Denver officials looking to slow foreclosures in hard-hit neighborhoods might take a cue from other cities and states: Tell banks to do more to help residents keep their homes or risk losing hefty government deposits.
City Council members Michael Hancock and Paul Lopez recently began reviewing data that show which lenders have high foreclosure rates in Denver. They hope to use the information to see whether those lenders will help clean up the mess.
They differ on how they'd approach that goal.
Lopez said he is intrigued by a recent move by the Los Angeles City Council to rate banks' "cooperation" in efforts to keep people in their homes and out of foreclosure.
Banks that get a low rating could get shut out when it comes to where that city banks - and deposits of nearly $30 billion in savings and pension funds hang in the balance.
A similar initiative in Denver could affect about $2.4 billion in annual city deposits and $1.7 billion in pension investments.
Anger that lenders aren't doing enough to help homeowners on the brink has prompted elected officials from a growing number of states and cities to use the purchasing power of their governments to make statements.
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