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After Foreclosure: The Social and Spatial Reconstruction of Everyday Lives in the San Francisco Bay Area

  • Author(s): Martin, Anne Julien
  • Advisor(s): Chapple, Karen
  • et al.
Abstract

This dissertation examines the experiences of former homeowners in the San Francisco Bay Area who have lost their homes to foreclosure from 2006-2012. Against the backdrop of the ongoing foreclosure crisis that is part of the larger recession, this study asks what foreclosed households have experienced during this period, and how those experiences have shaped the personal meanings they have drawn from foreclosure. While displacement due to foreclosure includes both tenants and former homeowners, this research focuses solely on the effects of the displacement of former homeowners. I ask how former homeowners recover after foreclosure, how foreclosure continues to affect households after foreclosure, and how moving after foreclosure plays a role. In this dissertation, I start to extrapolate theories of larger effects outside of solely that of the built environment, looking at where people have gone after foreclosure in the San Francisco Bay Area and how they discuss their experiences and beliefs about homeownership, moving, renting, credit, and home, after going through foreclosure.

This research is a mixed-methods investigation of the spatial and social impacts of foreclosure in the San Francisco Bay Area. Mixed methods allows an understanding of the spatial movements of households and social organization of neighborhoods across the metropolitan region due to foreclosure, as well as an understanding of how these moves are incorporated into individual household-level strategies towards household recovery. This research uses foreclosure record data and matches the addresses of each foreclosed home and the name on the deed to the individual's new address in the US Postal Service's Change of Address data to examine patterns of moving, after foreclosure through GIS analysis. Between May 2010-April 2012, I conducted 55 one-hour semi-structured interviews, 45 with former homeowners who lost their residence to foreclosure in the San Francisco Bay Area between 2006-2011.

I use interview data with former homeowners to analyze the impacts of foreclosure, ranging from the mechanics of the foreclosure process, to the impacts on desires to buy a home again, to impacts on credit and personal finances, and the meaning of home. I use interview data to investigate former homeowners' actions and beliefs, after foreclosure.

Chapter 2 describes the experience of the foreclosure process, from the perspective of the homeowner. This chapter describes the foreclosure triggers that interview participants discussed, the experience of the foreclosure process and homeowners' attempts to contact the bank, their experiences of trying to secure loan modifications or do short-sales, experiences of losing their savings, and their experiences moving.

In Chapter 3, I analyze former homeowners' interest in buying a house again in the future, and how this relates to changed ideas about renting. While former homeowners in their 20s-40s look forward to being able to buy again, they have envisioned financial strategies for how they will buy again and protect themselves. However, after foreclosure, life goals shift, and many consider what really matters in their lives, outside of material goals.

In Chapter 4, I look at the relationship between foreclosure and credit. Many former homeowners resist declaring bankruptcy as part of their foreclosure, but with tax and mortgage deficiency liabilities may consider declaring bankruptcy after foreclosure. The damage to credit caused by foreclosure may be long-lasting, and affect employment opportunities, the ability to consolidate consumer debts, and the ability to secure rental housing, which is discussed in Chapter 5. During the foreclosure process, homeowners experience intense pressure from collections or delinquent loan divisions. This contributes to homeowners' efforts to avoid debt after foreclosure. I uncover a paradox where former homeowners feel that credit recovery is important to their personal recovery after foreclosure, however, common strategies of resisting and rejecting consumer credit, and repeated testing for access to credit may actually contribute to slower recovery of credit scores.

In Chapter 5, I analyze where households have moved after foreclosure. Using spatial analysis techniques with mapping, I find that in general in the San Francisco Bay Area, the locations with the greatest concentrations of foreclosure are also the locations where households are relocating after foreclosure. The second half of the chapter describes how former homeowners found a rental home, through disclosure of their foreclosure and looking for a sympathetic landlord.

The final chapter concludes by discussing a disconnect between non-profit foreclosure prevention, and preventing foreclosures, and summarizing these ways in which experiences during and after foreclosure have shaped the perspectives of those interviewed in this research, and extends this to the implications for policy.

The ongoing foreclosure crisis will continue to affect increasing numbers of homeowners, and we should consider whether housing policy and financial institutions are doing enough to prevent the loss of home, financial resources, and human dignity described here. Currently, foreclosure is the only reliable solution for exiting homeownership when property values have fallen. Foreclosure has operated as a machine, and, as I discuss in the chapters to follow, once a homeowner enters that machine, it is difficult to escape. Foreclosure is a process of great uncertainty for the homeowner, and even after foreclosure, their legal and financial situation has not been resolved. The experience has a life-changing effect on many former homeowners, who change their beliefs and behaviors, not just in relationship to homeownership, but also in terms of their life goals, their relationship to banks and financial institutions, their use of debt and credit, and where they live after foreclosure. While there have been policy changes to improve the numbers receiving loan modifications at the margins, there has not been the political will to create a large-scale significant alternative to foreclosure. Without a larger policy intervention, the process of foreclosure presented here will continue to be the only guaranteed resolution for those who cannot stay in their homes, or for whom it is not financially sustainable for them to continue to stay.

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