One year after a motorcycle accident left her with a traumatic brain injury, Celeste Singh received another blow when her house was put up for auction by mortgage servicer IndyMac in the midst of negotiations for a permanent loan modification. Singh prevented the sale by filing Chapter 13 bankruptcy, only one in a string of desperate actions going back to 2009, but the Forestville resident struggles to remain in her 1930s-era home near the Russian River.
"There have been times that suicide was an option for me," says Singh. "Because would it be better to go live under a bridge?" The owner of a hair salon and a recent graduate of Santa Rosa Junior College, Singh says that she feels like a "sitting duck," just waiting for a 120-day notice of eviction to be pinned to her door.
This past May, Singh testified before a joint legislative conference committee in support of the Homeowner Bill of Rights, an act of legislation developed by the office of Attorney General Kamala Harris. Before a panel, Singh relayed her story of taking out a "predatory" loan (in her words) with IndyMac Mortgage in 2006. Payments began at $800 a month but soon ballooned to over $2,400 a month, an amount that became untenable as Singh recuperated from the accident.
Now, Singh is suing IndyMac and its owner OneWest Bank, and hopes that the case will allow her to stay in the home where she's lived and raised four sons—three are in the U.S. military—for over 10 years.
In July, Singh's effort seemed to pay off when Gov. Brown approved and signed the Homeowner Bill of Rights. Considering that between 2008 and 2011, 1 million homes in California were lost to foreclosure—with an additional 700,000 facing imminent foreclosure—there seems to be no abatement to the foreclosure crisis. Effective Jan. 1, the bill aims to end the practice of dual tracking (where mortgage servicers advance the foreclosure process while still working with homeowners to secure loan modifications) and demands the provision for a single point of contact. The law will also impose fines on any servicer found recording or filing multiple unverified or forged documents (known as "robo-signing") and allows homeowners to sue for material violations in a court of law.
Deborah Kay, who purchased her home in Guerneville in 2003, claims that dual tracking and a confusing maze of loan-modification terms have been the norm when dealing with Wells Fargo, her mortgage servicer. Wells Fargo currently controls one-third of all new U.S. mortgages, more than the seven next-largest lenders combined.
After her only daughter committed suicide in 2005, Kay fell into a psychological funk, admitting that she "minimized the financial impact" of leaving her job as a social worker to grieve. But attempts to get her loan modified to reflect her current financial situation were declined by the bank, albeit in convoluted ways. Kay says she has proof that some of her documents were robo-signed. Dual tracking came into play when a Wells Fargo representative assured her that they were working to secure a modification, just before Kay's house was put up for auction. The bank has since attempted to sell the home eight times, a process that she's staved off through a series of legal maneuvers and bankruptcy filings.
"Everywhere I turn there's nothing but bureaucratic brick walls," says Kay, sitting in the living room of her cozy, brightly painted bungalow. "In all honesty, I've lost faith in the process."
Foreclosure's effects go beyond the individuals forced from their homes. According to a report by the Alliance for Community Empowerment, in the past four years there have been 20,495 foreclosures in Sonoma County. Those result in a loss of $51,421,644 in property taxes; in addition, each foreclosed property has the potential to depress the value of neighboring homes by 0.9 percent.
C. J. Holmes, a Santa Rosa–based real estate analyst, founder of Home Owners for Justice and host of the KPFA show Stop Foreclosures, calls the foreclosure crisis a "nightmare waiting to explode." She is hopeful that that the Homeowner Bill of Rights will put sorely needed protections in place.
"It's the best we could get, for sure," says Holmes. It doesn't go as far as a Nevada bill, she points out, that threatens prison time to any bank or entity that is going to foreclose and is caught filing forged documents.
The real issue, says Holmes, is the fact that hedge fund investors are now being vetted and encouraged to buy up swaths of foreclosures for transformation to rental properties—the REO-to-Rental program presented by the Federal Housing Finance Agency last February.
"The end result will be that those hedge funds will be kingmakers in those markets," says Holmes.
Tim Nonn, a Petaluma resident who lost his home two years ago, has been active in the Occupy movement to stop foreclosures. But he calls the Homeowner Bill of Rights a "sham."
"It doesn't slow down or stop illegal foreclosures," says Nonn. "It doesn't hold the banks accountable for their crimes."
Nonn says that the Occupy movement is shifting strategies, focusing less on going after the banks that so far aren't being prosecuted and more on finding creative solutions.
"Protesting at the banks presupposes there's a justice system that's going to hold the criminals responsible," he explains. "The energy now is around building strong relations with local governments to save our homes and communities."
Pay attention to recent news, and Nonn's claims hold merit. In mid-August, U.S. Attorney General Eric Holder decided not to prosecute Goldman Sachs for its prime role in America's financial crisis, despite a senatorial criminal investigation's findings of abuse and poor oversight.
But people like Celeste Singh aren't being bailed out or given pardon from their ongoing tribulations. Her credit destroyed by the foreclosure process, Singh says she doesn't have many options left.
"It's the big unknown, the big, gray, dark unknown for us," says Singh. "I'm really hopeful with these laws that got set into place. I'm hoping that someway, somehow I'll be protected."