>> good afternoon, supervisors. brian. >> thank you. my constituents have often asked me this question. what are some of the services and tools that the mayor's office on housing can help support families going through foreclosure? >> sure. we have a powerpoint presentation that we were going to do. we can do it now more formally. supervisor mar: supervisor avalos is doing this section. i should defer to him. supervisor avalos: thank you, mr. chair. we can pause on that. to see exactly what mr. chu's presentation is going to be.

thank you. i appreciated. brian, we are going to call you up a little bit later. so let me talk about the flow of the hearing, and i have a lot of speaker cards as well from chair mar. so these are three hearings that are being called together. the one with the assessor and the report we just heard. this one was on strategy is that the city might be able to employ around preventing foreclosures in san francisco. we also have a hearing on the resolution, kind of lumping them all together, so first off, i want to thank you for the report and also for the work from supervisor campos on the other hearing that we just heard, and a reminder about san francisco. we have seen about 6000 families that have suffered foreclosures in the city, and we

know that that number of families that are being affected is rising. as i mentioned before, my house has been one of the households that suffered from not a foreclosure but from difficulty with mortgages. we bought our house. my wife and i. she is a teacher. we bought our house and 2007. in 2009, our daughter was struggling with your education. it was a crisis for us to maintain her level of learning in school and actually had to pull her out to do some home schooling. it was a difficult decision for us. my wife was not able to work, and we lost your income, and we fell behind in the payments. it was a real struggle for us and my wife and i. it was a dream to be able to of our home, especially in san francisco, and we found that it was very difficult to navigate the services that were available to help households against foreclosures, and we actually

got help from the mission economic of association that worked with us over a number of months to be able to modify our loan, but i know that that is not the same experience a lot of people have had, and even with the support of some groups like them, they have not had a good experience with the banks to be a to maintain their property. that is something we want to be able to focus on today. also, last year, when i was running for mayor in the city, it became very apparent that the foreclosure crisis was something that was widespread throughout the city, and it was after that experience in december that i left the hearing that was before us today. so i want to call up -- we have michael, from the attorney general's office, and i want to thank the attorney general paris for her work.

she was actually one of the great voices across the country to ensuring that if there was one to be a settlement, it would be much stronger to what was originally being proposed by the federal government was seeking redress from banks and the issues around foreclosures and supporting households across the country, and ms. harris was great in that effort. here to talk about her work and also the legislation that is being proposed at the sacramento level is michael, and if i get your title correct, he is the senior counsel to the california attorney general harris. >> thank you, supervisor avalos, and other supervisors. thank you for having us. it is a pleasure to be here for this informational role. supervisor avalos is our

supervisor. i live there. i have seen the told a foreclosure crisis is taking in our own neighborhood, so it is a very serious and timely issue. i want to recognize supervisors campos and another. i want to a knowledge a couple of people that i have worked with, particularly as we battled towards a settlement. richardson and kevin's time, two folks who have been real leaders and advisers during the process, so i would like to talk a little bit if it is helpful for this board through the process about the settlement. as many of you know, there was a major settlement reached with the five major bank servicers. jpmorgan chase, bank of america, wells fargo, and others, citi and allied, and as the was

talking about, a broader set of issues that have to do with the servicing of mortgages, and it really relates to the bank that is the public phase of your mortgage. those are the folks that take your phone calls when a homeowner is in distress, and they need to initiate foreclosure. they are the bank that is doing it. they do not necessarily on the loan, but they are doing the servicing. our office found, in combination with 49 other attorneys general, a number of irregularities. there were a series of practices that had a very deleterious effect on the homeowners' ability to stay in their homes. irregularities in the processing of documents, much like some of the reports that were outlined today, but more than that, i think they got a sense if you're close to that investigation that there was a fundamental disconnect between the homeowners situation, where a homeowner wants a fair shake,

and just to talk to somebody and get some meaningful relief, they does want to find a way to make it work for themselves, and the bank process, which was often disorganized and very unfair and riddled with errors, and frankly, many examples of what we felt to be disregard for the rights of homeowners. as a result, the settlement, which ag harris was involved with, back in 2011, after the banks had demanded what had amounted to essentially immunity from many of the claims that we could bring against them, the ag said, "i am not going to participate any longer." she pulled california out of the talks, and we built a strike force. after that, the banks, for lack of a better term, relented on some of those positions they had

