Valley residents make fighting foreclosures a community affair

The startling request was Lasseigne's introduction to the epidemic of foreclosures afflicting his flock in the northeast San Fernando Valley, a working-class, heavily immigrant area where more than 8,000 homes are either in default or have been foreclosed upon.

Over the last three months, Lasseigne and other community leaders have come up with an unusual response: They have organized more than 500 Latino immigrant families who are behind on their payments into teams that will seek to negotiate with banks as a group.

They also intend to compile detailed records of how and whether lending institutions agree to modify loans -- information they say could be given to government officials in an attempt to give distressed homeowners more favorable terms.

"If we don't make progress with the banks, we certainly expect to make progress with our elected officials," said Lasseigne, whose congregation is a member of the community-organizing group One-LA, a local affiliate of the left-leaning Industrial Areas Foundation.

The effort represents an unusual attempt at collective negotiation between a community and banks, as well as information-sharing among homeowners, housing experts say, and leaders in the northeast San Fernando Valley say they hope it can be a model for other places.

It comes as policymakers grapple with the news, announced Friday, that 1 in 10 U.S. homeowners with a mortgage were either one month behind on a payment or in foreclosure at the end of September.

But the effort has also prompted skepticism from some who say it is unrealistic to expect banks to bail out homeowners who got in way over their heads -- especially as a group.

"The loans were not made en masse," said Tom Kelly, spokesman for Chase Bank. "The issue of mortgages is a home-by-home, mortgage-by-mortgage issue."

Modifying may be particularly tricky in an area such as the northeast San Fernando Valley, where home values have fallen hundreds of thousands of dollars from where their level of a few years ago. That's because many borrowers have low-paying jobs and poor credit -- and may not be able to afford even a modified loan at a fixed rate under strict lending standards.