The epidemic of foreclosures that has struck Alameda County since 2006 is creating devastating health impacts, according to a new study released by the Alameda County Public Health Department (ACPHD) and Causa Justa /Just Cause on Thursday.  “Know it or not, we are standing in a hot-spot of premature deaths,” said Dr. Anthony Iten of the California Endowment, which funded the study, at a press conference/demonstration. . “People living in this community die ten years earlier than elsewhere in the county,” Iten continued, speaking of areas in east Oakland and elsewhere that have been worst hit by the foreclosures. Elevated foreclosure rates and the consequent health effects, including premature deaths, are heavily concentrated in low-income neighborhoods of color, Sandra Witt, Deputy Director of the ACPHD, observed. 

Since 2006, fully one residence in four have faced foreclosure proceedings, a rate far in excess of the national and state average. Moreover, an unusually high percentage of the foreclosed properties house renters rather than owners. 

Justa Causa Board President Charlene Wedderburn pledged to hold the banks responsible for deceptive loans and foreclosure until evictions are stopped.  She stated that communities of color were deliberately targeted, with racially motivated marketing of deceptive, obscenely expensive loans to people of color. She cited testimony by whistle-blowers to the effect that subprime loans were referred to by Wells Fargo loan officers as “ghetto loans,” referred to people of color as “mud people,” made payments to ministers in predominantly of-color churches and neighborhoods for access and referrals, and preferentially steered people of color eligible for affordable prime loans to subprime loan and other disadvantageous lending products.

Lianna Molina of the California Reinvestment Coalition (CRC) pointed out that fully 70 percent of high-cost loans such as subprime and Alt-A loans went to communities of color, but only 40 percent of the prime loans.  Subprime refinancing, balloon loans, reverse mortgages and other financial products were also used preferentially in communities of color to rob seniors of the equity accumulated in their homes. This equity is the bulk of wealth in most families of color. Most of the loans responsible for the current crisis in Oakland were made by just 6 banks, Molina said.  Bank lobbyists have just succeeded in killing SB 1275, a state bill which would have required banks to respond to loan modification requests before commencing foreclosure proceedings. The CRC is still pushing for SB 1149, which would require banks and finance companies notifying tenants of their rights when foreclosure actions are commenced against their landlords.

The report outlined a variety of ways that foreclosure affects health.  The most obvious health impacts on the individual derive from stress, depression, and anxiety.  The survey found that families facing foreclosure had double the average rate of severe anxiety and depression. But foreclosures also injure these families in many other ways.  Foreclosure reduces income and wealth, lowing health directly and via lower quality food and healthcare; and it causes unstable, overcrowded, and dangerous living conditions (including homelessness). Moreover, the effects of foreclosure are not restricted to those living in the property foreclosed. Displacement of families disrupts social ties and resource networks, causing a loss of social cohesion and reduced political power. Vacant and poorly maintained buildings cause blight, crime, drug activity, and violence. Declines in property values causes loss of tax base, reductions in public services, and neighborhood disinvestment.

The study surveyed nearly 400 families in high-foreclosure East and West Oakland neighborhoods.

The executive summary and the full report, Rebuilding Neighborhoods, Restoring Health, are available for free download.