On a clear, unseasonably warm day in early February, Tanya Dennis led about 30 people in a demonstration outside of a bank branch in Oakland, Calif. Dennis and the group were there in support of 77-year-old Katie Mitchell and her family, who had entered the bank minutes before to request a modification of her home loan.
Dennis hadn’t planned to be an advocate or an inspiration for San Francisco Bay Area homeowners facing foreclosure, nor did she want to be one a year ago.
Dennis’ experience fighting foreclosure would thrust her into the media spotlight, and lead others to follow her example. Her story illustrates some of the complexities of the current foreclosure climate and illuminates a trend by a subset of homeowners facing foreclosure who choose a proactive approach in negotiating a home loan modification.
On Jan. 18, 2011, Dennis, 64, broke into her then-empty South Berkeley home from which she, her daughter, her son, his girlfriend and several of her grandchildren — three adults and five children in all — had been evicted on Dec. 7, 2010, and reoccupied it. In the intervening month and a half, the bank had paid contractors to clear out the home’s furnishings.
"I just knew I was right," Dennis said of her family’s move to reclaim the home.
Tanya Dennis stands in front of the South Berkeley, Calif., home she reoccupied after her eviction in 2010. Photo by Paul Hagey, Inman News. Copyright 2012
In early 2011, Dennis was ahead of the wave that would peak with an Occupy movement offshoot, "Occupy Our Homes." Its participants, including foreclosed-upon homeowners, their friends, neighbors and sometimes strangers, work to put pressure on banks to modify their loans and avoid foreclosure.
The movement entered the national spotlight late last year when a Minnesota woman facing foreclosure, Monique White, on a whim, asked some members of the local Occupy movement to stand with her to avoid eviction.
The movement grew, and on Dec. 6, 2011, hundreds of people, united by their experiences with foreclosure or perceived injustice, participated in a national day of action and supported the occupation of homes by their owners or former owners across the country.
Oakland’s seminotorious Occupy movement has dabbled in various forms of housing-related demonstrations, occupying vacant lots near the downtown area, camping in tree houses in City Hall Plaza, and even temporarily occupying a downtown-bordering lake in a homemade houseboat.
The boat featured a small front porch and a large, black-painted wall that displayed, in large, white letters: "3.5 million homeless, 125 million vacant homes in America today. Why won’t you let us in?"
The Occupy Oakland movement has also attempted to occupy foreclosed and vacant properties, which has led to arrests. In some cases these efforts do not involve the homeowner or former homeowner.
Though she said she’s cautious about collaborating with the Occupy movement because of its perceived "anarchic" character, Dennis, in more thoughtful, calculated ways, embodies the movement’s well-publicized restlessness.
A little over a year ago, Dennis, who has been an educator in the Oakland Unified School District for 30 years, including two years as vice principal of Oakland’s Castlemont High School, would have sought to avoid the perceived stigma of a foreclosed-upon homeowner.
Dennis said she was at first ashamed to have experienced foreclosure.
"That’s what the banks count on," said Dennis, "for you to be ashamed and embarrassed.
"I sat up one night and thought, ‘Am I going to keep my pride or am I going to keep my house?’ " She decided to keep her house, which didn’t lead to, after all, a loss of dignity.
That unforeseen dignity has grown into an activism-infused philanthropy. Dennis has inspired dozens of homeowners facing eviction in the San Francisco Bay Area to more forcibly approach banks for loan modifications.
And she’s personally helped guide about 10 homeowners through the process. Three of those she’s helped, she said, have received permanent loan modifications. The others are still in negotiation with their banks.
In January, she became the unpaid chairperson of the Alliance of Californians for Community Empowerment (ACCE) Oakland Home Defenders League.
ACCE, founded in 2010 as an offshoot of ACORN (Association of Community Organizations for Reform Now), is a member of New Bottom Line, a network of 35 grassroots organizations in 17 U.S. states focused on advocating for financial equality.
