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California Attorney General Joins Coalition Pushing Back on “Pay to Pay” Mortgage Fees

“Some financial service providers charge fees if a consumer decides to use a certain type of payment method, such as making a payment over the telephone, through a website, or through a third-party service,” Bonta and other attorneys general wrote in a letter they co-signed addressed to Rohit Chopra, Director, Consumer Financial Protection Bureau (CFPB). The Hawaii Office of Consumer Protection also signed the letter.

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By Antonio‌ ‌Ray‌ ‌Harvey‌, ‌California‌ ‌Black‌ ‌Media‌

Last week, California Attorney General Rob Bonta called on the federal government to outlaw additional fees companies charge homeowners for paying their mortgages.

California is joining 20 other states and the District of Columbia in the effort.

“Some financial service providers charge fees if a consumer decides to use a certain type of payment method, such as making a payment over the telephone, through a website, or through a third-party service,” Bonta and other attorneys general wrote in a letter they co-signed addressed to Rohit Chopra, Director, Consumer Financial Protection Bureau (CFPB). The Hawaii Office of Consumer Protection also signed the letter.

“While these type of ‘pay to pay’ fees are charged by service providers in several different markets, the issues raised by these fees are particularly insidious in the mortgage industry because, unlike most marketplaces, homeowners have no choice in their mortgage servicer,” the letter continued.

When homeowners decide to take out a mortgage, many believe that they are entering into a long-term relationship with a specific financial institution. That is not always the case, according to the California Department of Justice (DOJ).

After origination “many mortgage loans and their servicing rights are sold in secondary markets,” and could be “sold many times over the course of the loan,” the DOJ states.

“This means that homeowners don’t and can’t know who will service their mortgage loan and are therefore unable to avoid ‘pay to pay’ fees by taking their business elsewhere,” The DOJ explained.

Bonta said the problem is critical in California because the state is already facing a housing affordability problem.

“As costs of living continue to rise, the last thing Californians need is mortgage servicers taking advantage of this captive market in order to pad their bottom lines,” Bonta said. “I urge CFPB to put a stop to these abusive junk fees.”

Homeowners and renters in California struggle with the costs of housing costs and taxes. Additional fees companies tack onto payments increase those burdens on consumers in the Golden State, where only about 31% of households can afford to buy a median-priced home, according to the Public Policy Institute of California.

African American homeowners in California also potentially face increased costs due to documented discriminatory practices common in the homebuying and selling processes.

Last year, Gov. Gavin Newsom signed Assembly Bill (AB) 948 after several reports revealed home appraisers valued homes owned by Blacks and other minorities at much lower prices than ones owned by Whites.

Wells Fargo has come under fire more than once for its discriminatory lending and banking services. According to findings of a Bloomberg News analysis released last month, the global San Francisco-based financial services company rejected 53% of Black homeowners who applied for refinancing loans during the pandemic in 2020. It only rejected 28% of white applicants.

The board of the California-Hawaii State Conference of the NAACP met this weekend to discuss Wells Fargo’s record on providing its services to African American customers.

Among the country’s major lenders, Wells Fargo’s gap between Whites and Blacks the company approved for loans was the widest.

According to Zillow’s Consumer Housing Trends Report released last year, Black and other minority renters pay more in application fees and security deposits when renting apartments. They also fill out more rental applications, on average, before finding a place to live than white renters.

The multi-state coalition’s letter says, “There is no uniformity in convenience fees among mortgage servicers. Some charge them and some don’t.”

And the charges can add up.

For example, the letter spotlights one servicer that currently charges its borrowers $7.50 to make an online payment or pay via telephone through an automated service. If consumers want to speak to a live operator to make their payment, they will be charged $17.50.

Based out of New Jersey, the mortgage company that provides this service calls the process “SpeedPay,” which is one of the “one-time payment options” that a borrower may use to make his or her monthly mortgage payment, as stated on the company’s website.

States joining the initiative are Illinois, California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, and Washington.

Bonta agrees, adding that the payments are “one example of junk fees charged to consumers in a multitude of financial products and services” offered by some banks, credit card companies, pre-paid debit card providers and others.

“For struggling homeowners trying to make their monthly mortgage payment, ‘pay to pay’ fees only rub salt in the wound,” said the California Attorney General.

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Activism

Oakland Post: Week of June 12-18, 2024

The printed Weekly Edition of the Oakland Post: Week of June 12-18, 2024

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To enlarge your view of this issue, use the slider, magnifying glass icon or full page icon in the lower right corner of the browser window.

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ICAC Invites Community to Benefit from Safe Car Park Program

The Interfaith Council of Alameda County (ICAC) will hold a meeting to announce a faith-based expansion of overnight safe car parking for unhoused families on Thursday, June 13, 2024, from 1-2 p.m. at Williams Chapel Baptist Church located at 1410 10th Avenue in Oakland. The ICAC President, Rev. Ken Chambers, announced that Williams Chapel, pastored by Rev. Kenneth Anderson, and members of ICAC, has also planned to open an overnight safe car parking program and day center to provide unhoused neighbors and families with wrap-around services.

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Chambers said, "ICAC's goal is to just serve Oakland by helping to make the community surrounding 10th Avenue and International Boulevard both welcoming and safe."
Chambers said, "ICAC's goal is to just serve Oakland by helping to make the community surrounding 10th Avenue and International Boulevard both welcoming and safe."

by Post Staff

The Interfaith Council of Alameda County (ICAC) will hold a meeting to announce a faith-based expansion of overnight safe car parking for unhoused families on Thursday, June 13, 2024, from 1-2 p.m. at Williams Chapel Baptist Church located at 1410 10th Avenue in Oakland.

