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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."