On that early February day at the demonstration in front of a bank branch, Dennis had planned for the group to enter the bank with the Mitchells, but branch officials stopped them at the door.
The Mitchells had requested a loan modification before, but those requests went unanswered, said Dennis, so this more forceful action, of showing up unannounced with supporters, was intended to put pressure on the bank to negotiate.
Mitchell and her supporters discovered that day that her loan, in fact, wasn’t serviced by the bank where the protest took place, and had been acquired by another bank, said Dennis.
So, a week later Dennis helped organize about 50 people to move on to downtown Oakland’s branch of Union Bank to help the Mitchells secure a loan modification. This time, supporters made it inside the bank as Mitchell and her family met with the branch manager to discuss a modification (see a video of the bank visit here).
The status of Mitchell’s loan and its modification is currently pending, said Dennis.
Underwater and over it
As of last fall, according to real estate data analysis company CoreLogic, an estimated 25 percent of all U.S. homeowners were underwater on their home loans — owing more than their houses were worth. Being underwater doesn’t necessarily lead to foreclosure, obviously, but it’s a contributor, along with the dragging economy.
Some of these underwater homeowners are choosing to pursue a short sale — sell the homes for less than the amount they owe on them — to get their heads above water and move on. Short sales can offer banks a speedier and cheaper alternative to foreclosure.
Nationwide, there are an estimated 1.35 million homes in foreclosure, according to RealtyTrac data as of April 3. There were a record-high 2.9 million foreclosures in 2010 and a million less (1.9 million) in 2011 — however, that number is expected to climb back up in 2012.
Fueling the expected uptick are the backlog of foreclosed homes stuck in robo-signing litigation limbo, which will shoot foreclosure numbers up as they are processed in the wake of the recent $26 billion multistate settlement between the states’ attorneys general and the nation’s five largest mortgage servicers: Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial.
Under the settlement, Bank of America is to earmark $7.6 billion, of a total $11.8 billion it is to pay, in help for borrowers, including the reduction of some loan principals. Wells Fargo will pay $5.3 billion in the settlement, $3.4 billion of which will go to first- and second-mortgage loan modifications, including principal reductions.
The Obama administration’s Home Affordable Modification Program (HAMP), which launched in 2009 and aims to help eligible, struggling homeowners stay in their homes and avoid foreclosure, has assisted in about 950,000 permanent first-lien home loan modifications since its inception.
While programs like this one can help homeowners, so far they have been accessible by too few homeowners, said Dennis, who advocates that what really needs to be done is for banks to engage in across-the-board reductions of loan principals for struggling homeowners.
For example, the investigative news website ProPublica has found that HAMP has not led to an appreciable increase in the rate of modifications and helps only a small fraction of homeowners who need help.
Anatomy of a foreclosure
Details of each foreclosure are, of course, unique. But as with millions of families nationwide, the wounded economy took its toll on Dennis and her family, leading to the eventual foreclosure of their 2,300-square-foot South Berkeley home.
Dennis’ father had purchased the home in 1963 for her grandmother, and Dennis inherited the home upon her grandmother’s death, in 1994.
Over a period of years beginning in 1994, Dennis applied to World Savings Bank for several home equity line of credit (HELOC) loans, which eventually climbed to a total of $408,000. She took another loan out from the same bank in 2001 for $27,000.
Dennis used some of that money to renovate the 1919-built Berkeley home. The renovations included a 300-square-foot addition, hot tub, central heating, 17-foot-high redwood fencing, and wrought-iron gates featuring the Chinese character for happiness.
The online real estate marketing website Zillow shows that the home’s estimated value peaked in August 2006 at $603,000 and reached a 10-year nadir in December 2008 at $359,000. As of April 2012, its value had climbed to $390,000.
As Dennis, and many others, said of the easy money days before the housing crash, "If you fogged a mirror, you could get a loan." She took out at least one subprime loan with an adjustable interest rate — known as a "pick-a-pay" loan. That loan carried a maximum annual interest rate of 12.95 percent, a minimum rate of 3.25 percent, and an initial rate of 8.02 percent.
