October 15, 2012
ICCR Ally Succeeds in Bank of America Engagement
by Robert Kropp
Virginians Organized for Interfaith Community Engagement persuades Bank of America to help
homeowners in Virginia county hit hard by mortgage crisis.
The National Mortgage
Settlement, negotiated by state Attorneys General and announced in February of this year, was
designed to provide relief for homeowners in need of loan modifications, borrowers with mortgages
that are underwater, and those who lost their homes to foreclosure during the years following the
Prince William County, Virginia, was particularly devastated by
the affects of the crisis. More than 20,000 residents have lost their homes to foreclosure, and
thousands more are in immediate danger of foreclosure. Almost half of the county's homeowners are
currently underwater on their mortgages; that is, they owe more on their mortgages than the value
of their homes.
Virginians Organized for
Interfaith Community Engagement (VOICE), a coalition of almost 50 faith communities and civic
organizations, has proposed that lenders reinvest up to $500 million in Prince William communities,
in loan modifications, credit restoration, and loans and investments to help ensure housing for
families of all income levels.
VOICE announced the first victory in its efforts recently,
when Bank of America announced that it had arranged for $40 million in principal reduction and loan
forgiveness in the county. In January, 2008, Bank of America acquired Countrywide Financial, one of
the most notorious of the many predatory mortgage lenders whose practices contributed greatly to
the financial crisis.
Leading up to the crisis, predatory lenders such as Countrywide
devised loans that in the short term were affordable to low-income borrowers and those with
questionable credit, but the subsequent decline in housing values made mortgages unaffordable and
VOICE, Bank of America also agreed to contribute $300,000 for non-profit housing counselors,
and help develop a credit restoration and new home loans initiative for families that lost their
homes to foreclosure or currently hold predatory mortgages.
The Bank committed also to
investing $5 million in loans to help fund a 300-unit affordable housing pilot, and provide $15
million in loans to community development financial institutions (CDFIs) to help spur further
development in the county.
announced that it has scheduled a meeting with Jeff Immelt, CEO of General Electric, whose WMC
Mortgage subsidiary was responsible for up to $300 million in mortgage loans in the county.
VOICE hopes to meet with JPMorgan Chase chief executive Jamie Dimon as well, but has been
unable to do so. Through Long Beach Mortgage, BearStearns, and Washington Mutual, JPMorgan was
responsible for up to $200 million in subprime mortgage loans in the county.