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Petaluma City Council backs state effort on mortgage fraud

The Petaluma City Council is again taking a stand in the foreclosure crisis.

On Monday, the council voted 6-0 to throw its backing behind state Attorney General Kamala Harris' recent decision to form an alliance with the attorney general of Nevada to investigate mortgage fraud.

The city's letter of support to Harris cites allegations that several national banks in California are using fraudulent documentation, foreclosing without holding the mortgage in question and failing to uphold loan modification promises.

If such allegations are true, Petaluma leaders want Harris to seek damages not only for affected homeowners but also for cities and counties who have been hit by the devastated real estate market. Foreclosures often erode values in surrounding properties.

Since 2007, property tax revenue in Petaluma is down 11 percent, costing the city more than $800,000, according to city information. Property transfer taxes are down nearly $200,000 for the same period.

Monday's vote was supported by Occupy Petaluma, which has made opposition to foreclosures central to its protest and outreach efforts including a community workshop on Sunday that Mayor David Glass and Councilwoman Tiffany Renee attended.

"The sickness of a system that continues to dispossess families of home and hearth must be stopped now," Amy Hanks, a health care provider and Occupy member told the council before the vote. "We can't save the patients if we don't stop the bleed."

Council and Occupy Petaluma also collaborated last month on a letter asking mortgage lenders and regulators to halt foreclosures and evictions during the holidays.

At the time, council also voted to ask Sonoma County Sheriff Steve Freitas to refrain from assisting evictions from Thanksgiving to New Year's Day. Glass, however, stopped short of sending the letter after realizing the city would be asking the sheriff to break the law.

This time the council opted to ask the Attorney General's Office to work with the governor, legislators and courts to suspend requirements that sheriffs serve all processes and notices related to foreclosures and evictions.


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