Black people leaving the South for work and equality in the West came for the area's dock jobs — the International Longshore and Warehouse Union was one of the few integrated unions in the city, explains Bill Issel, professor emeritus of history at SFSU. In the late 1950s Geary Brown's parents arrived from Oklahoma, Dexter Cato's from Louisiana.
In addition to jobs, the industry brought smokestacks, loud machinery, and raw fish and meat smells — all of which kept property values low and, partnered with white flight and redlining, left available plenty of affordable housing for working-class black people looking to become homeowners.
By 1980, Bayview — the only zip code in city history to be predominantly black — had the highest rate of homeownership in San Francisco. But as factories and shipyards closed in the '70s and '80s, unemployment, gang crime, and the drug trade rose, spurring many black residents to leave the neighborhood, and San Francisco. More Asians and Latinos moved into the city, with many settling in the southeastern pocket. By the turn of the millennium, the black population in Bayview had stabilized at around 50 percent.
Then came the housing boom and bust. Hundreds of homes, including many that had been paid off and later refinanced, fell into foreclosure. Second generation residents, whose parents had planted roots in the community, suddenly faced the prospect of leaving town.
"We've reached the point where those who are going to stay have made it clear: 'No I'm not going anywhere,'" says Ed Donaldson, a housing counselor with the nonprofit San Francisco Housing Development Corporation and a Bayview native. "With the foreclosures, those people who would otherwise be able to stay are being pushed out."
Geary and Shirley Brown bought their first home in June 1995. He had built up savings from his years as a trucker and was then making a solid wage as a Muni bus driver. Throw in Shirley's income as a nursing assistant at Laguna Honda Hospital and they could afford the 30-year fixed-rate mortgage for the two-story, three-bedroom, two-bathroom, $194,500 hilltop house in Bayview.
Brown got back into trucking in 1998 when Pac Bell Park construction started up. Soon he was pulling in six figures. By 2005, he wanted to expand his business, so he took advantage of his rapidly appreciating property and refinanced his home for $300,000 with Wilmington Financial — he'd been getting pamphlets in the mail describing how smart and lucrative refinancing was. The way it worked was Wilmington paid off Brown's original mortgage ($194,500), then gave Brown a new home loan for the current appraised value of the house ($300,000), with Brown pocketing most of the $106,000 difference.
Seven months later, property values still rising, he replaced that loan with a $431,550 loan from Equifirst; and then again in January 2007 for $475,000 with Countrywide Home Loans. For all three mortgages, the lenders offered him their "pick-a-payment" program, which allowed homeowners to select how they wanted to pay off the loan. Brown chose the option with the lowest monthly payment: an adjustable-rate mortgage, where monthly payments begin at a certain amount before increasing after a set number of years. For the $475,000 mortgage, he started paying $1,800 a month.
He used the new money to buy a 2000 Peterbilt truck, which got much better gas mileage than his '79 Mac. He hired drivers. Approaching 60, he wanted to ease down his number of shifts, spend more time with Shirley. The rest of the refinance cash paid off his bills.
To Brown, who'd worked hard all his life to earn his house, the refinance felt like a well-deserved reward. He wasn't the only one, of course. Many of the homeowners at that Saturday afternoon barbecue had reason to refinance. Cato and Rhodes each say they had a kid in high school and wanted to be able to afford college. Carolyn Gage, a former San Francisco Sheriff's deputy, says she got injured on the job and needed an extra cash flow to supplement the worker's comp. Josephine Tolbert, a 75-year-old daycare provider who's owned her home for 45 years, says she owed her ex-husband money after a divorce settlement. Romeo Baful, a Filipino who has lived on Quesada for more than 20 years, say he needed to install new walls because the old ones had suffered termite damage.
Whatever the residents' reasons, the loans came with similar ease. Homeowners like Brown and Cato were eager to take advantage of their property's rising value, wanted in on these free-market spoils. And lenders were happy to take advantage of that enthusiasm.
"They sat my family upstairs in that living room and said, 'You know how much money you can save?'" Cato recalls. "All that money that would be going to my kids' college trust fund. It seemed too good to be true. But I was working, my wife was working, why wouldn't it happen to us? We wanted the American Dream, too."
