Virginia Activists Press Banks for Foreclosure Aid

June 5, 2012

Nearly 1,000 homeowners in Prince William County and the cities of Manassas and Manassas Park, Virginia, have been identified as eligible for assistance in the $25 billion national mortgage settlement announced this year, two banks reported at a community meeting on Sunday, June 3.

The announcements about how the housing settlement will affect Prince William County came at a community meeting sponsored by Virginians Organized for Interfaith Community Engagement (VOICE), which has been pressing banks to provide hundreds of millions of dollars in Prince William County to compensate for the devastation caused by the wave of foreclosures.

In Virginia, Prince William County was particularly hard hit by the foreclosure crisis. The county alone has had more than 16,000 foreclosures since 2004, representing more than 10 percent of all homes in the county.

Over 16,000 Foreclosures in Prince William County Since 2004

At last Sunday’s meeting, Bank of America representative Andrew Plepler said 435 households in Prince William that have Bank of America loans are eligible to have the principal reduced on their mortgages. The average reduction will be $90,000.

Plepler said another 234 homeowners who are underwater on their mortgage — that is, the homeowner owes more than the home is worth — are eligible for refinancing under the settlement, which would reduce monthly payments by about $300 a month.

JP Morgan Chase representative Rebecca Mairone said 165 JP Morgan customers are eligible for principal reduction and another 100 are eligible for refinancing.

The banks said they will be reaching out to eligible homeowners in coming months, and want to work through VOICE to reach out to those customers.

VOICE has lobbied for loan modifications and other changes to help affected homeowners. It estimates that the county alone needs anywhere from $300 million to $500 million to fix the damage caused by the foreclosure crisis. Meanwhile, the $25 billion National Mortgage Settlement — which five national banks, including Bank Of America and JP Morgan, agreed to — would provide just $480 million to all of Virginia.

“What has been done so far is not enough,” said Rev. Clyde Ellis, a Woodbridge pastor who helped establish VOICE. “I will accept it as a good first step.”

Ellis said he wants to leverage Prince William County’s pivotal role in the coming elections — the county is traditionally a swing county in Virginia, and Prince William is expected to be a swing state in the presidential election — to elevate the issue of foreclosures and bring in money to revitalize affected communities. Another VOICE rally is scheduled for October.

“Don’t come here in November looking for votes if you aren’t willing to be an agent for restoration in Prince William County,” Ellis said.

The bank responsible for perhaps the most foreclosures in Prince William County — GE subsidiary WMC Mortgage — is not a part of the National Mortgage Settlement. A WMC representative — Keith Morgan, GE Capital’s general counsel — attended Sunday’s meeting, and said the company would negotiate with VOICE in the coming months.

GE’s CEO Jeffrey Immelt has already had a face-to-face meeting with VOICE, and Immelt was sickened by some of the stories he heard about the loans that WMC brokered, according to Morgan.

A Prince William County resident who took out a WMC mortgage spoke at Sunday’s meeting. Wasiu Adedeji said his real estate agent told him he qualified for a $425,000 loan on his $35,000 annual income. Adedeji was suspicious but agreed to sign a loan brokered by WMC that had an 8 percent interest rate but that could have gone up to 14 percent. His monthly payment was more than $3,000. He ended up short selling his home.

“Looking back I should have known better,” he said. “I never should have signed those papers. But I also know I was taken advantage of.”

Morgan said GE is in a different posture than Bank of America or JP Morgan because WMC has essentially been shut down and was never in the business of servicing the mortgages it sold. Still, GE is interested in negotiating with VOICE.

“We are open to listening what you have to say,” Morgan said at the meeting.

The Rev. Gerry Creedon, pastor of Holy Family Catholic Church in Dale City, said that 200 families in Prince William County have already received loan modifications with help from the housing counselors that the banks paid for at the urging of VOICE, entirely separate from the announcements made Sunday.

“I was cynical. I thought we were tilting at windmills,” Creedon said about VOICE’s initial efforts. “But progress has been made. It is real.”

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