been giving us earlier, and in the end, the california share of the settlement is expected to be $18.10 billion, $12 billion of which will be principal reduction, and that is principal reduction that is enforceable, and we negotiated for some provisions that are going to channel that will lead to the homeowners who are most in need throughout the state of california and the hardest hit counties. but that is just one part of a broader movement and a broader struggle to ensure that the homeowners are getting a fair shake and to address this in a comprehensive way, which is what i think the sport is interested in. ags back -- sponsored a package of bills, the homeowners bill of rights, and there are a couple of things. the first is assuring the the due process is restored to the mortgage system, and that includes how homeowners are dealt with. that involves a single point of contact. no more calling 50 people and

each time, you have got to say it 50 times, and if the line drops, you have to repeat the entire thing over to the next person. as the assessor was talking about, assignments need to be recorded. we need to have clarity and certainty in our land records, and we need to increase the rights of homeowners to go to court. if a homeowner discovers that there is an irregularity or violation of law in the manner in which they were foreclosed on, our courts are very hostile to those claims. we founded the california courts made it difficult, even much of a material that was pointed out, it could be substantiated, and courts have been consistent in turning back many of those challenges. we need to change state law. that is something we are focused on. this creates uncertainty and is unfair to homeowners. lastly, i want to focus on the

idea of principal reduction. this is something that supervisor avalos has been involved in. if you are under water, possibly because of their homes nearby have plummeted, as part of the settlement that we have negotiated with the banks, $12 billion worth of capitalize loan balances are going to be down for californians over the next years, and that is really important because that we know from research, the limited amount of reduction that has done has really worked at keeping people in their homes, and there are people in circumstances that are very difficult. they find themselves in circumstances not unlike what supervisor avalos found themselves and, death, disability, divorce, and dismissal. this is different than people

just refuse to pay because they have the means. we found this to be less common. instead, we found that they are having a hardship. they want to pay. they want to stay in their homes. we hope to see a broader push. the agency has been a leader in pushing them as a federal policy. which is critical, because for fannie mae and freddie mac, they own 60% of the loans in our state. 60% of people have their loans bond by fannie mae and freddie mac, so if they are not doing principal reduction, there are a whole lot of people who will not get the benefit of that remedy, so i am hopeful of the leadership that the h.g. is taking and that we can find a way to work together with the san francisco county supervisors, and i again thank supervisor avalos for his help. supervisor avalos: 54 your

presentation and for your work and for the attorney general's work on this problem that we have. just a few questions that i have. one, in particular, to start off with, talking about a settlement in san francisco. $18.10 billion. is that correct? >> that is the expectation. 12 billion in principal relief and other money. supervisor avalos: given the foreclosures are a statewide problem, and that there are places that are very hard hit, even greater in terms of concentrations on whole cities and communities that are impacted, how do you see san francisco benefiting or getting services from the settlement? and what can we do to make sure that we are pursuing that for households that are struggling? >> i think that is a great question, and it is a question

that we're answering ads similar informational sessions around the state. we went to long beach and are going to san diego sent to have a discussion very much like this one. there are a couple of things. first, there will be a ramp up of the settlement. the settlement funds are not going to be able to bathe or potentially next week, but after the judge approves the settlement, there will be a period for public to apply. those who are hardest hit are often those that are the hardest to reach. they feel they have been burned so bad by their bank, they do not want to call again to have their call lost or to be rerouted. using organizations like a leading organization that we work with in the attorney general's office as well, finding a way to do real, face- to-face retail engagement in the foreclosure hot spots in box d9 and d10 and d11, that is

important. we do have a payment from the banks. there will be more detail in the coming days so that people get hud counseling as quickly as possible. we found that the people have a head counselor, if you compare them to people who do not have a head counselor, the chances of modification goes up substantially for those that have them. to get your paper work together, and folks know, i think a lot of people in the chamber to they will tell you that this is complicated subject matter. i can tell you that. i prosecute these cases when the then district attorney set up the district from a team, and this is hard subject matter. there are a lot of terms of art. they do not make it easy for you. you need someone to help walking through that. it will be critical. i think targeting that will be difficult for those who have

