The Great American Foreclosure Story: The Struggle for Justice and a Place to Call Home
The story of how one woman went from a three-bedroom home to a tent is the story of how America ended up in a foreclosure crisis that still drags down the economy.
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Sheila Ramos' grandsons, 10 and 13, started crying. They wanted to know where the house was. There wasn't one. There was only a tent.
They had flown from Florida, after Ramos had fallen hopelessly behind on the mortgage for her three-bedroom home, to this family-owned patch of rural land on Hawaii's Big Island. There, on a July night in 2009, they pitched a tent and, with no electricity, started a new life.
If Ramos were in her 20s, living off the land might be a marvelous adventure. Hawaii is beautiful, and the weather is mild. In the nearly three years since she moved here, her family has built a semi-permanent tent encampment, and they now have electricity. But it's not how this 58-year-old grandmother, who has custody of her three grandchildren, imagined spending her retirement after working for more than 30 years — nine running her own businesses. She regularly scours the local dump and recycling center for items she can salvage.
The story of how she ended up in a tent is the story of how America ended up in a foreclosure crisis that has not ended, that still drags down the economy and threatens to force millions of families from their homes. Already, banks have foreclosed on more than 4 million homes since the crisis began in 2007. With almost 6 million loans still in danger of foreclosure, 2012 could very well be the worst year yet. Ramos' story is remarkable not because it's unique but because it isn't.
Her story doesn't fit any of the conventional narratives. Ramos is not a helpless victim. She made mistakes. But she didn't take out her mortgages to splurge on luxuries or build a new wing for her house. She took out her first mortgage to live the free-market dream of starting her own business. She took out later mortgages to cope with injuries sustained in a car accident.
Every step of the way, from her first subprime loan to foreclosure, her downfall was abetted by a mortgage industry so profit-driven and disconnected from homeowners that the common interests once linking lender and borrower have been severed. The lending arms of the nation's largest financial institutions helped plunge the country into crisis through their abuses and blunders, and they responded to that crisis with still more abuses and blunders — this time in how they handled people facing foreclosure. For subprime borrowers like Ramos, it has been as hard to work their way out of trouble as it was easy for them to get the loans that started their downfall. The millions of prime borrowers who thought they were doing everything right, only to be caught in a historic wave of unemployment, have been forced to endure a similar gauntlet of delays, errors and traps.
The industry developed tactics of dubious legality — not just robo-signing, which most Americans have heard of by now, but an array of business practices, some dating to the 1990s, that were designed to skirt the law and fatten profits. The federal and state governments largely tolerated these practices until they pushed Ramos into a tent and all of us into the Great Recession.
Even then, the federal government, facing an electorate bitterly divided over how and even whether to help "irresponsible" homeowners, responded in ways that proved ineffective. To be sure, the government's efforts were unprecedented, as Obama administration officials have repeatedly insisted. But those efforts were also halfhearted. Only recently, after the banks admitted to widespread law-breaking, did the government launch a response that might prove commensurate with the calamity.
This grandmother's story — outrageous and complex — is our story, the American foreclosure story.
Living the American dream
Born Sheila Ferguson, Ramos was one of seven children. The family lived in the small town of Haiku on the island of Maui, where her father did maintenance work at state parks. At 17, she married a man she'd met in high school, dropped out of school and had two sons, but divorced when she was just 19. She kept his surname, Ramos, but wanted a new life. Maui suddenly seemed small and confining, and she wanted "to get off the rock," as she puts it. So she took her two sons, aged 2 and 3, and left for Alaska.
She lived in Anchorage for three decades, building a life with her current partner, David Backus. After getting her GED and an associate's degree in cosmetology, she worked in various salons for several years, doing women's hair and giving facials. From there, she jumped to selling cosmetics in department stores, eventually working her way up to a managerial post at J.C. Penney — a role she loved. "I was a typical corporate diva," she says, always impeccably made up and dressed.
As the years rolled on — she worked at the company for nearly a decade — she gradually became disenchanted. When her brother died at 51, she decided "life was too short" to remain in a job she no longer enjoyed.
What came next was another reinvention. Her partner, Backus, was an electrician with a side business building large concrete vaults that house electrical equipment. Ramos began dabbling with the concrete, mixing and pouring it to make stepping stones for her garden, then planters for small trees. Soon she'd taken charge of the business and landed a contract to supply an Anchorage electric company with the utility vaults. Working in a small warehouse behind the Anchorage house she shared with Backus, she managed two employees as they mixed gravel, cement and water, poured the mixture into 1½-ton forms, and moved them to a truck to be delivered.
Banks and the government have fallen short in helping homeowners in danger of foreclosure.
The Story So Far
Systemic failures at the country’s banks and mortgage servicers have exacerbated the most severe foreclosure crisis since the Great Depression, and government efforts to limit the damage have fallen short. ProPublica created an unrivaled database of homeowners who have faced foreclosure, opened a Facebook page to encourage homeowners to share their stories, wrote profiles of some of them, and incorporated their experiences into our reporting. We also provided a comprehensive rundown of the numbers behind the crisis.
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