Four years ago, Pamela Hall was all set. She had a management job in a high-end real estate firm, her husband worked for the federal government, her kids were almost grown, and she owned her home in San Leandro. Then came 2009.
First her variable-rate mortgage payment shot up from just under $2,000 to more than $6,500 a month. Then her husband was laid off from his ten-year job with the US Department of the Interior. Her ailing mother moved in, and she had to take custody of her teenage cousin.
Hall tried to request a mortgage modification from Bank of America, but got nowhere. "I would send ten documents and they swore they only got seven," she said. "When I sent the other three they said I had missed the deadline or didn't fill them out correctly or they didn't get the package at all.
"I know about real estate paperwork," Hall continued. "It's been my life. So when you tell me you don't have my paperwork, I know it's baloney."
When the bank rejected her loan-modification requests, Hall tried to get help from nonprofit and state agencies, but by then, she, too, had been laid off from her job as the real estate crisis deepened. The agencies told her the family's income — from her husband's housekeeping job at Kaiser — was too low for any mortgage. And then the bank began foreclosure proceedings against her.
Finally, Hall told her pastor she was going to lose her house and that the bank had scheduled a trustee sale. Her pastor told her to call the Alliance of Californians for Community Empowerment (ACCE).
ACCE is one of several community organizations fighting foreclosures in Oakland and other East Bay communities with tactics that include providing information, staging protests and phone-call campaigns, and blocking evictions with round-the-clock "occupations" of foreclosed houses. ACCE and other grassroots groups also campaigned hard for the California Homeowner Bill of Rights, which went into effect January 1. This package of legislation bans some of the most sinister foreclosure practices, such as "dual tracking" (foreclosing while the homeowner is negotiating for a mortgage modification) and "robo-signing" (mass production of foreclosure documents without adequate information). The new laws require banks to give customers a "single point of contact" and specific documents, and allow homeowners to sue their banks.
Hall's first ACCE meeting made a strong impression on her. "I'm African American," she said. "There were Asians, Spanish-speaking people, people from different neighborhoods, with different banks, but the stories were all the same."
ACCE started fighting for Hall's home, bringing dozens of supporters to "occupy" different Bank of America branch offices, demanding the staff fax a letter to the institution's headquarters requesting a stay of the sale, a mortgage modification, and "a person I could talk to on California time," Hall said.
The bank protests were peaceful, Hall said. "No one wanted to harass or be harassed — we had senior citizens, children," she said. But the "banks locked their doors as if they were being robbed." When customers complained, she explained why they were there. "Eighty-five percent went away with a positive attitude," she said.
After a half-dozen bank "occupations," the resulting media coverage, and a phone-call campaign, Hall said she finally got a representative to work with her. Last June, the representative told Hall she had found a new federal program that would give her a mortgage modification and reduce what she owed the bank by $320,000, thereby allowing her to stay in her home.
Now, Hall has more time to fight for other homeowners. "That's part of the ACCE philosophy," she said, "You get support and you support other members. It makes me feel like I'm making a difference in this world. It's like drinking a Peet's cup of coffee — shaking with natural energy. That's how I feel — just great!"
The national foreclosure rate has declined from its peak, and some reports suggest the housing crisis is over. But hundreds of East Bay homeowners face foreclosure every month. New threats to home ownership are arising in neighborhoods devastated by foreclosure. And 29 percent of California mortgage-holders are still "underwater" — owing more on their mortgages than their homes are worth on the market, according to a September report by Santa Ana data firm CoreLogic.
And, increasingly, East Bay residents facing foreclosure have turned to activist groups like ACCE to put pressure on banks and help them from losing their homes. The community activism is paying off.
Representatives from ACCE, Causa Justa/Just Cause, and the Occupy Oakland Foreclosure Defense Committee say their direct-action tactics have saved dozens of homes in the last year alone. "Just filling out requests for loan modification is not working," said Causa Justa/Just Cause Program Co-Director Dawn Phillips. "The tactics we've evolved — media, community pressure — are the only way people are saving their homes."
Oakland property owner Bill Owens is convinced his story proves that point. Owens is a karate grand master who has owned and run Cascos Martial Arts Academy on MacArthur Boulevard in Oakland for forty years. In 2006, he took out a second mortgage to repair the leaky roof and help his three sons with college costs. He agreed to pay a 12.5-percent interest rate, and was assured that he could refinance at a lower rate in three years. But by then, the loan had been sold three times, refinancing was impossible, and he was stuck with unaffordable monthly payments of $6,600.
Meanwhile, in the crashed economy, many families could no longer afford karate lessons. The final blow was the March 2009 fatal shooting of two police officers near his school. "We lost ten families that day, and it also had a ripple effect," said Owens.
Owens couldn't make the payments, and eventually the bank foreclosed on his business. He said he was "embarrassed" about what happened, so he didn't tell the students until two weeks before the sale date. When he finally announced that the school would close, however, "the students said, 'No, that's not gonna happen.' That's when I realized what community meant."
