Catherine O'Kelly over the past
12 years has turned her one-bedroom rental in the redwoods into a
charming refuge, but today the 68-year-old grandmother and her cat,
Lily, may see their home sold out from under them.
The
property on Bethany Drive, like many others, is scheduled for a
foreclosure sale at 1:30 p.m. on the steps of the County Government
Center.
O'Kelly's landlord owes more than
$433,000 on an adjustable-rate mortgage he took out in January 2006
with American Home Mortgage, which filed for bankruptcy about a year
and a half later.
"I'm so attached to my little house," O'Kelly said. "I can pick up and move if I have to, but I don't want to."
Rents are so high it won't be easy to find something comparable for what she pays: $825 a month plus water and trash pickup.
"Everything under $1,000 a month is a studio," she said.
O'Kelly,
who has lived locally for 32 years, is sharing her story to illustrate
how renters can be displaced by the foreclosure crisis.
Not
enough has been done to protect renters, according to Tenants Together,
a statewide advocacy organization that issued a series of
recommendations in March, including pressuring banks to preserve
tenancies after foreclosure.
It's hard to say how many renters in Santa Cruz County are in the same situation. No one tracks those numbers.
An
analysis by Tenants Together found a third of the homes in foreclosures
statewide last year were rentals. If that percentage held true in Santa
Cruz County it would mean about 300 renters were displaced by last
year's record foreclosures. This year's foreclosure pace remains the
same.
O'Kelly, a retired engineering administrator for
AT&T, enjoys the cozy cabin, just 649 square feet, on the
hillside. There's a sunlit-view from the front deck and a rustic set of
stairs to a redwood grove in the back.
The property, assessed at
about $110,000, is owned by Loren Warwick. He is listed as the owner of
AutoRep in Bellevue, Wash. Calls to that number were not returned
Tuesday or Wednesday.
County records show Warwick secured an
interest-only loan for $255,500 in 2004 with Long Beach Mortgage, a
now-defunct subsidiary of Washington Mutual specializing in higher risk
loans. Two years later, he got a $375,000 loan; the payment was
scheduled to increase last fall.
Warwick's father Harold, one of
the founders of Bethany University, built the cabin as a summer home
and bequeathed it to his son, according to O'Kelly.
She has been
caring for the half-acre property, clearing dirt off the patio stones,
arranging for roof repairs and painting. A windstorm in January 2008
resulted in 13 truckloads of branches and debris, she said, consulting
her records.
The landlord reimbursed her up until August, she said, then he didn't return her phone calls or e-mails.
A
Jan. 5 letter informed her the lender had filed a notice of default,
the first step in the foreclosure process, because payments were
delinquent by $8,763. Letters from real estate agents followed. Since
she is not the owner, there was little she could do.
Friends talked her out of paying the $795 tax bill in April.
She
wishes the new owner would be willing to let her keep paying, but
lawyers familiar with foreclosure say new owners typically evict
tenants because they believe vacant properties are easier to sell.
With the auction date looming, O'Kelly e-mailed friends a plaintive message.
"Well,
this is it!!!! The Foreclosure Frenzy has come home," she wrote. "So
all I'm asking is please send me Good Luck' wishes, and we'll let the
universe take care of the rest."
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