The perception among many is that homeowners facing foreclosure are themselves to blame for their problems.
They refinanced their homes, using equity to go on expensive vacations or remodel their houses. Or they purchased homes with adjustable rates, not realizing these could change at any moment, the thinking goes.
Fifty-one-year-old Petaluma homeowner Wendy Booth doesn’t fit into any of these categories.
Booth had a good paying a job as an account representative at a local title company and in 2004 bought a cute three-bedroom bungalow off Western Avenue. The terms of the purchase: a fixed 5 percent rate over 30 years.
But after being laid off in 2008, just as the housing market was starting to implode, Booth found herself unable to make payments and unable to sell her home.
“It was the little cottage I had seen in my dreams, it was a place I would raise my son, where I would grow old in…and a solid investment and I felt I couldn’t go wrong,” Booth said Tuesday at an small press conference outside her home. The event was organized by members of Occupy Petaluma and part of the national “Occupy Our Homes” campaign meant to bring attention to the foreclosure crisis.
Booth, who lives with her 17-year-old son, said that she became desperate to keep her home, even dipping into her 401K plan to make the payments. She finally found a job in 2010—selling Strauss Creamery products at local farmers markets—but the job paid significantly less than her previous one.
So Booth contacted her lender, Citibank, in hopes of working out a deal. She had a job, she was making payments, but she just needed a little help.
Since then, she was spent countless hours on the phone trying to obtain a modification, only to be continuously denied. During her first attempt she was told that she needed to make at least $4,500 a month in order to qualify for a reduction, an answer Booth says defies logic since if she had the money she wouldn’t be asking for a modification in the first place.
Then she was told to apply for the Home Affordable Refinance Program, a federal program designed to help homeowners stay in their homes. She was denied. The reason? She didn’t have enough equity, the agent told her.
“This process has been the most dehumanizing, stressful, degrading thing I have ever endured,” Booth said. “I know my way around mortgage terms and lingo. This should have been easy for me, but it wasn’t. Because the system is without logic and it simply boggled my mind.”
Booth was so desperate she even hired a private mortgage modifier to help her deal with the bank and who recently filed a claim with the Office of the Controller of Currency to protest the way her bank has been treating her.
Now Booth is clinging to hope. She says her neighbors have rallied around her since she lost her job, helping her plant a garden that she uses to save on grocery bills and taking her son camping. A local farmer even told her she could continue receiving her weekly produce box if she chipped in at the farm.
Booth is one of an estimated 400 homes in Petaluma that are either in pre-foreclosure, meaning they’ve defaulted on their payments, are scheduled for sale or already bank owned, according to Foreclosure Radar, a site that monitors foreclosures around the country.
Many have been hesitant to come forward, feeling shame and embarrassment. Booth says she feels neither. “It wasn’t my fault,” she says defiantly. “I did nothing wrong.”
The Occupy Petaluma group has made the foreclosure crisis one of their core issues and have pushed for a nationwide moratorium on foreclosures over the holidays. They recently began contacting homeowners at risk of losing their homes to counsel them on what to do and plan on holding a foreclosure prevention workshop and conference Dec. 18 at St. Vincent de Paul Church. (There is also one scheduled for tonight at the church.)
On Monday night, the group spoke at City Council pushing them to send a letter to Attorney General Kamala Harris asking her to prosecute banks for alleged fraudulent activity, including robo-signing, a practice in which banks signed foreclosure documents and affidavits without reviewing the information contained in them.
Today the activists got a part of their wish when Harris announced the formation of a joint investigation alliance between her office and the Nevada Attorney General. The group will share litigation strategies, information and assist each other in prosecuting lenders.
Tim Nonn, a member of Occupy Petaluma who himself lost his home to foreclosure a year and a half ago, called today's announcement a major victory.
"The banks were hoping that people would think this was fault of the homeowners, but as Kamala pointed out this is a man-made disaster, created by lenders," said Nonn, who is an author and activist. "Banks say they can’t do anything, but the truth is they can do a lot. You start pulling on pieces of yarn and the whole sweater will unravel."
What do you think about today's announcement by Attorney General Kamala Harris? Will she able to prosecute both local and national banks? Share your thoughts in the comments.