The ICAC President, Rev. Ken Chambers, announced that Williams Chapel, pastored by Rev. Kenneth Anderson, and members of ICAC, has also planned to open an overnight safe car parking program and day center to provide unhoused neighbors and families with wrap-around services.

Rev. Chambers said additional support for the program will also come from Bishop Bob Jackson, Pastor of Acts Full Gospel Church and Pastor Phyllis Scott, head of the Oakland Police Chaplaincy Program.

Chambers said, “ICAC’s goal is to just serve Oakland by helping to make the community surrounding 10th Avenue and International Boulevard both welcoming and safe.”

David Longhurst, a member of Oakland Temple LDS Church and an ICAC board member, said

“We can make the city of Oakland safer, one block at a time, by connecting our community and neighbors.”

Chambers said ICAC has a $450,000 grant commitment from the City of Oakland and a $2.5M grant request has been presented to Nate Miley, President of the Alameda County Board of Supervisors President Nate Miley to cover and expand ICAC’s Safe Car Park Program located at West Side Missionary Baptist Church to additional locations including Center Street Baptist Church, Taylor Memorial United Methodist Church, Corinthians Baptist Church, Allen Temple Baptist Church, Acts Full Gospel Church, and other congregations.

Dr. Ken Chambers said he and ICAC are assisting congregations on how to receive a one-time $5,000 grant. “ICAC has plans for several tiny homes with kitchens, living space and bathrooms that we hope will become available this fall in partnership with the State, County and City of Oakland.”

Chambers is appealing to the public to help with transitioning the unhoused populations into tiny homes or affordable housing. “If you or anyone you know is living out of a car and needs a safe place to park overnight, visit interfaithAC.org, call 510-239-6681, or stop by the ICAC hub at 732 Willow Street, Oakland, CA 94607 between the hours of 7 p.m. – 9 p.m.”

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Calif. Leaders Discuss Foster Care Reform Strategies for Black and Brown Youth

Before becoming a nationally recognized social justice leader and a member of California’s Mandated Reporting Taskforce, Shane Harris spent 13 years as a foster care youth after he lost both of his parents. As President of the national civil rights organization, People’s Association of Justice Advocates (PAJA), he’s aiming to solve some of the toughest challenges Black and Brown children in the foster care system face.

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Shane Harris, PAJA President and member of the California Mandated Reporting Taskforce (center) with Hafsa Kaka, Senior Advisor on Homelessness to Governor Gavin Newsom and Dr. Janet Kelly, Founder & Director of Sanctuary of Hope LA (far right) (Lila Brown CBM)
Shane Harris, PAJA President and member of the California Mandated Reporting Taskforce (center) with Hafsa Kaka, Senior Advisor on Homelessness to Governor Gavin Newsom and Dr. Janet Kelly, Founder & Director of Sanctuary of Hope LA (far right) (Lila Brown CBM)

By Lila Brown, California Black Media  

 Before becoming a nationally recognized social justice leader and a member of California’s Mandated Reporting Taskforce, Shane Harris spent 13 years as a foster care youth after he lost both of his parents. As President of the national civil rights organization, People’s Association of Justice Advocates (PAJA), he’s aiming to solve some of the toughest challenges Black and Brown children in the foster care system face.

During National Foster Care Month in May, Harris visited the Sanctuary of Hope in Los Angeles to host a roundtable meeting with current and former foster youth, many of whom, like Harris, have beat the odds and become successful professionals.

According to the federal government’s Adoption and Foster Care Analysis and Reporting System, there are nearly 370,000 American children and youth in foster care.

Nationally, Black children are overrepresented in foster care. According to datacenter.kidscount.org, Black children represented 14% of the total child population in the United States. However, they represented 23% of all children in foster care. Harris pointed out that one out of every four foster youth go homeless upon exiting foster care in California. Across the state, there are nearly 65,000 children in foster care, he added. Of the 65,000 children in foster care across California, 14,000 of them are Black American.

Harris also announced a new effort already underway to push for the removal of the term “case” in L.A. County when referring to foster youth during the roundtable which featured Hafsa Kaka, Senior Advisor to Gov. Gavin Newsom and Janet Kelly, the Founder and Director of Sanctuary of Hope. The session focused on solving problems foster youth face.

Sharing personal stories, insights, and various visions for policy changes, the participants discussed numerous solutions and addressed specific concerns about ongoing challenges with the foster care system.

One top priority was how to close the foster care to homelessness pipeline for the disproportionate number of Black and Brown children in LA County’s and the state’s foster care system.

“When you see the direct connection between the disproportionate rates of Black children in foster care and the disproportionate rates of Black people in the general homeless population, there is a very clear connection there in which our foster youth are coming out of care,” stated Harris during opening remarks.

Kaka said the governor has been intentional about making sure that foster children are homeless prioritized as the state addresses homelessness.

“This is a critical moment for foster care,” said Kaka. “The systems that are working together are looking at leveraging federal, state and local funds.”

Harris said he has already begun efforts in San Diego County to drop the word “case” when referring to homeless youth.

“We are asking for a 90-day public input period, in which the county CEO and leadership can facilitate discussions with the community on replacement terminology. There’s plenty of ideas,” Harris elaborated.

Kelly said a majority of the youth who go through the Sanctuary of Hope program are young people who have experienced some form of housing instability or housing crisis.

“The goal of the work that we do is really centered around helping young people leave here with leadership skills and other forms of what we call protective factors in order for them to continue on with their stabilization journey and become loving, caring and active citizens in this world,” Kelly said.

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