The story is familiar by now: The housing market collapsed, and property values tanked, meaning that many homeowners could no longer pay off the mortgage by selling the house. Compounding the problem for Cato and Brown, their adjustable-rate mortgage payments had increased after two years. Brown's climbed from $1,800 to $2,800, Cato's from $1,700 to $4,200.
This is but another back door way that the city is getting most of the low middle income black community out of San Francisco.
Oink....if they wont to blame some body then thank all the radical communist agenda's that controled the city's political machine during the mid 1990's and up to the present.
What a shame when will people wake the hell up from this communist bastard's death grip !!!
This article is a crock.
I'd feel a hell of a lot more sympathy if any of these foreclosed people were actually victims of circumstances beyond their control (e.g. loss of a job, death of a family breadwinner, debilitating disease, etc.). Those are the awful twists of fate that no one can control. I would have no problem helping out people like that or feeling anger towards a predatory bank that swoops in to take the family home.
But that's not what's going on here. As far as I see it, we have an entire neighborhood full of greedy people who made some really stupid decisions. Everyone in the story was middle-class. No one was "trapped" in poverty. Most likely every thing that was purchased by these folks with refinance money could have been purchased with cash in time. Problem is, these people wanted the toys NOW! And the re-fi money was the "get rich quick" way to do it.
And I'm sorry, but why were these people so naive to think that these lending institutions had only the best interests of the borrowers in mind? That's just crazy! And if you're borrowing that much money ($400,000+), why wouldn't you read the fine print???? This is only the most important financial transaction of your life!!!!
I also find it incredibly offensive that other posters believe these people should be coddled and made to be victims. Isn't this only because these folks are people of color? If they were white, everyone would say "well, they got what they deserved!" Why don't you hold non-white people to the same standards? Is there some sort of unwritten truth that blacks and latinos are these excitable, mentally deficient, and child-like people who are incapable of acting like rational, mature adults? Talk about the soft bigotry of low expectations...
Historically Black neighborhoods like the Bayview are changing because of a reignited interest by those with money to live closer to the urban core. The market affordable rental housing, once found in abundance close in, is moving to the suburbs. With the suburbs inflated by Metro's artificial shortage of land, inner city is inflated even more. People's interest drive the market as well. I believe that interest is what's inflated much housing nationwide. Not just buildable land. That is the standard line the planners feed people all over the USA after they destroy affordable housing for the poor in this housing struggle the Black homeowners in the Bayview the Dispossesed. .
The author has no support for his claim that this is the "free market" and not racism. The bank bailout is proof that we don't have a free market in this country. I want to echo earlier comments by reminding everyone that our country has a history of government-sponsored racist housing policies. I think it's supremely unfair of the author here to leave that information out, or worse, actively deny it, with no evidence to back that up!
The history of mortgage lending is rooted in racism. Goggle search the "The Federal Home Loan Corporation" where you will find that it was federal gov't that started the practice of redlining, which was later adopted by the banks. Just think 40 years ago black folks couldn't get a loan because they were deemed to "risky" but, with asset securitization the banks found other unsuspecting goofs to "sell" the risk to so, that they could simply collect the fees. Now that they have drove the economy off a cliff with their unscrupulous practices everyone wants to blame the victim!
Finally, if you had $500K to lend would you feel compelled to loan to someone that didn't have the income? Of course not since you would do your due diligence to verify everything on the loan application. Basically, no one held a gun to head of the banks to force them to make the type of loan you currently find in the black community. In fact, the banks made loans in the black communities because they knew this is where folks had the most equity due to the pent up demand from redlining. In the end, this will go down as the biggest transfer of wealth in the history of America!
"Well thought out greed couple with unintended ignorance"
This guy pulled $280,000 of cash out of his house, didn’t repay, and HE IS THE VICTIM? On the other hand, the bankers who approved these loans should have been fired.
