Oakland NEIGHBORHOODS 1
Overview There is an epidemic of foreclosures throughout the country, including in Oakland and California. Last year there were 1.2 million foreclosures filed nationwide (that s over 2 foreclosures every minute). That was a huge increase from 2005 when there were about 900,000 foreclosures filed. The foreclosure problem is expected to get worse this year, with about 1.5 million foreclosure filings nationwide. In California in 2006, there were 142429 foreclosure filings. 1 This was an increase of 131% from the number of foreclosures filed in 2005, the third largest percentage increase in the country. The 142429 foreclosure filings represents one foreclosure filing for every 86 households in the state. This is the fourteenth highest foreclosure rate in the country based on the percentage of households in foreclosure. In this report, we identify the zip codes in Oakland with the highest number of foreclosure proceedings in April 2007. We also examine the number of foreclosure filings in April 2007 compared to April 2006. Other reports have shown a strong correlation between the increase in foreclosures and the increase in subprime mortgages, which not only have higher rates and fees, but also contain predatory loan terms such as prepayment penalties and exploding adjustable interest rates. 2 We will examine the causes of the foreclosure crisis in Oakland and the role that subprime loans have played in this crisis in a future report. Foreclosures in California and Oakland. In California in 2006, there were 142429 foreclosure filings. This was an increase of 131% from the number of foreclosures filed in 2005, the third largest percentage increase in the country. The 142429 foreclosure filings represents one foreclosure filing for every 86 households in the state. This is the fourteenth highest foreclosure rate in the country based on the percentage of households in foreclosure. California has the fourteenth highest foreclosure rate in the country. In 2006, there were 12,280 foreclosure filings in the Oakland Metropolitan area This figure represents one foreclosure filing for every 73 households -- the 38th highest foreclosure rate in the country based on the percentage of households in foreclosure. Oakland has the 38th highest foreclosure rate in the country. 1 All data in this report comes from Realty Trac. 2 The most recent report which looked at this correlation is Losing Ground: Foreclosures in the Subprime Market and Their Cost to Homeowners, Center for Responsible Lending, December 2006. The report predicted that 1 in 5 subprime loans will end up in foreclosure. 2
Foreclosure Filings -- Comparing April 2007 to April 2006 In Oakland in April 2007, mortgage companies filed 261 foreclosure filings against homeowners who were behind on their mortgage. This was over 2 times greater than the 124 notices filed just a year earlier in April 2006. # of Foreclosure Filings 300 250 200 150 100 50 0 124 261 April 2006 April 2007 Foreclosure proceedings in Oakland in April 2007. There are several types of measurable foreclosure activity in California. In this report, we combined the figures for each of these categories and identified the ten zip codes in Oakland with the highest number of properties in the foreclosure process during the month of April. [See methodology for definitions and more information.] Notice of Default Filed Notice of Trustee Sale Posted Repossessed TOTAL Zip by Lender FILINGS 94605 47 5 4 56 94603 35 10 3 48 94607 21 0 3 24 94601 18 3 0 21 94621 20 0 0 20 94619 18 0 0 18 94609 13 4 0 17 94602 13 1 1 15 94606 11 1 0 12 94612 10 0 1 11 3
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ACORN s Recommendations: 1) Mortgage Companies, Servicers, and Wall Street Investors should institute a one-year moratorium on all foreclosures involving subprime loans that were unaffordable, either from the beginning of the loan or after the rate and payment increased, and should make new affordable loans to these customers by converting their adjustable rates to fixed rates or by reducing the interest rate and/or balance of the loan. 2) Mortgage lenders should change their practices, such as those regarding stated income and adjustable rate loans, in order to prevent future foreclosures. 3) State Attorney Generals should seek restraining orders and injunctions preventing foreclosures on loans that were made through unfair and deceptive practices in violation of state consumer protection laws. 4) County Sheriffs and Courts should declare a six-month moratorium on foreclosures of subprime properties with subprime loans in their county and refuse to conduct foreclosure sales or auctions. 5) States and Congress should pass legislation to protect families against predatory mortgage lending and foreclosure rescue scams. 6) The Federal Reserve should use its authority under the Home Ownership and Equity Protection Act (HOEPA) to issue regulations that will protect families from predatory lenders. 7) Congress should increase funding for the HUD Housing Counseling program from $50 million to $75 million, with some of the increase earmarked for foreclosure prevention counseling. 8) Cities, Counties, States, and the Mortgage Industry should provide funding for community outreach to borrowers in danger of losing their homes and to housing counseling programs to help homeowners avoid foreclosure. 9) State and Federal Regulators should devote the necessary resources to investigate and prosecute predatory lenders and other deceitful players in the loan process. 10) States and Congress should adopt a foreclosure prevention program that requires mortgage companies to: a) include a list of approved housing counseling agencies with telephone numbers in every foreclosure notice sent to homeowners; b) work with the counseling agency if authorized by the homeowner; and c) put all foreclosure activity on hold for 30 days when a homeowner is working with a counseling agency. 5
Methodology: All of the data in this report is based on data purchased from Realty Trac. All references to foreclosure filing refer to a total of the types of filings as listed below. Different states use different procedures and names for their filings. Notice of Default : A publicly recorded notice that a property owner has missed scheduled loan payments for a loan secured by a property. Some states require lenders to record a notice of default to begin the foreclosure process. Lis Pendens: A publicly recorded notice of a pending lawsuit against a property owner that may affect the ownership of a property. Some states require lenders to file a lis pendens to begin the foreclosure process if a borrower is in default on loan payments. Notice of Trustee Sale Posted or Notice of Foreclosure Sale Posted: A document announcing the public sale of a property to recover a debt owed by the owner of the property. The notice is mailed to parties affected by the sale of a property, advertised in local publications and recorded in public records. Among other information, it provides the date, time and location of the sale. REO: Real Estate Owned by the lender -- this status indicates the property is now owned by the lender or bank as a result of a foreclosure. 6