,706 $15,813, $60,809,258 $124,382,574 $185,191,832 $1,129,670 $3,238, ,634 $341,397,588 $698,313,249 $1,039,710,837 $6,342,236 $15,702, ,573 $333,414,105 $681,983,397 $1,015,397,502 $6,193,925 $13,514, $121,177,870 $247,863,825 $369,041,695 $2,251,154 $6,195, $31,830,251 $65,107,332 $96,937,583 $591,319 $819, ,266 $293,704,052 $600,758,289 $894,462,341 $5,456,220 $11,871, ,469 $190,437,179 $389,530,593 $579,967,772 $3,537,803 $8,126, $95,698,117 $195,746,148 $291,444,265 $1,777,810 $3,192, $104,174,088 $213,083,361 $317,257,449 $1,935,270 $4,049, ,833 $237,612,307 $486,025,173 $723,637,480 $4,414,189 $10,418, $93,054,236 $190,338,210 $283,392,446 $1,728,694 $4,061, $68,896,423 $140,924,502 $209,820,925 $1,279,908 $2,326, $80,042,195 $163,722,672 $243,764,867 $1,486,966 $3,661, ,332 $172,578,023 $353,000,502 $525,578,525 $3,206,029 $7,764, ,219 $287,612,758 $588,298,824 $875,911,582 $5,343,061 $13,979, ,321 $171,256,083 $350,296,533 $521,552,616 $3,181,471 $8,245, $83,463,688 $170,721,180 $254,184,868 $1,550,528 $3,465, $69,155,627 $141,454,692 $210,610,319 $1,284,723 $1,719, $60,990,701 $124,753,707 $185,744,408 $1,133,041 $2,103, ,555 $460,709,190 $942,359,706 $1,403,068,896 $8,558,720 $20,386, $50,467,019 $103,227,993 $153,695,012 $937,540 $1,865, $127,917,174 $261,648,765 $389,565,939 $2,376,352 $5,487, $49,585,725 $101,425,347 $151,011,072 $921,168 $1,776, $116,564,039 $238,426,443 $354,990,482 $2,165,442 $4,495, ,733 $354,228,186 $724,557,654 $1,078,785,840 $6,580,594 $16,040, ,422 $443,523,964 $907,208,109 $1,350,732,073 $8,239,466 $20,048, ,591 $854,180,862 $1,747,188,126 $2,601,368,988 $15,868,351 $40,261,680 SEPTEMBER

10 The Cost of the Foreclosure Crisis in Los Angeles by Zip Code ( ) Zip Code Foreclosures Foreclosed Home Value Loss Impacted Homes Value Loss Total Home Value Loss Property Tax Loss Local Gov't Cost , $404,954,409 $127,865,333 $828,315,837 $261,542,727 $1,233,270,246 $389,408,060 $7,522,949 $2,375,389 $20,044,310 $6,076, ,006 1,338 $519,133,771 $173,433,396 $1,061,864,532 $354,750,129 $1,580,998,303 $528,183,525 $9,644,090 $3,221,920 $26,905,217 $7,433, ,560 5,929 $768,358,417 $590,933,279 $1,208,727,162 $1,571,642,217 $1,799,660,441 $2,340,000,634 $10,977,929 $14,274,004 $28,620,444 $37,938, , $148,109,166 $60,731,497 $302,950,566 $124,223,517 $451,059,732 $184,955,014 $2,751,464 $1,128,226 $6,987,819 $2,234, , $135,485,931 $94,039,211 $277,130,313 $192,352,932 $412,616,244 $286,392,143 $2,516,959 $1,746,992 $5,291,821 $2,892, , $208,866,583 $63,738,264 $427,227,102 $130,373,721 $636,093,685 $194,111,985 $3,880,171 $1,184,083 $10,368,277 $2,345, $121,696,278 $74,495,230 $152,376,606 $248,924,205 $226,871,836 $370,620,483 $1,383,918 $2,260,785 $5,341,816 $3,872, , $183,905,238 $21,539,852 $376,169,805 $44,058,789 $560,075,043 $65,598,641 $3,416,458 $400,152 $6,964,744 $946, , $478,101,778 $12,493,633 $977,935,455 $25,555,158 $1,456,037,233 $38,048,791 $8,881,827 $232,098 $25,997,608 $423, ,931 5,701 $738,886,922 $250,313,303 $1,511,359,614 $512,004,483 $2,250,246,536 $762,317,786 $13,726,504 $4,650,138 $32,077,818 $12,260, , $108,062,148 $327,063,607 $668,993,742 $221,036,211 $996,057,349 $329,098,359 $6,075,950 $2,007,500 $15,225,522 $5,434, , $328,074,503 $60,783,338 $124,329,555 $671,061,483 $185,112,893 $999,135,986 $1,129,189 $6,094,730 $15,798,546 $3,222, $39,191,645 $55,651,099 $113,831,793 $80,164,728 $119,356,373 $169,482,892 $1,033,846 $728,074 $2,042,120 $2,326, , $251,427,880 $93,339,360 $514,284,300 $190,921,419 $765,712,180 $284,260,779 $4,670,844 $1,733,991 $12,041,200 $4,707, , $354,772,515 $102,567,023 $725,671,053 $209,796,183 $1,080,443,568 $312,363,206 $6,590,706 $1,905,416 $15,813,930 $4,418, $60,809,258 $39,399,008 $124,382,574 $80,588,880 $185,191,832 $119,987,888 $1,129,670 $731,926 $3,238,164 $1,699, ,082 2,634 $341,397,588 $140,255,284 $698,313,249 $286,885,809 $1,039,710,837 $427,141,093 $6,342,236 $2,605,561 $15,702,401 $6,303, ,573 1,168 $333,414,105 $151,426,977 $681,983,397 $309,736,998 $1,015,397,502 $461,163,975 $6,193,925 $2,813,100 $13,514,141 $6,330, $121,177,870 $4,069,503 $247,863,825 $8,323,983 $369,041,695 $12,393,486 $2,251,154 $75,600 $6,195,584 $276, $31,830,251 $41,006,073 $65,107,332 $83,876,058 $124,882,131 $96,937,583 $591,319 $761,781 $1,838,292 $819, ,2661 $293,704,052 $129,602 $600,758,289 $265,095 $894,462,341 $394,697 $5,456,220 $2,408 $11,871,985 $19, , $190,437,179 $51,659,357 $389,530,593 $105,666,867 $579,967,772 $157,326,224 $3,537,803 $959,690 $8,126,175 $2,411, $95,698,117 $336,965 $195,746,148 $689,247 $291,444,265 $1,026,212 $1,777,810 $6,260 $3,192,014 $ $104,174,088 $75,298,762 $213,083,361 $154,020,195 $317,257,449 $229,318,957 $1,935,270 $1,398,846 $4,049,627 $2,861, , $237,612,307 $27,501,544 $486,025,173 $56,253,159 $723,637,480 $83,754,703 $4,414,189 $510,904 $10,418,272 $1,088, $93,054,236 $24,987,266 $190,338,210 $51,110,316 $283,392,446 $76,097,582 $1,728,694 $464,195 $4,061,165 $480, , $136,885,632 $68,896,423 $140,924,502 $279,993,339 $209,820,925 $416,878,971 $1,279,908 $2,542,962 $2,326,709 $5,591, $80,042,195 $31,985,774 $163,722,672 $65,425,446 $243,764,867 $97,411,220 $1,486,966 $594,208 $1,211,427 $3,661, , $172,578,023 $29,186,370 $353,000,502 $59,699,394 $525,578,525 $88,885,764 $3,206,029 $542,203 $7,764,670 $1,053, ,219 2,059 $287,612,758 $266,850,518 $588,298,824 $545,830,605 $875,911,582 $812,681,123 $5,343,061 $4,957,355 $13,979,483 $12,710, , $171,256,083 $47,745,377 $350,296,533 $97,660,998 $521,552,616 $145,406,375 $3,181,471 $886,979 $8,245,395 $2,045, $83,463,688 $51,866,720 $106,091,019 $170,721,180 $157,957,739 $254,184,868 $1,550,528 $963,542 $1,926,746 $3,465, $69,155,627 $31,337,764 $141,454,692 $64,099,971 $210,610,319 $95,437,735 $1,284,723 $582,170 $1,719,073 $999, $60,990,701 $77,605,678 $124,753,707 $158,738,886 $185,744,408 $236,344,564 $1,133,041 $1,441,702 $2,103,653 $2,380, , $460,709,190 $107,336,376 $219,551,679 $942,359,706 $1,403,068,896 $326,888,055 $1,994,017 $8,558,720 $20,386,586 $4,472, $50,467,019 $70,684,931 $144,582,813 $103,227,993 $215,267,744 $153,695,012 $1,313,133 $937,540 $1,865,213 $3,272, , $127,917,174 $253,734,796 $261,648,765 $519,002,991 $389,565,939 $772,737,787 $2,376,352 $4,713,700 $12,648,836 $5,487, $49,585,725 $22,213,783 $101,425,347 $45,437,283 $151,011,072 $67,651,066 $921,168 $412,672 $1,776,760 $980, , $116,564,039 $143,210,210 $292,929,975 $238,426,443 $436,140,185 $354,990,482 $2,660,455 $2,165,442 $4,495,740 $7,053, ,733 1,558 $354,228,186 $201,919,916 $724,557,654 $413,018,010 $1,078,785,840 $614,937,926 $6,580,594 $3,751,121 $16,040,832 $9,641, ,422 1,119 $443,523,964 $145,050,558 $907,208,109 $296,694,324 $1,350,732,073 $441,744,882 $8,239,466 $2,694,644 $20,048,155 $6,134, , $854,180,862 $70,114,682 $1,747,188,126 $143,416,395 $2,601,368,988 $213,531,077 $15,868,351 $1,302,540 $40,261,680 $2,615, ,948 $252,412,855 $516,299,022 $768,711,877 $4,689,142 $11,395, ,002 $129,809,363 $265,519,152 $395,328,515 $2,411,504 $5,930, ,962 $254,279,124 $520,116,390 $774,395,514 $4,723,813 $12,160, ,044 $264,958,329 $541,960,218 $806,918,547 $4,922,203 $13,148, ,328 $172,111,456 $352,046,160 $524,157,616 $3,197,361 $7,918,502 8 The Wall Street WRECKING BALL

11 The Cost of the Foreclosure Crisis in Los Angeles by Zip Code ( ) Zip Code Foreclosures Foreclosed Home Value Loss Impacted Homes Value Loss Total Home Value Loss Property Tax Loss Local Gov't Cost ,125 1,726 $404,954,409 $223,641,211 $828,315,837 $457,447,932 $1,233,270,246 $681,089,143 $7,522,949 $4,154,644 $20,044,310 $9,422, ,006 1,214 $519,133,771 $157,336,828 $1,061,864,532 $321,825,330 $1,580,998,303 $479,162,158 $9,644,090 $2,922,889 $26,905,217 $5,518, ,066 5,929 $768,358,417 $138,103,891 $1,571,642,217 $282,485,232 $2,340,000,634 $420,589,123 $14,274,004 $2,565,594 $37,938,817 $6,907, ,143 2,444 $148,109,166 $316,747,288 $302,950,566 $647,892,180 $451,059,732 $964,639,468 $2,751,464 $5,884,301 $14,840,942 $6,987, ,045 3,278 $135,485,931 $424,783,515 $277,130,313 $868,875,372 $1,293,658,887 $412,616,244 $2,516,959 $7,891,319 $20,763,474 $5,291, ,612 1,332 $208,866,583 $172,655,784 $427,227,102 $353,159,559 $636,093,685 $525,815,343 $3,880,171 $3,207,474 $10,368,277 $6,918, , $121,696,278 $290,567,684 $594,342,990 $248,924,205 $884,910,674 $370,620,483 $5,397,955 $2,260,785 $13,875,646 $5,341, ,419 1,813 $183,905,238 $234,942,506 $376,169,805 $480,564,216 $560,075,043 $715,506,722 $3,416,458 $4,364,591 $11,083,596 $6,964, , $171,852,252 $12,493,633 $351,515,970 $25,555,158 $523,368,222 $38,048,791 $3,192,546 $232,098 $7,407,011 $423, ,499 5,701 $194,299,318 $738,886,922 $1,511,359,614 $397,430,424 $2,250,246,536 $591,729,742 $13,726,504 $3,609,551 $32,077,818 $8,360, , $217,187,032 $108,062,148 $444,246,201 $221,036,211 $661,433,233 $329,098,359 $4,034,743 $2,007,500 $8,829,957 $5,434, , $783,962,498 $60,783,338 $1,603,559,655 $124,329,555 $2,387,522,153 $185,112,893 $14,563,885 $1,129,189 $39,219,468 $3,222, , $624,577,958 $39,191,645 $1,277,545,824 $80,164,728 $1,902,123,782 $119,356,373 $11,602,955 $728,074 $29,558,819 $2,042, , $251,324,198 $93,339,360 $514,072,224 $190,921,419 $765,396,422 $284,260,779 $4,668,918 $1,733,991 $12,648,836 $4,707, ,737 7,009 $354,772,515 $908,354,498 $1,857,997,836 $725,671,053 $1,080,443,568 $2,766,352,334 $16,874,749 $6,590,706 $15,813,930 $46,388, , $490,958,296 $60,809,258 $1,004,232,879 $124,382,574 $1,495,191,175 $185,191,832 $1,129,670 $9,120,666 $24,974,625 $3,238, ,005 2,634 $341,397,588 $389,454,010 $796,610,475 $698,313,249 $1,186,064,485 $1,039,710,837 $7,234,993 $6,342,236 $16,894,599 $15,702, ,367 2,573 $177,114,093 $333,414,105 $362,278,827 $681,983,397 $1,015,397,502 $539,392,920 $3,290,297 $6,193,925 $13,514,141 $8,549, , $121,177,870 $285,979,773 $247,863,825 $584,958,627 $369,041,695 $870,938,400 $2,251,154 $5,312,724 $13,544,908 $6,195, , $264,025,194 $31,830,251 $540,051,534 $65,107,332 $804,076,728 $96,937,583 $4,904,868 $591,319 $11,625,853 $819, ,638 2,266 $293,704,052 $212,236,235 $434,119,572 $600,758,289 $646,355,807 $894,462,341 $3,942,770 $5,456,220 $11,871,985 $9,222, ,469 2,446 $190,437,179 $317,058,333 $389,530,593 $648,528,408 $579,967,772 $965,586,741 $3,537,803 $5,890,079 $14,498,666 $8,126, , $176,880,810 $95,698,117 $195,746,148 $361,801,656 $291,444,265 $538,682,466 $1,777,810 $3,285,963 $3,192,014 $7,341, , $104,174,088 $553,633,824 $1,132,432,821 $213,083,361 $1,686,066,645 $317,257,449 $10,285,007 $1,935,270 $29,497,286 $4,049, ,000 1,833 $237,612,307 $129,602,000 $265,095,000 $486,025,173 $394,697,000 $723,637,480 $2,407,652 $4,414,189 $10,418,272 $5,749, , $280,147,683 $93,054,236 $190,338,210 $573,029,352 $283,392,446 $853,177,035 $1,728,694 $5,204,380 $13,775,656 $4,061, , $370,195,153 $68,896,423 $140,924,502 $757,217,358 $1,127,412,511 $209,820,925 $1,279,908 $6,877,216 $18,990,560 $2,326, $80,042,195 $99,301,052 $203,115,789 $163,722,672 $302,416,841 $243,764,867 $1,844,743 $1,486,966 $3,661,202 $3,907, ,332 1,081 $172,578,023 $140,073,842 $353,000,502 $286,514,676 $525,578,525 $426,588,518 $3,206,029 $2,602,190 $7,764,670 $5,218, , $287,612,758 $62,131,199 $588,298,824 $127,086,543 $875,911,582 $189,217,742 $5,343,061 $1,154,228 $13,979,483 $1,811, , $171,256,083 $121,307,472 $350,296,533 $248,128,920 $521,552,616 $369,436,392 $3,181,471 $2,253,562 $8,245,395 $4,284, $119,415,283 $83,463,688 $244,258,533 $170,721,180 $363,673,816 $254,184,868 $2,218,410 $1,550,528 $3,465,066 $5,061, , $148,912,698 $69,155,627 $141,454,692 $304,594,155 $210,610,319 $453,506,853 $1,284,723 $2,766,392 $1,719,073 $6,926, $60,990,701 $84,785,628 $124,753,707 $173,425,149 $185,744,408 $258,210,777 $1,133,041 $1,575,086 $2,103,653 $3,138, ,027 3,555 $460,709,190 $133,049,413 $272,146,527 $942,359,706 $1,403,068,896 $405,195,940 $2,471,695 $8,558,720 $20,386,586 $5,468, , $317,810,024 $50,467,019 $650,065,959 $103,227,993 $967,875,983 $153,695,012 $5,904,043 $937,540 $13,556,445 $1,865, , $127,917,174 $233,465,043 $261,648,765 $477,542,133 $389,565,939 $711,007,176 $2,376,352 $4,337,144 $10,237,520 $5,487, $118,870,954 $49,585,725 $101,425,347 $243,145,134 $151,011,072 $362,016,088 $2,208,298 $921,168 $1,776,760 $4,914, Total: 199, $25,906,610,347 $116,564,039 $52,990,793,892 $238,426,443 $78,897,404,239 $354,990,482 $481,274,166 $2,165,442 $1,190,405,857 $4,495, ,733 $354,228,186 $724,557,654 $1,078,785,840 $6,580,594 $16,040, ,422 $443,523,964 $907,208,109 $1,350,732,073 $8,239,466 $20,048,155 *Foreclosure data from RealtyTrac. Data is for zip codes fully or partially within city boundary numbers are projections based upon recent trends. 6,591 $854,180,862 $1,747,188,126 $2,601,368,988 $15,868,351 $40,261,680 SEPTEMBER

12 Methodology Direct impact to foreclosed homes was calculated using methodology from the U.S. Joint Economic Committee Report (Sheltering Neighborhoods from the Subprime Foreclosure Storm) using median county home value from U.S Census, decline estimate of 22%, and number of foreclosures from RealtyTrac. The 22% decline estimate is based on the most conservative property value decline ranging from 22% to 28% based on The Value of Foreclosed Property, Anthony Pennington-Cross, Marquette University and RealtyTrac 2010 sales report. Neighboring homes value decline was calculated using methodology from the U.S. Joint Economic Committee Report (Sheltering Neighborhoods from the Subprime Foreclosure Storm) using median county home value from U.S. Census, decline in value of 0.9%, and number of foreclosures from RealtyTrac. The decline estimate is based on a conservative decline estimate of 0.9% on one-eighth mile radius (approximately 50 homes) based on The External Costs of Foreclosure: The Impact of Single-Family Mortgage Foreclosures on Property Values. Dan Immergluck, Georgia Institute of Technology and Geoff Smith, Woodstock Institute. Higher estimates are put the decline at 1.4% in low to moderate income communities and others double the impact radius to a quarter of a mile. Property tax losses were estimated using lost home values (foreclosed and impacted homes as described in prior section) and California effective property tax rate of 0.61% from the U.S. Census and Tax Foundation. Impact to local governments based on The Municipal Cost of Foreclosures: A Chicago Case Study. Many experts, including the U.S. Joint Economic Committee Report, use the $19,229 cost from the Chicago study as an approximate cost of foreclosure. The Chicago study was published in 2005 and may not capture the full post-crisis level of impacts and level of costs in California. The cost is conservatively calculated using only REO s (bank-owned properties). 10 The Wall Street WRECKING BALL

