Sacramento Valley Mirror, News Feature, Tess Townsend, Posted: Aug 01, 2011

WILLOWS. Calif. -- Glenn County Sheriff's Deputy Mike Hamilton peers into the window of the house at 632 Greenwood Lane in Willows.

"Looks empty to me, unless my eyes are playing tricks on me," he says.

It is normally Hamilton's job to post eviction notices on houses and to perform the lockouts that follow a week later. But on this morning in mid-June, he says a lockout may not be necessary. The residents are gone.

The house at which Hamilton was posting did not house people who had neglected to pay rent, but people who had fallen behind in their mortgage. The foreclosed property now belongs to Deutsche Bank.

According to RealtyTrac, an online database of foreclosed properties, one of every 247 housing units in Glenn County received a foreclosure notice or notice of default in May, compared to one of every 605 nationwide. In California, the rate was one out of 259.

Glenn County's foreclosure rate is not much worse than California's average, but the mortgage crisis has had a greater impact in the small farming community than in other parts of the state. According to Housing and Urban Development counselor Dan Beverage in Chico, the county's low population and lack of employment opportunities, even when not in a recession, are to blame. Glenn County's unemployment rate was 15.2 percent in May, compared to 11.7 percent on average statewide that month.

Beverage says home sales in Glenn County relating to foreclosures drive home prices there more than other factors. Unlike in Chico and other more prosperous places, he explains, Glenn County does not have leverage against foreclosed home prices, such as parents of college students investing in property or wealthy Bay Area transplants buying homes.

"They probably feel it is worse because it's small," Beverage says of Glenn County. "With the smaller communities, we have fewer resources."

As Hamilton drives away from the house on Greenwood Lane, he says that, when he can, he likes to talk to people in person about the items he posts so he can explain the content. He is gentle with those who lose their homes, having posted notices on many doors and having watched countless post-foreclosure unlawful detainer, or eviction, cases in court over the past few years.

"It's a sad thing to see," he says of the influx of foreclosed homes in Glenn County.

Glenn County, like the rest of the nation, saw the number of foreclosures take its first big jump in 2007. According to data from the Glenn County Recorder's Office, 59 homes were signed over to new owners that year, almost all of them to banks, as a result of delinquent loans, compared to eight homes in 2006. The number climbed to 118 in 2008 and 156 in 2009, then dropped a bit in 2010 to 119 homes.

This year, 52 foreclosures had been completed by the beginning of June.

The high volume of foreclosures has forced many out of their homes, but has also driven down home prices for those not in foreclosure. Willows-based realtor RaeAnne Titus of Titus Properties says that a house worth more than $200,000 in 2006 may be worth as little as between $60,000 and $90,000 now.

The depressed prices affect homeowners wanting to sell, and also realtors like Titus, whose salaries are partly based on commissions from selling homes. "I'm still probably selling as many houses, but we're just making 40 percent less," she said.

She said close to 75 percent of her current clients are investors, as opposed to people looking to live in the houses they purchase.

Titus says that one thing that has saved her home-selling business is her work as a property manager. With so many people in foreclosure, she says, the number of people looking to rent has ballooned.

Aside from rentals, almost every other part of the local economy has been slammed, according to both Titus and Rick Thomas, who owns Glenn County Title Company. The two listed a chain of industries affected: builders, title companies, home inspectors, lenders and loan officers, home warranty companies — the list goes on.

Titus said that even advertising revenues have decreased because realtors don't have the funds to spend on putting themselves out there.

The economic impacts of foreclosures are far reaching, but the most intimately impacted parties are still those who lose face because of the foreclosure of their homes. Many of the Glenn County residents who have faced foreclosure have surrendered quickly; a few have fought foreclosure in court, and a very few have succeeded in modifying their loans.

The Rincons
The American Dream was just too expensive for this Orland family.

Farm laborers Francisco Rincon, 42, and Maria Rincon, 40, spent years saving bits and pieces of their combined monthly income of $2,000 for the $50,000 down payment on their first home, which they purchased in 2006.

A year ago, the married couple received a notice of default on their $165,000 mortgage. They were $5,435 behind in payments.

Sitting in the impeccably clean living room of a house he now rents, Francisco said he defaulted because the monthly payments of $1,400 a month were more than the family could afford.

The eldest of his five children, 18-year-old Gladys, translated his story because Francisco speaks only Spanish. She was the primary respondent to the foreclosure notices when they started to roll in. She translated for her parents when on the phone with their lender, OneWest Bank.

"I had no idea about houses, about foreclosures and stuff," she said.

Gladys said her parents were responsible with their money and had always made payments on time — usually ahead of time. When they started to struggle to make payments on the mortgage, they called the bank to find out if there was anything they could do.

The lender told her that her family could pay just interest on the loan for a time at $950 a month, even though they would not be paying on the principal.

Meanwhile, the value of the house had declined dramatically, she said, from $205,000 to about $80,000. Then, after her parents went into default, her paternal grandfather fell ill and Francisco went to Mexico for part of the summer to care for him. While there, he had no income and covered the cost of his father's medications.

Gladys said her father realized the mortgage situation was hopeless. "He's like, ‘It's not worth paying it no more,'" she said.

For her family, the house had been a dream. Before her parents purchased it, they had always rented. Her father had poured his energy into the house, fixing the roof and manicuring the lawn. She said he invested $20,000 in home improvements.

The house was sold at auction in October. In December, Glenn County Superior Court informed the family that they had to leave the premises.

The family now rents from Francisco's boss for $800 a month. The rented house is slightly larger than the family's previous residence, but that doesn't compensate for the Rincons' loss of their dream of becoming homeowners.

Sarina Nelson
Sarina Nelson, 42, of Hamilton City went into foreclosure in 2009. She recently filed a lawsuit against Deutsche Bank, which purchased her home at auction.

Nelson has alleged that Deutsche Bank did not follow proper processes to purchase her home and that Indymac Bank, her lender, did not follow proper procedures to foreclose on her.

Nelson went into foreclosure after her fiancé, who was helping her make loan payments, died. She attempted to modify her loan and has said that Indymac gave her the impression her loan would be modified. However, as banks frequently do, Indymac foreclosed on Nelson before notifying her that she would not receive a loan modification.

While Nelson's lawsuit is pending, she is paying rent to Deutsche Bank to stay in her home. Glenn County Commissioner Jerri Hamlin has ordered a restraining order against the bank, but Nelson's relatives say people who claim to be " from the bank" have trespassed onto her property to take pictures.

HUD counselor Beverage has been able to help a few Glenn County residents modify their loans and stay in their homes.

But Beverage said loan modifications are rarely granted. He said his success rate with his clients is about 30 percent, and those who attempt to modify their loans on their own are seven times less likely to succeed than those who use the free services offered by HUD.

This story package was originally published by the Sacramento Valley Mirror. Read Tess Townsend's sidebar providing guidelines on responding to foreclosure action here. Townsend is a UC Berkeley journalism major who recently completed a five-month internship at the Mirror. Contact her via chicosol@sbcglobal.net