lost heart, but help is on the way. supervisor avalos: kind of what you touched on right now, we have organizations that do the hut counseling as well. do you see that we have sufficient resources to meet the demand that we have out there for counseling and support, and what more do you think this city can do? you have worked at the city and state level. we are city and county, so we have some flexibility, but are there things that we can do more that would be economical that we can do to enhance the services we have? >> there are very few. there is a gap of resources really. there are very few resources at the state level. we all know what our state budget deficit looks like, and we have the house of representatives that when the federal hud budget came up for a vote, they stripped of almost

all of the funding for had counseling, so hug certified counseling is difficult to get. it is very hard to do. it is very difficult work. it is hard to train and pay people. so these hud counseling agencies are struggling. if i were to give some informal advice, i would say that an investment there will be bang for your buck. there are good organizations there. they are experts who have done a good job of recruiting and retaining expert staff that can really help navigate people through. they can build the infrastructure and add more people. they will help get more people through this settlement process and in addition to the summit process find other ways to keep them in their homes. supervisor avalos: funding? could they get funding through the settlement to be allocated

for that process? >> we are still considering all of the options. that would be my expectation, but i cannot say. we plan to have a transparent public process with experts to guide us and really where it is. supervisor avalos: that is good. i think a lot of us have experience in trying to make sure that this meets our needs. in terms of reaching out to be harder served communities? >> i would have to give that one a little more thought. the standard based on my experience both in the d.a.'s office and at the state level, and having gone statewide, they really are. i know that there is a real need in district 10. there is a real need in district 9 as well.

citywide, i would expect that if there is another way to get resources up and running, i think that would be a great thing to say. supervisor avalos: we will have others. there are others in the worm that are not with that one group that will provide more information, and before you came up, i did want to mention the overall flow of the meeting. we wanted to hear ultimately from the city departments, the mayor's office, the mayor's office on housing, the sheriff's department. we have the district attorney as well here, and we actually invite to the city attorney, but the city attorney is also working on investigating issues and is not ready to bring this forward publicly. we did ask some banks if they wanted to present here, but we did not get a confirmation from banks that they would be here. i am not all that surprised by

that. after hearing from the attorney general's office, we are going to hear from members of the public. the city department can give a response afterward. but there are some people who want to ask questions. i will give the microphone to my colleagues first before we go to other parts of our hearing. supervisor mar: supervisor cohen, and then i believe in the supervisor olague. supervisor olague: my office was involved, but how to people qualify or read some of the benefits from the $18 billion you said? i know you talked about loan modifications. what is the process? >> a lot of people do call myself and, actually.

i think the best way is that people are going to interface directly with their server sir, and so each individual, if you look at the envelope in which your bill comes, it is wells fargo, bank of america, usually someone like that in california, and those are going to be the folks responsible for interfacing with the borrowers. as i said, there is still a ramp up period. i understand that people are anxious to get the supplement benefits going. the settlement still needs to be approved by the judge in the district of columbia, and after it is approved, there is a period of time under which people have to file. eligibility would generally be for people who were 60 days more or delinquent or otherwise at imminent risk of default on their loans 60 days before the settlement was announced, said that is to make sure people do not default on their loans and -- on purpose to benefit from the settlement.

supervisor cohen: what about people who defaulted before? >> those are the people i am talking about. people who are 60 days or more delinquent. they have already defaulted, so they would be eligible for benefits under the deal. supervisor cohen: you mentioned that it has to go before the court. what is the time line on that? >> we should expect some news of an later today and get a schedule before that judge. there will be objections heard. any settlements like this, the judge has to find that it is fair and that it will be in the public interest, so i cannot speculate as to time. supervisor cohen: i am not an attorney, so what are we talking about? four or five months? can you give me a range of when we will hear back from the

judge, in the time it? >> well, supervisor, you said you are not a judge, and i am not a clear point, as you mentioned earlier. it will be set by the judge, and federal district judges, they sent and hear objections, and then they will make a ruling. supervisor cohen: thank you very much. supervisor mar: supervisor olague? >> i want to go over some of this. i worked for the non-profit housing advocacy and different agencies. the last one was senior action network, and we would receive calls, and then, of course, i would refer them to agencies that were dealing directly with this issue of foreclosure. and i just wanted to mention