13 Endnotes: i RealtyTrac ii Ibid. iii Home Wreckers: How Wall St Foreclosures Are Devastating Communities. March iv CoreLogic press release.07 Jun v The Value of Foreclosed Property, Anthony Pennington-Cross, Marquette University. vi Direct impact to foreclosed homes was calculated using methodology from the U.S. Joint Economic Committee using median county home value from U.S Census, decline estimate of 22%, and number of foreclosures from RealtyTrac. The 22% decline estimate is based on the most conservative decline ranging from 22% to 28% based on The Value of Foreclosed Property, Anthony Pennington-Cross, Marquette University and RealtyTrac 2010 sales report. vii The External Costs of Foreclosure: The Impact of Single-Family Mortgage Foreclosures on Property Values. Dan Immergluck, Georgia Institute of Technology and Geoff Smith, Woodstock Institute. viii Neighboring home value decline was calculated using methodology from the U.S. Joint Economic Committee using median county home value from U.S. Census, decline in value of 0.9%, and number of foreclosures from RealtyTrac. The decline estimate is based on a conservative decline estimate of 0.9% to oneeighth mile radius (approximately 50 homes) based on The External Costs of Foreclosure: The Impact of Single-Family Mortgage Foreclosures on Property Values. Dan Immergluck, Georgia Institute of Technology and Geoff Smith, Woodstock Institute. Higher estimates are a 1.4% decline in low to moderate income communities and others double the impact radius to a quarter of mile. ix Consumer Finance: Tapping Home Equity in Retirement. Amy Hoak, Wall St. Journal. March 17, x Property tax losses were estimated using lost home values (foreclosed and impacted homes as described in prior section) and effective tax rate of 0.61% from the U.S. Census and Tax Foundation. xi Methodology based on The Municipal Cost of Foreclosures: A Chicago Case Study. Many experts, including the U.S. Joint Economic Committee, use the $19,229 cost from the Chicago study as an approximate cost of foreclosure. Also, the Chicago study from 2005 likely does not capture the full post-crisis level of impacts and level of costs in California. We used a conservative method of only calculating those cost for REO s (bank-owned properties). xii xiii Cost per foreclosure of $19,229 based on U.S. Joint Economic Committee report using estimates The Municipal Cost of Foreclosures: A Chicago Case Study. xiv CA Board of Equalization, CA Property Tax Oveview. xv The New Bottom Line. The Win/Win Solution. Aug xvi CoreLogic underwater data and methodology from The Win/Win Solution. The New Bottom Line. Aug xvii Includes bailouts that BofA has paid back and federal guarantee programs it has exited. xviii xix xx xxi Includes bailouts that the bank has paid back. xxii xxiii 2010 not yet available xxiv xxv Includes bailouts that the bank has paid back. xxvi xxvii WFC DEF 14A, 21 Mar 2011, xxviii WFC DEF 14A, 21 Mar 2011, xxix Includes bailouts that the bank has paid back. xxx xxxi xxxii Includes bailouts that the bank has paid back. xxxiii xxxiv xxxv xxxvi Includes bailouts that the bank has paid back. xxxvii xxxviii Aaron Luccheti and Randall Smith. As Street Rebounds, So Does Top Pay. Jan 22, SEPTEMBER

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