Crisis comes home
America’s housing meltdown thrusts Altadena’s Claudia Turrentine and other seniors into a frightful future
By Joe Piasecki 04/30/2009
These should be her golden years, but life has never been so uncertain for Claudia Turrentine.
After 38 years in her well-kept home on East Mariposa Street in Altadena, the 79-year-old former home-care nurse and widow of a mechanic may lose it to foreclosure, and she has few resources to move elsewhere. Her only income is less than $950 per month in Social Security benefits, not enough to pay even the interest on her mortgage.
Long before last year’s collapse of the housing and financial sectors, Turrentine attempted to refinance her home at a lower fixed rate, but later found she had been given an adjustable payment that was out of reach. She jumped at a second refinancing offer to lower her monthly payments, but that turned out to be an option loan which stuck her with more than $10,000 in additional fees and payments that didn’t even cover the interest on her loan, leaving her deeper and deeper in debt each passing day. A grandmother, Turrentine only spoke to her children about her problems once her bank account was drained, and now her utility bills are overdue and piling up.
“I thank God for being as well off as I am,” said Turrentine, a regular churchgoer, referring to a serious illness she survived several years ago, “but I don’t know where else I would go. All I can do is pray.”
Turrentine is not alone in struggling to survive after a life’s work.
Since October, the number of seniors seeking foreclosure prevention help at the nonprofit Pasadena Neighborhood Housing Services has grown exponentially, from one or two per counselor (there are four) to as many as 10 or 11, said PNHS’s Lynette Martin, who saw Turrentine last week and is interceding with the bank on her behalf.
“How did someone give [Turrentine] this loan, and how do they sleep at night?” asked Martin. “Someone made a lot of money off her in the previous refinance and the other one with $12,000 in fees.”
While some of those Martin sees are, like Turrentine, prey to unscrupulous lending practices, others are simply victims of the economy. One common situation, said Martin, is that seniors need more money to live on because the value of their retirement investment has plummeted, but they are not able to obtain a reverse mortgage because their homes are now valued at less than they owe on their mortgage. All around, “it’s a horrible situation,” she said.
Meanwhile, the sun isn’t shining any brighter at the Pasadena Senior Center, where Outreach Services Director Tonija Barnes reports she can no longer help all the seniors who come in needing basic food and shelter.
A program that delivers groceries to people 60 and older who live on less than $12,000 per year serves more than 400 per month, but last week 205 remained on the waiting list hungry because the program, a partnership with the LA Regional Food Bank, does not have enough resources to feed them all. Barnes is currently seeking a second food bank partnership to supplement the program.
On the other hand, a free taxi voucher program is underutilized because the seniors who use them to make doctor visits are no longer able to afford medical care as frequently. Due to cutbacks in Medi-Cal coverage, “a lot of them don’t make as many appointments because they cannot afford the share of the cost that is now passed on to them,” said Barnes.
Barnes also has trouble finding affordable housing for seniors in the area. “There’s no affordable [senior] housing left in Pasadena, period. All the places we’ve contacted have two- to three-year waiting lists, so we’re looking at places outside the city — Arcadia, Monrovia, Eagle Rock — and we’ve identified agencies that will help, once a senior does find housing,” she said.
All of this paints a very bleak picture for those in situations like Turrentine’s, but a number of programs — some from the government and others initiated by the banks themselves — offer a glimmer of hope.
Turrentine’s disastrous loan was made by Golden West Financial’s World Savings Bank, a savings and loan that was acquired by Wachovia, which in December came under Wells Fargo’s umbrella.
A Wells Fargo spokesperson cited customer privacy laws in declining to speak specifically about Turrentine, but said the bank offers various repayment negotiations for Wachovia customers whose loans they acquired.
“Regardless of where our mortgage loans originated, we are committed to helping our customers stay in their homes,” said spokeswoman Aimee Worsley. “The solutions we offer differ, based on the customer’s circumstances and what will be required to help them reach a sustainable mortgage payment.”
Worsley said that in addition to its own programs, the bank is also participating in the Obama administration’s Home Affordable Modification Program, which lengthens the terms of a loan and lowers its interest rate, and Home Affordable Refinance Program, which allows for a new loan under more livable terms.
But these public and private programs also have their critics, many of them saying that loan modifications may not go far enough to make a lasting difference, especially for those hit by both unemployment and plummeting home values.
“Just lowering the payment a couple hundred dollars isn’t going to keep people in their house. It needs to be more substantial,” said Los Angeles Daily Journal columnist Martin Berg, who has written widely on the housing crisis and will be speaking about foreclosures at today’s Pasadena Conference on Aging as a member of a panel that includes Inner City Law Center Executive Director Adam Murray.
Foreclosure can also be an issue for seniors who rent their homes, adds Murray, a former Pasadena-area state Assembly candidate. While the city of Los Angeles has laws that protect tenants from eviction when the building they live in is foreclosed on, Pasadena and other communities have no such protections, he said.
“Logistically, you could extend [that LA policy] to Pasadena or even statewide,” said Murray. From a public policy standpoint, “It saves money. Seniors who’ve been paying their rent on time for decades and through no fault of their own are getting kicked out of their homes will need support services, all kinds of public and private support that they wouldn’t need if they stayed in their homes.”
Back at the Senior Center, programs dealing with financial management are growing more popular.
“One gentleman who’s been retired for about 10 years was banking on his 401(k), but it lost almost 90 percent of its value, and then his wife took ill, was hospitalized and passed away,” said Barnes. “There are so many stories I can tell you.”
The Pasadena Conference on Aging takes place from 8 a.m. to 1:30 p.m. today at the First Church of the Nazarene, 3700 E. Sierra Madre Blvd., Pasadena. Call (626) 744-6927.