Students and ex-students organized fundraisers. One contacted ACCE, which organized a phone-call campaign to the bank and got the story on TV and in newspapers, generating a new wave of support. More students enrolled. Then-Assemblyman Sandré Swanson became involved. "They got the bank listening," Owens said.
The bank finally lowered Owens' interest rate and forgave the overdue payments. "Here was a bank about to take the building," Owens noted. "They wouldn't listen. But because of community, they totally turned around."
The resistance movement is not batting 1,000, however. "In individual cases, some we win, some we lose," said Nell Myhand, who heads the Causa Justa/Just Cause homeowner clinic, and is currently fighting foreclosure of her own house. "But we're building a movement. More people now understand that the foreclosure crisis is not because bad people took out loans they couldn't repay, but because banks targeted people, especially black and brown people, for subprime loans."
But not everyone views the pressure tactics as effective. Jim Foley, Wells Fargo Greater Bay Area Regional President, acknowledged that community groups sometimes help in "bridging the gap between customer and bank," but denied that protests affect bank actions. "We talk to any community leader who sends us the name of a customer they feel hasn't gotten a fair shot," he told me. "Whether they protest or not, we treat them the same way." Activists "barging into" banks, he said, just "terrorize our customers and our tellers."
Most of the mortgages Wells Fargo services, Foley explained, are owned by government agencies, the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). "Protests and calls are not going to make Fannie Mae change its guidelines," he said.
Some people, he pointed out, just can't afford mortgage payments. He mentioned a woman who lost her job and ran out of unemployment insurance. "Her income was $200 a month. I called her and said, 'You need to get a job. I don't have a program for $200 a month.'" Activist groups, he charged, sometimes give such people false hope that protests will prevent their eviction.
But Swanson, now Oakland's deputy mayor, believes local activists have been instrumental in helping people stay in their homes. Community-based organizations, he said, "have played a valuable role in pushing banks to be more responsive and in educating homeowners."
And, at the state level, community-based organizations have been "very persistent and aggressive in communicating the rights of homeowners and making sure they are reflected in the law," Swanson added.
A statewide coalition of community organizations including ACCE and Oakland Community Organizations (OCO) as well as policy groups, union locals, and the online Courage Campaign mounted a major push last year to get the Homeowner Bill of Rights passed. They held mass lobbying days in Sacramento, publicized information about legislators' contributions from banks, and targeted swing voters. ACCE prepared a "report card" of likely votes on the bills and reported that legislators "were calling us to say, 'Please don't list me as a 'no' vote.'"
Locally, Oakland City Councilwoman Desley Brooks, who has focused on the issue of foreclosure over the years, said grassroots organizations helped make Oakland a leader in anti-foreclosure efforts. Oakland's new Foreclosure Prevention and Mitigation Program, adopted unanimously by the council on October 16, is only the latest in a series of measures to protect neighborhoods and residents. The city's anti-foreclosure specialist, Margaretta Lin, said she often fields calls from other cities wanting to learn from Oakland's programs.
Oakland's foreclosure plan devotes city resources to increased outreach, counseling, and legal advice for struggling homeowners and tenants in buildings threatened with foreclosure. It mandates city staff to monitor implementation of the Homeowner Bill of Rights and the February 2012 state-federal "Attorney General Settlement" with the five biggest banks — and refer violations to state Attorney General Kamala Harris. According to the plan, in "challenging cases where there should have been a workout and banks didn't provide it," said Lin, city officials will "escalate" negotiations by intervening directly with the bank.
In addition, a new city database will produce quarterly reports on each bank's performance by tracking data on notices of default, foreclosures, blight mitigation, and affordable loan modifications, Lin said.
A few years ago, state and city laws requiring banks to maintain foreclosed properties weren't being implemented. So ACCE put city officials and other leaders on buses and took them on "blight tours" of bank-owned properties. "The blight tours helped put a face on the issue," Brooks said. "I heard city officials say things like, 'I finally get it.'"
That led to the development, in 2010, of a program requiring banks to register vacant properties. The city started regular inspections and imposed fines on banks that failed to clean up blighted properties.
Lin gave the anti-foreclosure movement, especially ACCE, much of the credit for Oakland's active programs. "They held the city's feet to the fire," she said. "They organized monthly meetings that kept us on track and enabled the community organizations to see how the city was changing its approach." She added, "I also give the city a lot of credit for being willing to change our approach and work collaboratively" — with community organizations, city agencies, and banks.
ACCE has been organizing against foreclosures since the crisis began. Two years ago the group joined with OCO and the Service Employees International Union Local 1021 to campaign for state anti-foreclosure laws. Around the same time, Causa Justa/Just Cause, a longstanding tenants' rights organization, opened a homeowners' clinic and focused on protecting tenants in foreclosed buildings.
A year ago, a new player emerged when activists in Occupy Oakland marched from City Hall to the West Oakland home of Gayla Newsome to help her re-occupy her house after being foreclosed on and evicted. Occupy and ACCE members took shifts as a round-the-clock guard against further eviction efforts.
