The debt collector had his speech prepared for the 81-year-old woman who answered the door of the cream-colored Victorian in San Francisco’s Upper Haight neighborhood last month.
“We’re going to sell your condo, unless you have $13,000,” Rosemarie Benter remembered him saying: “13,000, or it’s going to be sold in 29 minutes.”
She recalled staring in disbelief before the panic set in. Benter’s home, a roomy unit with a fireplace in a building with views of the Panhandle and flowers bursting from the window box, was by that point worth $1.4 million — about average for the neighborhood.
But as she stood dumbfounded in the doorway that day, a foreclosure trustee auctioned her home outside the Memorial Gate at San Francisco City Hall. An undisclosed buyer purchased the condo for $12,464, an eye-popping transaction that occurred after the 81-year-old woman defaulted on a loan worth less than $10,000.
Attorneys and housing advocates say Benter was swindled, while admitting that no laws were probably broken. In recent weeks, two nonprofits and a city supervisor have intervened to keep her in the home she owned for 30 years. Yet their path is strewn with obstacles. Benter, who survived a stroke and suffers from severe arthritis, will face an uncertain future if she gets displaced.
“I’m almost 82,” she said, her voice weary and frayed during a phone interview from the Upper Haight condo. “I’m too old to live on the street.”
A complicated sequence of events led up to the auction of a $1.4 million San Francisco home for less than $13,000.
A $1.4 million condo on Page Street in the Upper Haight sold for under $13,000 in a foreclosure sale. The previous owner, an 81-year-old German immigrant, lost her home after she took out a loan but was unable to pay it back. City officials are trying to intervene in what they say is a predatory scheme targeting the elderly.
Santiago Mejia/The Chronicle
For Benter, the trouble began in 2007, when she took out a reverse mortgage — a type of loan that allows older homeowners to cash in on the equity they have accumulated, on the condition that they stay in the residence and pay property taxes.
Fourteen years later a series of health issues plunged Benter into debt, and she fell behind on her property tax bill. She took out a $9,519 loan, not realizing that her house became collateral and that she was at risk of losing it if she defaulted.
By last October, the loan, bloated by fees and an 8% interest rate, ballooned to more than $11,000. When Benter failed to pay it back, the lender swooped in and foreclosed on her home.
On Feb. 17, the San Francisco Community Land Trust stepped in to intercept the sale, citing a new state law that seeks to protect residents from getting pushed out in a foreclosure and to prevent the property from sitting vacant.
To that end, law gives a first right of refusal to tenants, owner-occupants, or a nonprofit seeking to convert the home to affordable housing, all of whom have 45 days to exceed the highest bid at the auction. The trust submitted $12,505 to buy the condominium and rent it to Benter at an affordable rate, but found the property came with a $734,518 debt burden — the amount owed to PHH Corp., the lender that worked with Benter on her reverse mortgage.
As of last week another buyer had outbid the land trust and would inherit the debt to PHH Corp. if the sale closes. A representative of Golden West Foreclosure Service Inc., the trustee handling the auction, said he could not disclose the results until the California attorney general publishes them, or until the new owner files a deed.
The sudden turn in events frustrated Saki Bailey, executive director of the Land Trust, and Darren Orr, an attorney at the Mission District nonprofit Legal Assistance to the Elderly, who is representing Benter as she tries to stay in her home. Both maintained they are not giving up.
“If they are a proper bidder, we would like to pressure them to do the right thing and sell it to the Land Trust or our client,” Orr said. “They can do whatever they want, but they should not displace an 81-year-old disabled longtime San Francisco resident at this time in her life.”
Representatives of PHH did not respond to requests for comment, and Michael Bruno of Cal West Home Loans Inc., the lender of the $9,500 loan for Benter’s medical bills, did not return multiple phone calls.
Benter described months of confusing exchanges with the broker who connected her to Bruno, who also did not respond to a request for comment. Although she said she received periodic notices of default in the mail for a year, she did not know how to interpret them and was unaware of any payment schedule.
Orr was familiar with many elements of Benter’s plight.
A German immigrant who married — and subsequently divorced — an American G.I., Benter lived in San Francisco for about 40 years, long enough to see her three children grow up and to mourn two sons who died of AIDS. She’s watched the city’s real estate market heat up, to the point that her once-modest condo in the Haight became a million-dollar home — only to sell for less than a hundredth of its value.
Older adults — particularly those who own a home in a city where real estate prices are escalating — are “walking targets” for financial abuse, Orr said. They’ve had years to amass financial assets, but may also be medically frail and vulnerable — making consequential end-of-life decisions, often with few people to guide them.
