Los Angeles, CA – Tuesday, Los Angeles City Councilmember Richard Alarcón introduced a motion aimed at decreasing the devastating effects of foreclosures in Los Angeles. The motion, which was seconded by Council President Eric Garcetti and Councilmembers Ed Reyes, Janice Hahn and Bernard Parks, instructs the City to explore the divestiture of all deposits in banking and other financial institutions that fail to cooperate with foreclosure prevention efforts. These efforts include temporary moratoriums on foreclosures, renegotiation of mortgage principles to reflect current values and good faith negotiations with mortgagees.
Los Angeles has a $25 billion investment portfolio and on any given day from tens to hundreds of millions of dollars are invested with banks that provide home loans.
According to Foreclosure-Radar, in 2007 97,000 homes were lost in California, but 249,940 homes were lost in 2008. Moody’s Economy.com, predicts that the number of homes lost to foreclosure is likely to rise by an additional 18% this year before tapering off through 2011.