"Pick-a-pay" loans are a type of adjustable-rate mortgage, where the interest rate changes over time according to periodic recalibration with a tracked index.
They can be very risky, because if a borrower makes a payment that falls below the minimum payment plus that month’s interest, the balance is added to the principal and the interest rate applies to that new total. In this way, principals can balloon.
In the twilight of the housing market’s bubble days, which peaked and began to fade in 2005-06, banks were awarding a wide assortment of high-risk mortgage products, including HELOCs, to borrowers who in today’s environment would not be eligible to receive them.
In some cases, the loans came with less-than-favorable terms, like higher fees and escalating interest rates. Race also seems to have been a factor. Bank of America, on behalf of its subsidiary Countrywide, settled a $335 million discrimination suit, brought by the Obama administration, in December 2011. The suit charged Countrywide with having given 200,000 blacks and Latinos higher interest rates than whites with similar loan application stats.
The share of subprime mortgages, at the time, had jumped more than 100 percent of their typical rate to about 21 percent of all loans originated, according to Harvard University’s 2008 State of the Nation’s Housing report.
Many homeowners were refinancing to cash in on their home’s rising values, which we now know were severely bloated, and the banks, and investors, were cashing in on all of the new risky loans.
This Wild West of loose lending created a massive bundle of high-risk borrowers who, when home values began to plummet, couldn’t find buyers for their homes and — when their interest rates began to rise — couldn’t sustain their monthly payments. The "house of cards" began to collapse.
Dennis’ delinquency ran much deeper than rising interest rates on subprime loans, however.
Deeper than subprime
Her foreclosure was tied not only to subprime loans, but also to direct losses with respect to the market downturn and crashing home values.
She and her family incurred heavy losses on seven new homes they had purchased in Arizona as investments. The money for the large investment came from the sale of two Berkeley properties her father, a builder, had constructed years earlier.
As a result of the housing crash, the Arizona homes’ values fell from $300,000 to $160,000, said Dennis. Her health was suffering, too.
She had experienced a flare-up of Crohn’s disease, induced by the stress of losing an expected $2.3 million return on the Arizona investment and her ruined plan to buy property in Costa Rica. Her dream was to build a home in those tropics and retire in paradise.
The Crohn’s disease left her bedridden for 18 months and she missed that many months of payments on her HELOC loans tied to the Berkeley home.
Pièce de résistance
After reoccupying her home on Jan. 18, 2011, a California Superior Court judge denied Dennis’ illegal foreclosure claim on Feb. 9, 2011, and she received a sheriff’s writ of possession stating that she must leave the house by Friday, Feb. 24, 2011, said Dennis.
As Dennis tells it, there was some divine intervention in her fight to modify her loan and neutralize foreclosure.
The week before what would be her second eviction from the home, she came across an ACCE-led home-defending demonstration in East Oakland and approached its participants.
When Dennis contacted ACCE later that day, Claire Haas, an ACCE organizer, asked, "Do you want us to stand with you?"
Dennis said yes, and ACCE helped her draft a press release that summarized her story and intention to demand a loan modification.
The release was sent to more than 200 news outlets just a few days before she was due out of the house, said Dennis. At around 8 a.m. the day after the release was sent out, Dennis called a loan representative at Wells Fargo (that bank had acquired World Savings Bank via the Wachovia acquisition in 2008) to ask for a loan modification.
The answer was no, said Dennis, as it had been many times before.
At around noon that Wednesday, local TV affiliates of CBS, NBC and other media outlets began calling her.
Just as the story was becoming a flashpoint in the local news cycle, Dennis said she received a call at 12:30 p.m. that day from a Wells Fargo national vice president, who asked, remembers Dennis, "Would you be willing to work with us?"
A Wells Fargo spokeswoman acknowledged that the bank was working with Dennis, but did not provide additional comment.