There are a number of very real truths here. Banks did in fact lend out money to people who could not within reason pay it back over the long term, with the premise that they were ultimately covered and would profit by the notion that real estate is always a positive investment, and by investing at the same time that lenders would default. At the same time many a Bayview resident took money with shortsighted visions of "free cash" and future sales or future easy refinances. Ultimately both sides took huge gambles that blew up in their faces, the difference being that the large banks had the benefit of a government bailout and a task of clearing balance sheets and underwater assets while homeowners who werent prudent found themselves in a hole, one that government stimulus was only marginally meant to help them out of. Trickle down has never really trickled down, and history was bound to repeat itself.
I am a Bayview resident, and i know many like those mentioned in this article. Many of which were my FORMER neighbors. Gentrification is a fact of life in the Bayview, and it see it with the changing faces of my neighbors, and changes to the neighborhood, but gentrification isnt the root cause of what happened, but rather gentrification is the effect. With informed and thought out fiscal responsibility nobody can force you out of your home, and nobody is unfairly throwing anyone out. Choices were in fact made, and poor ones at that at times, but for some things there is not a do-over and certainly not a requirement to give someone a helping hand and when it comes to a financial bottom line such an occurrence is often non-existent. What has happened in the Bayview is the same thing that happened all across the central valley, all across the country, it just happens to be magnified in the Bayview because of the deep ethnic core shift that is the result of the bubble burst. Too many saw the opportunity of "free money" and lived easy, and what seemed like a dream quickly became a nightmare, and not gentrification as system nor a bank made people believe it was a dream.
In 2006 my home in the Bayview appraised for $850k in 2009 it appraised for $600k today it sits around $475k, and if i had jumped at the money in 2006 i would without a doubt been just like those in this article, and exactly like my neighbors to my left and across the street who are now my former neighbors for the exact reason, because they did take the money. And with that money they had new cars, took trips, lived it up, and talked about refinancing when their ARM ended, as if it was given...well nothing is given. We know that as indisputable fact now. Every morning on my way to work i drive past no less than 6 homes that have been bought as foreclosures and are being flipped (yes flipping is alive and well in the Bayview) and while it isnt part of cunning gentrification the result will look like a cleansing as it were of one socio-economic group for another.
In the end, the development of Mission Bay will eventually continue to march its way past Dogpatch and up Third Street and when it comes around the corner of Islais Creek, property owners are going to see the $$'s and sell, and old buildings will give way to new developments (5800 Third, 5600 Third) with more to come and then you will see a very marked poplulation shift. For all those who do not know the T-line was NOT built for the current residents of the Bayview (Despite anything Willie L. Brown Jr. said) but for the future residents of the Bayview and there is your gentrification plan. To suddenly incorporate a historically unicorporated part of San Francisco, with mass transportation, and development, and partnership with mega builder, there is your gentrification plan. The construction of all the senior housing to encourage homeowners to sell property they cannot maintain, thats your gentrification. The replacement of Alice Griffith and other public housing, thats your gentrification actively at work and I will freely admit, some aspects of gentrification of the Bayview are much in demand and even needed, but the financial crisis wasnt part of the plan, it just made it that much easier when it seduced peoples greed with the promise of money dreams without working for it. Too many took to that dream, and in the working class Bayview where many have long lived earning 50% of the median income in San Francisco (even today average income is only 29k) dreams are all there are, but this was the ultimate ill-conceived dream too tempting to resist, but with a steep price to pay for being a dreamer.
The Bayview as a "Black" neighborhood is undoubtedly on its final countdown, and it is sad to see, for what might have been, of a thriving incorporated ethnic neighborhood. But even before this financial crisis took hold there was a need for the neighborhood to open up, socioeconomically, to not continue to be stuck in the time warp where the "hustle" was more celebrated than the professional, and where it was more vogue to complain about what you dont got, and who wont help you get it, than to do the work to do for self. For those who want to stay in the Bayview...stay, your house may no longer be your home, but stay, continue to take pride in staying. Walking away to say you were kicked out, pushed out doesnt tell the full story, at least not the same as with the Fillmore, nor does it honor the generations who did work so hard with arms and legs in the shipyards, etc. to create the Bayview as it has existed for so long.
