The foreclosure crisis is in its fifth year since the peak of the housing market in 2007.  In the wake of the destruction, a full 25% of all Americans find their homes underwater and millions are behind on payments and facing foreclosure.  Many of the foreclosures are people who simply bought more home than they could afford, but far too many are innocent victims of predatory loans and banking practices that were thrust upon them.  Nowhere is this more evident in poor, minority communities where whole city blocks are falling to the banks through repossession.

A February 2012 study prepared by San Francisco Assessor-Recorder Phil Ting is one of the first reports to quantitatively show the scale of the mortgage and foreclosure fraud problem.  In a sampling of 384 of the over 2,000 foreclosures in San Francisco, 84% of the foreclosures were found to have at least one violation of California Foreclosure law.  Many of the foreclosures had violations of at least 3 of the 6 major foreclosure statutes.  This widespread violation of law in the foreclosure process has gone largely unreported during the housing crisis, as Mr. Ting’s study is the first by a local government official to document the specifics of foreclosure fraud in his city.

The full level of nationwide corruption in the real estate banking system remains to be uncovered, but the devastation on the landscape of many cities like San Francisco is painfully apparent.  Whole neighborhoods are being destroyed by foreclosure and many of these neighborhoods are lower income, with the victims being minorities and the elderly. 

In a recent article in the San Francisco Bay View one resident of Bayview Hunters Point cited how eleven homes on her block alone were facing foreclosure.  Her block is unfortunately not atypical of several in that part of the city.  

RealtyTrak, a website for foreclosure listings, claims that more than 1,400 homes in the 94124 ZIP code – Bayview Hunters Point – will be foreclosed by 2012.

The foreclosure crisis has forced a whole set of long-standing African American individuals and families to leave.  This exodus comes on the heels of a 30-year surge in home prices in San Francisco that forced many lower income African Americans out of the city.   This housing boom-bust cycle has resulted in the dwindling of African Americans in the San Francisco neighborhoods from 13.4% in 1970 to about 3.9% in 2011, with many of the people displaced  being poor or elderly.  These poor and elderly residents have become the easy targets of foreclosure as many are either not aware of the fraud perpetrated against them or are unable to fight the system even if they are aware that they have been discriminated against.

For those that find themselves facing foreclosure there are some things that you can do to fight back.  Firstly there are many organizations and occupy protests that you can participate in to let your voice be heard.  Secondly, if you have already been getting letters from the bank threatening foreclosure you can challenge the validity of the procedure.  Ask the bank to produce your loan documents and show you that they indeed hold your loan.  Many recent home loans have been chopped up and sold to other institutions and there no longer is a single holder of the mortgage.  Taking the time to “find” your mortgage may give you months of time to get your finances in order and/or find a new place to live.

The third thing you can do is ask the bank if you can refinance.  The refinance process is painfully slow as there are so many foreclosures currently in the pipeline.  The back and forth cycle of submitting and reviewing documents could give you several mortgage-free months while you either wait for approval of the refinance or are ultimately rejected.  Either way you will have bought yourself several months without mortgage payments, which may allow you to save some money and get your financial affairs in order.

Note: The recent settlement between the Obama Administration and the banks may provide a few thousand dollars of relief.  This is a paltry sum for someone who was fraudulently forced out of their home, but it is money that you may be entitled to so you should go get it.  Click here to find out more.