The foreclosure, said Dennis, was suspended for Dennis and Wells Fargo to pursue a loan modification. But the negotiations went cold in May, she said. At that time, Dennis was launching her advocacy work for other homeowners facing foreclosures by disrupting a bank shareholders meeting on May 4, 2011, in San Francisco.
After that, Dennis said, negotiations halted and she received another writ of possession stating a date, about two weeks later, for her to be out of the house.
This time, it wasn’t media publicity directly that pushed the bank’s hand, said Dennis, but the ACCE network.
After the bank was out of contact for a couple of weeks, Dennis engaged ACCE, which organized about 1,500 emails and more than 100 phone calls to her contact at Wells Fargo. Dennis received a callback the next morning, she said, and negotiations began again.
The negotiations eventually led to a permanent loan modification, which became official in November 2011, said Dennis. The bank agreed to modify Dennis’ loans. The loan mods included, according to Dennis, a $100,000 reduction in principal on the first loan (the original amount was $408,000), elimination of the second loan, and a 1 percent interest rate for three years, fixed at 5 percent at the fifth year.
Part of the reason Wells Fargo granted such a generous modification, said Dennis, is that she had received a pick-a-pay loan, one of highest-risk, most criticized loans banks made during the housing market boom.
Wells Fargo, in fact, agreed to a $2 billion settlement on Dec. 20, 2010, with the California attorney general related to such exotic loans.
The settlement stipulated that 14,900 Wells Fargo "pick-a-pay" loan recipients receive principal reductions as part of their loan modification packages and earmarked $32 million in payouts to 12,000 borrowers who lost their homes and had pick-a-pay loans.
Regardless, said Dennis, the only reason she received a modification in the first place is because of community support. She had already "lost" the house, until she decided to break in and reoccupy it. "There’s power in numbers," she said. Currently, her son and his family live in the house and Dennis lives in the Oakland Hills with her 91-year-old mother, whom she helps care for.
Each Monday, Dennis calls the people she’s assisting — there are about 10 she’s working with now — to help them formulate an action plan in contesting foreclosure and in finding resolution to their housing dilemmas.
Strategy is dictated by how negotiations are going. Sometimes, a bank-visit action is needed, as in Katie Mitchell’s case; sometimes an actual home occupation is called for; and sometimes people just need some perspective on the legal process.
There are those cases in which Dennis hasn’t helped people directly, but her story has prompted them to emulate her fight.
San Francisco resident Vivian Thompson and West Oakland homeowner Gayla Newsome, for example, were inspired by Dennis to be aggressive in their request for a loan modification.
Vivian Thompson faced eviction from her home in San Francisco’s Bayview neighborhood in April 2011. "I thought, ‘If she can do it, so can I,’ " said Thompson of Dennis’ story.
So, Thompson planned a day of action with the help of a local union group and ACCE. On Nov. 4, 2011, Thompson and her supporters bombarded the bank with about 1,400 emails and several hundred phone calls in the span of a couple of hours. The bank responded, said Thompson.
She is participating in the HAMP program and the bank has rescinded the foreclosure sale, she said. Thompson is currently working with the bank to reduce the loan’s principal.
In the East Bay, closer to Dennis’ actions, an Alameda County sheriff evicted two of Gayla Newsome‘s daughters — one college-aged, the other 14 — in mid-July 2011 from their West Oakland home while Newsome was at work in San Jose, Calif.
"We were on the corner with pajamas and suitcases," said Maiya Edgerly, who, with her sister, was given two minutes to get their stuff and get out of the house.
Edgerly said that when her mother learned of Dennis’ story in September 2011, the family planned to reclaim their home. In December 2011 they re-entered their home and put pressure on the bank to modify their loan.
They’re now in the process of negotiating with the bank on a loan modification.
CORRECTION: The original version of this article contained errors and has been updated with corrections. Three adults and five children had been evicted from Tanya Dennis’ home on Dec. 7, 2010.