Newsome, a director of the nonprofit Girls Inc. who had lived in the house for fifteen years, had taken out a second mortgage to help her daughters with college tuition. Then, in the economic downturn, Newsome said her job "went to part-time, then to zero." After she became unemployed, Newsome asked Chase to modify her primary mortgage, but negotiations dragged on.
Forced to cut somewhere, she stopped paying the smaller loan, believing that the lender, Residential Capital Mortgage Income Fund, could not legally foreclose on a secondary mortgage. But Residential Capital foreclosed anyway, evicted the family in July 2011, and sold the home to a developer.
Occupy and ACCE activists sat in Newsome's home for weeks, backed up by an online letter-writing and phone-call campaign. Supporters in San Diego visited Residential Capital headquarters and won its agreement to stop efforts to repossess the house. "They deeded the title back in June," said Newsome, "but Chase didn't give me a mortgage modification until a month ago."
Now, Newsome said, "every time I have an opportunity to help, I'll be doing that, because I know what it meant when others helped defend my home." Last week she took a shift in the "re-occupation" of the foreclosed Alameda home of Jodie Randolph, a self-employed accountant and cancer patient.
Leading the 24/7 occupation of Randolph's house is the Occupy Oakland Foreclosure Defense Committee, formed after the successful defense of Newsome's home. Occupy and ACCE activists, fellow cancer patients, neighbors, students, and other homeowners facing foreclosure are all taking shifts. "When we went in [to Randolph's house] the neighbors came out and started feeding us, thrusting $20 bills into our hands," said Occupy Oakland activist Brooke Terpstra. "Everybody feels this. Everybody knows there's no security.
"The fight is not just about Jodie," Terpstra continued. "It's an opportunity to organize the community. Her house is the base. We go out with flyers, go door-to-door, hold movie nights — to draw others out to the issue."
The Foreclosure Defense Committee is perhaps the most constructive result of the Occupy Oakland movement. But over the past year, it and other activist groups have faced a growing challenge that threatens to worsen the foreclosure crisis and force even more people out of their homes.
When banks foreclose, they face the problem of having to resell property while taking a substantial loss. But over the past few years, speculators and investors have made it easier on banks and mortgage companies by snatching up foreclosed properties, doing cosmetic repairs, and then reselling — or flipping — them. In some communities in Oakland that were hit hardest by foreclosures, "the speculators came in and bought up whole neighborhoods," Brooks said.
Forty-two percent of the 10,000-plus properties foreclosed in Oakland from 2007 to October 2011 were bought by investors rather than homeowners, according to a 2012 report by the Urban Strategies Council, a nonprofit that has closely followed Oakland's housing trends. The share of homes bought by investors has been growing, the report stated, and 93 percent of the homes purchased by investors were in lower-income flatlands neighborhoods that suffered the highest rates of foreclosure.
A "speculators ordinance" introduced last summer by Brooks and passed by the council requires investors who buy foreclosed homes to register them with the city, complete a building inspection, and bring the property up to code. The city will maintain a database of "non-owner-occupied property" and fine violators.
A new Wells Fargo policy also helps keep investors from crowding out would-be homeowners, said Oakland anti-foreclosure specialist Lin. Recently, the bank began rehabbing foreclosed homes before selling them. "Investors are hoping they can get a home at a lower price and flip it," said Wells Fargo's Foley, so they stay away from higher-priced refurbished houses. As a result, 93 percent of Wells Fargo's home sales are to owner-occupants.
Wells Fargo's "First Look" program also gives owner-occupants and community organizations first crack at buying foreclosed properties, before they're offered on the open market, Foley added. Lin said she is encouraging other banks to take steps to promote owner-occupancy.
Meanwhile, ACCE is going door-to-door in investor-owned buildings, organizing tenants. The organization also wants large-scale investors to help fund foreclosure-prevention efforts and make a percentage of their properties affordable to lower-income tenants and homebuyers.
With the state Homeowner Bill of Rights now in effect, activist organizations are also mobilizing to make sure it's enforced. "It's going to take homeowners organizing," said ACCE organizer Claire Haas. "We've been talking to a few people with sale dates in January. Those should have disappeared January 1 [because of the law against dual tracking]. If they don't, we have actions planned."
Some of the foreclosures that grassroots groups are fighting, however, may be perfectly legal. That's not the point, say some activists. There's a larger issue of social justice. "The most grievous part is that people are sitting outside homes — I'm working with two people who are in shelters now — and their homes are empty," said Myhand of Causa Justa/Just Cause. "We're not going to accept being made homeless so the One Percent can be rich."
Myhand sees the current foreclosure crisis as a continuation of housing policies that began in the 1980s. "There was disinvestment from housing and urban development, no commitment to invest in public housing, no pressure on developers to invest in affordable housing. Those of us with homes said, 'I have a home.' New Orleans tore down habitable public housing after Katrina. And we still didn't speak out. That was a signal to the One Percent: 'These people are lambs to the slaughter.' When the middle class failed to respond to things that happened to the poor, we didn't realize that when they finish with them, they move on to us."
In the last few years, however, Myhand added, "there's been a dramatic shift toward a demand for accountability from banks — for crashing the economy, for taking our homes. We attribute some of that shift to our work."