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The Dispossessed: Bayview Homeowners Fight Foreclosures 

Wednesday, May 2 2012
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Brown began missing payments. Then in early 2010, his wife was diagnosed with pancreatic cancer. He didn't want to worry her about the financial matters, so he kept the urgency of the mortgage situation to himself. He sold one of his big rigs and laid off most of his employees. With fewer drivers but higher mortgage payments, Brown gave himself more trucking shifts. The infrastructure projects spurred by the federal stimulus package, he says, opened up much-needed work for him. He spent most days on the road.

Brown was scraping together enough to meet payments, but not enough to cover the months he had missed. In November 2010, he paid American Home Financing, a foreclosure assistance service, $3,500 to help get him a loan modification. The company told him to stop paying his mortgage until a representative got back to him, he says (American Home Financing did not answer several calls from SF Weekly). This was a common piece of advice: In many cases, banks only considered modification once a homeowner proved hardship. But American Home Finance never got back to him. (The Better Business Bureau has given the company an "F" rating.) Brown missed six straight payments.

Bank of America says that around this time Brown was offered a trial modification program, where borrowers must complete three monthly payments at the modified rate before being considered for a permanent modification. The bank claims he missed the trial payments. Brown says he doesn't remember getting this offer.

He continued to seek a loan modification. Bank of America continued to decline. After all, the bank no longer owned the mortgage — like many loans, Brown's had been bundled with others and sold to investors. So the bank was looking out for the investors' interest. From that perspective, the math is simple: Usually for a bank to modify a loan, says Bank of America spokesman Rick Simon, the modification must yield the investor more profit (or less loss) than the foreclosure sale would.

"In the end, the loss taken by the investor to modify a loan, including lost interest income over the average life of a mortgage, must be less than the expected loss incurred if the loan goes to foreclosure," Simon explains.

On Sept. 6, Harborview Mortgage Loan Trust, the investment group that purchased Brown's loan from Bank of America, became the owner of Brown's deed. Two months later, the bank offered Brown $5,000 to leave the house. He considered it. "But I put too much into that house," he says, before adding with a chuckle, "How 'bout I give you $5,000 and I keep the house?"

By January the bank had put the house up for auction. The property was appraised at $252,191. In February, Brown's wife died.


Weekdays at 2 p.m. investors gather at the City Hall steps for an auction of foreclosed property. The size of the group varies, depending on the number and appeal of the day's products. On this day in April, about a dozen are in attendance. No one is willing to give a name on the record, and no one sees much financial promise in Bayview properties.

"Most people don't wanna take the risk right now," says a man in a green fleece. "Where the prices are at, you're not gonna be able to sell it for much more anytime soon."

While investors are not especially interested in the area now, many agree that it is only a matter of time before the market improves. But that uncertainty is a major drawback. Another regular on the steps, who says he has bought more than a dozen auctioned properties in each of the last two years, including one in Bayview, explains that he is hesitant to buy property there because there is no telling how long it will take for the proposed redevelopment to shoot up market values.

"The Bayview is good value if you're looking for something long-term, but the question is, how long will it take to pop?" he says. "Bayview gets less interest at the auction steps than any other district. The Bayview is hard to sell, and the profit margins aren't any better."

Historically, one reason the area hadn't drawn much interest from developers was its geographic seclusion: Highways 280 and 101 walled off the neighborhood from the north and west, and few main roadways funneled into the rest of the city. Plus, shuttered factories and shipyards had left brownfield along the Mission Bay shoreline. High crime rates scared off buyers as well.

Still, Bayview boasts some of the best weather and vistas in the city. Over the last decade, housing and retail projects have popped up around the area that many investors and Realtors see as the foundation for eventual SOMA-like redevelopment. And, to the benefit of all homeowners in the area, development tends to bring jobs, lower crime rates, and increase home values.

"Is there upside? Long-term there is some upside," says Herb Alston, a Realtor at Coldwell Banker. "In the next three to five years we're gonna see prices go up again in Bayview."

In 2007, a light rail line expanded down Third Street, Bayview's main thoroughfare. In July 2010, the Board of Supervisors tentatively approved Lennar Corporation's proposal to construct a $7 billion dollar residential and commercial complex at the old Hunters Point Naval Shipyard grounds. A month later, city hall adopted a plan for the "Bayview Hunters Point Redevelopment Area." (The proposal has not moved forward since Gov. Jerry Brown froze state redevelopment funds in December.) A library is under construction. A jazz lounge just opened.

"Where in San Francisco do you have 1,000 acres of undeveloped land?" asks Donaldson, the housing counselor. "We're sitting on a gold mine here."

For now the new buyers are still middle-income families who want to live in San Francisco but can't afford anywhere else in the city, says Jim Hurley, a Realtor with Vanguard. A majority of those families are Asian or Latino, whose combined population in Bayview has surpassed that of black people.

About The Author

Albert Samaha

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