Today the Center for Popular Democracy, partnering with the Alliance of Californians for Community Empowerment and the Home Defenders League, released a new report, California in Crisis: How Wells Fargo’s Foreclosure Pipeline is Damaging California’s Communities. 

At a press conference outside Wells Fargo’s San Francisco headquarters, homeowners, elected officials, and policy experts gathered to call on the bank to adopt common-sense reforms to avoid major harm to California’s economy in 2013. 

Read the full report here and join our call for reform here. 

The findings of the report are disturbing. The housing crisis remains a major cause of the economic crisis that is keeping 10 percent of Californians unemployed. Two million California homeowners are underwater and the debt is crippling the State’s economy by holding back consumer spending. 

Since 2008, banks have foreclosed on approximately 1.7 million California homes. Right now, around 65,000 California homeowners are in the “foreclosure pipeline,” at risk of losing their homes.  Wells Fargo is the biggest mortgage servicer in California, responsible for nearly one in five of these impending foreclosures. Our report shows that if all 11,616 Wells Fargo-serviced homes go through foreclosure, California will take a $3.3 billion hit to property values and government tax revenues. 

Every month, more homes fall into the foreclosure pipeline, compounding this disaster. African-American and Latino borrowers and communities are particularly hard hit. 

Californians do not have to accept this bleak future. Economists and policy experts across the political spectrum agree that widespread modification of home mortgages to current market value would prevent tens of thousands of needless foreclosures, inject billions of dollars into the economy, create hundreds of thousands of new jobs and would even be in the financial interest of the investors who own the mortgages. 

Wells Fargo is pivotal to determining whether principal reduction becomes a widespread solution. Recent reports show that Wells Fargo is providing far less principal reduction than Bank of America, in California, despite the fact that it services more loans.

CPD is joining our allies at ACCE, who have launched a campaign to demand that Wells Fargo let families stay in their homes. We are calling upon Wells Fargo to: (1) commit to a broad program of principal reduction, (2) be honest with Californians by reporting data on its principal reduction, short sales, and foreclosures by race, income, and zip code, and (3) immediately stop all foreclosures until the first two solutions are implemented.

We urge you to support this campaign by signing ACCE’s letter to Wells Fargo CEO John Stump - click here.

After years of predatory lending and heartless foreclosures, it is time for Wells Fargo to stop. By signing the letter, you’re sending a clear message to the bank: Stop the needless foreclosures. Stop the needless evictions. End this housing crisis.

The California in Crisis report typifies CPD’s mission of developing cutting-edge state and local policies that deliver tangible benefits to communities and building organizational infrastructure and capacity so that our partners can grow stronger and expand.

You can click here to support our work.