Report Blames Servicers For California Foreclosure Problems

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Recently, a collection of community advocacy organizations released a report that attacks mortgage servicers for their handling of foreclosures in California. The report argues that foreclosures decrease the value of the foreclosed home, result in residual property value losses in the surrounding neighborhood, and rob governments of tax revenue as a result of the property depreciation. The report also reviews foreclosures in seven California jurisdictions and claims that foreclosure practices disproportionately impact minority neighborhoods. The groups advocate for servicers to halt foreclosures until they (i) commit to a broad principal reduction program and (ii) report data on principal reduction, short sales, and foreclosures by race, income, and zip code.