A small neighborhood in San Francisco, California has come together to save neighbors’ homes from the foreclosures happening all over our country.  Bernal Heights neighbors have joined together in Occupy Bernal Heights.  88 houses in this neighborhood with a population of 25,000 have been indentified as being in danger of foreclosure.  Members of Occupy Bernal have been going door to door to these houses offering assistance for people who are faced with losing their homes.   There are counselors available through various HUD and other housing agencies in San Francisco.  Then there is the support from neighbors, which has proved invaluable.

Many of these houses have mortgages with Wells Fargo Bank.  Members of Occupy Bernal,  including  homeowners at risk of losing their homes, have been in negotiation with elected officials and Wells Fargo executives.  Up to this date, two housing auctions have been postponed due to community  pressure.  This will enable time for loans to be renegotiated and people to stay in their homes.

We are developing strategies to help our neighbors negotiate with the banks.  Elected officials contacted by neighbors have been helping people meet with bank executives to negotiate.  Banks are reporting record profits in this time of financial trouble, and there are ways to make them accountable to the people who have trusted them for their mortgages.

Here are some guidelines for helping neighbors facing default or foreclosure:

1. Identify neighbors either in foreclosure or in default, the step immediately preceding foreclosure.  Default means that people have fallen  behind on their mortgage payments,  their property taxes, or insurance.

2. Contact HUD certified Foreclosure counselors in your county.  These are found on HUD websites.  Find out their availability for people.

3. Contact the foreclosee/defaultee. Tell them you are neighbors concerned about the impact of the foreclosure on the community.  You are not experts on the issue, but know of some experts who would assist them if they want your help.  Emphasize that you want to work with them to help them keep their homes, and preserve your community.

4. Connect them with a HUD certified foreclosure counselor.  The counselor can assist them in negotiations with the lender at any point in the process if they sign a third party authorization” form, available from the counselor, permitting them to contact the lender on the borrower’s behalf.

5. Neighbors, with the permission of the homeowner, could help get local media coverage of the situation.

6. Neighbors can also contact a local lender official and request a meeting.

7. Local elected officials can be contacted on the behalf of the homeowner, if they agree to help support their fight to stay in their home.

Here’s a short explanation of the foreclosure process and some information about predatory loans.  The process of default or foreclosure begins  when a homeowner  is unable to pay his/her mortgage or taxes.

a. The lender can then call for them to pay all past charges, – including any balloon payments or deferred interest.
b. If they don’t pay, the lender can place them in foreclosure.
c. Foreclosure can lead to the lender selling their property at a public auction.
d. If someone buys the property, the new owner can move to evict them.

Why are so many people in foreclosure or default?  In our economy, with so many people out of work, people are falling behind on payments for their homes. Another reason is the predatory loans which some banks have been issuing to people.  Predatory loans are often marketed to the vulnerable, people with poor credit or the inability to refinance under more favorable terms.  Such loans often permit the borrower to pay only a portion of the interest on the loan for a period of time, – say only 1% on a 6% loan for 3 to 5 years.  Then, after that period, all of that deferred interest can be called in by the lender, often resulting in default followed by foreclosure, auction sale and eviction.  This is just a short statement about a larger problem.