When one writes about the "free market" doing something nowadays, the implication is that it is inevitable, could not be stopped. But the housing bubble and bust of the 2000s was not inevitable. The Federal Reserve, under the (then) sainted Alan Greenspan, consistently worked to keep credit cheap and easily available. Greenspan was repeatedly warned about financial and housing market bubbles (and scams) and was given explicit authority to regulate them, authority he refused to use. He was sure that the markets would self-correct, that bankers would act rationally and responsibly. But bankers didn't act rationally and responsibly, and the result was a global financial crisis.
So homeowners in the Bayview were offered loans that were too good to be true. That was happening everywhere, but there seems to be some evidence that it happened more in heavily Black neighborhoods like the Bayview. No doubt some owners signed up for apparently easy cash without reading every word of a long documents written in deliberately obscure language (language that some states are now making banks simplify). It was morally (and perhaps legally) incumbent on the sophisticated bankers and brokers who sold these loans to homeowners, some of them not very sophisticated, to provide clear explanation of the potential risks. Doing that would approach some more decent version of capitalism, rather than the predatory capitalism of recent decades.
It could have been different. It might be that the Bayview would have turned over to higher income families in the long run, that is a powerful dynamic in San Francisco (and subject for a different discussion). But it needn't have been so catastrophic and so wrenching for ordinary peoples' lives.
This is what happens when you use an adjustable rate short term loan to finance a long term investment. The rate increases were right there in the loan papers. It's not the banks fault that the borrowers committed to a loan that they could not afford. They gambled on the real estate market. Sometimes when you gamble you win, sometimes you lose. No guarantees.
I agree the city would love to have diversity be gone...I've seen it to be true my whole life in SF. BUT having purchased a home in Ingleside district in 1998, I know firsthand the many flyers stuffed in my mailbox and I was wise enough (thank goodness) to know that it was a scam! Every flyer sent to me went in the trash...I still have my home, I can afford my payment and that's with a couple refi's over the years to lower my interest rate. It's true people were preyed upon, but homeowners go greedy too. If you refi to start a biz that's a big risk and you should be ready to deal with the fallout.
No one forced anyone to sign these mortgages. Sorry, but there are people all over losing their homes because they can't pay.
Hey Don, yeah, a whole bunch of people are losing their homes because they cant pay. Actually, millions of people are losing their homes because they cant pay. On top of that, mortgage back securities, mortgages that weren't secure at all, all messed up a crap load of investments, retirements and pension funds and now, those people can't pay. Oh, let's not mention the crashed economy because the market was flooded with these loans. Now all these people, that had jobs and were paying, we're laid off and now they can't pay. And how about those cuts to education? Well, there's alot of people in the future that wont be paying anything because they don't have a education that would put them in a position for a career job that would allow them to pay.
And hey, the banks!!! No one put a gun to their head to push and incentives toxic loans into working class and middle class communities. But they sure as hell aren't paying.
Good looking out, though Don. You're simplistic view on things just inspired me to participate in any event that helps educates people like you and help people that are in this article fight to get their homes back.
ps. did someone pay you to post to this article? because I'm sure no one forced you to post what you posted.
Great article, thank you for seeing through glitzy hype and pandering deception of big money. They seem to be very satisfied with themselves while Pushing the Poor and Needy into the streets and lining their pockets with bigger bonuses.
This is leftist garbage. When you don't pay your mortgage you are properly evicted. Anyone with a brain could see the problem with balloon mortgages. The Feds were wrong to encourage so many irresponsible people to take out mortgages. Of course capitalism is always to blame ! I stopped reading Big Fat Bruce's Bay Guardian four years ago because of this type of slanted rubbish. Why should I tolerate it here ?
Uh, in case you haven't noticed, sfweekly has also been an alternative newspaper. You have it backwards about whether you should "tolerate" it because you apparently have never read this site or the paper until today, or you would know that.
You can always watch Fox News to find coverage that agrees with your view of the world.
You can't either read or think straight. I've been familiar with SF Weekly since the 80s.Just because it's a so-called alternative paper doesn't mean it has to have a braindead left view like the BG.Don't watch regular TV. Never watched Fox News because I'm a libertarian, not a neocon.Sorry I don't fit your stupid stereotype.
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