that most of the nonprofits that are dealing with this issue are at capacity and beyond, so i think to the extent that we can figure out how to fund this resource, i think we really need to, because on the state level, i know that ace operates on the state level and locally, but i think there was the main agency that was working on this issue at the state level, so the tenants together, the housing rights committee, and there is a few, but again, most of them are dealing with a multitude of issues in san francisco, being one of the most told cities in the country, so i just think to the extent, may i will work with the other supervisors here. that will be the next for sure, because people do not know where to go to get information on what

they need to do in order to keep their housing, so it is really a crisis out there. >> if i can, a supervisor? that is well taken, and i deeply appreciate that advice. i think our office should work together with this body as appropriate. i was talking to dean preston that i just met outside, that when folks at a housing problem, they come into their counselor, and sometimes it is a tenant problem. the landlord tenant what is its own creature. sometimes people need direct " legal representation. they do not necessarily need housing counseling for a modification. finding a way to join this together and make them accessible is going to be critical. i am becoming more and more aware. i appreciate it.

supervisor olague: they do not know where to go to get information, and sometimes they cannot afford it, so they rely on these agencies. supervisor mar: thank you. so, supervisor avalos, would you like to continue? supervisor avalos: i think the next up with supervisor campos. supervisor mar: supervisor campos? supervisor campos: i want to thank you for the work that has been done, and she stood her ground, when they were pressuring the states to agree to the terms upon of the settlement, so i want to thank our attorney general for that,

and i want to thank you for the presentation. one question that comes to mind, how do we make sure that these banks and institutions do not engage in this kind of activity going forward. what assurances do we have that they are not going to do this going forward to someone else? >> i think that is the entire question. i think that is the entire issue, you are right. i think there are a couple of things that you would do if you are a rational policy maker, and i think in this particular settlement, we have done some other ones in the past, and it did not work out as promised, so i think we took a very hard look at things we would have done differently in hindsight and set up an enforcement architecture for this deal that i think is stronger, that i think will be more transparent and will have more penalties that will hurt if

there is the kind of misconduct that happened in the past and if it repeats itself. i think you need to have a group of people that are dedicated to it. the ag, one of the first things that she did was a point at california-specific watchdog for the settlement, one of the most renowned experts in this area, who is a professor at you see irvine -- at uc irvine. that will be the difference between what is promised and delivered, so we understand that, and i think the third thing that we need to do is we need to keep going. the settlement only applies to the 40% of people who have their loans bond by a private bank or have the lines owned by a bank itself, a private investor or a bank. 60% of the loans are owned by fannie mae and freddie mac, and i think the ag has made a call

that is starting to get some traction at the federal level that they not only need to engage in principle reduction but that there has to be a higher level of accountability for whatever role they played and continue to play in the foreclosure problems we are seeing in the state, and the fourth thing is, we have to change state law. state law needs to be adopted. this is a battle that has happened in the legislature for each of the past years, and we have a high level of enrollment at a high level and the legislature, and we have a big, broad, deep coalition, and i think we have got a real chance of seeing some lasting reforms to this process going forward. the penalties that we're calling for in the homeowner bill of rights, that the h.g. is calling for, they are harsh. there are penalties that are going to stick, and quintupled with the penalties that existed before, and i think those are the things i would point out could make a difference. supervisor campos: i am

wondering if you are looking at any criminal prosecutions resulted out of this whole mess? >> i really cannot speak to that, supervisor. at the state legislature, we said the same thing, and it is difficult. just as a general practice, i do not like to talk about criminal investigations in public. supervisor campos: i understand that. supervisor mar: thank you. supervisor avalos? supervisor avalos: thank you. i really appreciate it, and i think if we are successful legislatively, we will see a lot of teeth do what we can do to hold banks accountable and support a lot of households around the state. next up, i would like to call kevin from the california reinvestment coalition. they have done several reports on the foreclosure crisis, including the wall street wrecking ball, for preparing