Florida Families Grapple With Foreclosures

Host Michel Martin talks with Paul Reyes, author of Exiles in Eden: Life Among the Ruins of Florida's Great Recession. In his new book, Reyes details the devastating effects of the foreclosure crisis on Florida families.

MICHEL MARTIN, Host:

I'm Michel Martin, and this is TELL ME MORE from NPR News. Coming up, the United Nations Project gets a report on its progress in combating global problems such as poverty, hunger and AIDS, a spirited debate about the U.N. Summit on Millennium Development Goals. We'll have that in a few minutes.

But first, we just heard a discussion about government policies designed to stimulate the economy, but the future of tax cuts or other economic policies does not change the fact that 2.3 million people have lost their homes since the start of the recession in December 2007.

In hard-hit states like Nevada and Florida, the foreclosure crisis has hit like a neutron bomb. Former homeowners have left, but the empty houses remain.

Paul Reyes describes foreclosures as the family business. His stepmother is a real estate agent who works with banks on foreclosed properties. His father owns a small business that cleans up the houses that are then put back on the market. Reyes, a writer, often works as part of the clean-up crew.

And as the housing market sunk, the work shot up, and he recently wrote a books called "Exiles in Eden: Life Among the Ruins of Florida's Great Recession." And he's with us now to talk more about what that housing crisis actually looks like up close. Thanks so much for joining us.

PAUL REYES: Good to be with you.

MARTIN: And as we mentioned, you have a really unique perspective on this. Your dad's job, and you've been helping him with this, is literally to clean out the houses of homeowners who've been evicted. Could you just describe just the range of things that you've seen?

REYES: Well, as you can imagine, it's a wide range of discoveries. I mean, it's everything from houses that have been abandoned for so long that everything inside has begun to rot in the Florida heat, overtaken by fleas, and sometimes we've found snakes inside refrigerators.

But most of what we find, of course, is mementos, letters, various pieces of evidence that allowed me to piece together who these people were and how they lost their home.

MARTIN: And who were they?

REYES: It's everyone. I mean, it's a completely egalitarian crisis. Of course, it has done more damage to the working class and to the middle class and to the poor, but it really does include all types.

MARTIN: You describe a truly terrible experience that your father had one eviction where a middle-aged man answered. Your father remembers that he seemed unsurprised at the news, but he asked for a minute or two, and then something truly awful happened.

REYES: Yeah, they showed up with the sheriff and then, as you said, asked for a minute, went back to the bedroom and shot himself. And of course, that was the last time my father saw that house since it became immediately a crime scene.

It's funny, the stories of suicides, just like the Great Depression, started to creep up around 2008 and 2009. I don't think that they were as widespread as we feared they would be, but they certainly did happen and in dramatic fashion.

MARTIN: I'm going to move on because unfortunately I know more about this than I wish I did. So I'm going to ask you how that experience affected your father.

REYES: Well, it rattled him, of course. And, you know, the job in general is a sad one. In discovering this for the first time myself, it was an overwhelming experience to come into these houses and to have this kind of intimate detail at your disposal without really the owner's permission, so to speak.

And that was the intent of the book was to basically honor these people and to put a face to the crisis.

MARTIN: What do you think is going to happen next based on what you've seen? I'm just wondering, do you imagine lives going forward from the houses that you cleaned out? What does your writer's eye see?

REYES: You know, for the most part, lives do go forward, and they move forward slowly, and it's a struggle. Across the board, nationwide, I don't see really any truly imaginative solutions to the problem.

There are some discussions about various nuclear options, debt forgiveness being one. But I don't really see anything out there that addresses how to keep people in their homes.

MARTIN: Is there an image that you would wish policymakers would keep in mind? Is there a particular couple or family that you met? Is there a particular house that you saw, I mean, in addition to this poor man who took his own life when your father was there with the sheriff? You know, obviously one would want people to think about that. But is there something else?

REYES: We talked about the deacon briefly, and I'll mention a little bit more about him. He was a fellow who went to prison for a while, found God, obviously became a deacon afterwards and bought a home, fell into a refinancing trap, lost his home, and we cleaned it out.

MARTIN: Do you want to be - would you buy a house again after all that you'd been through? And he said of course, and in fact, I have my eye on one right now. So it's that kind of resilience.

MARTIN: Interesting. Is it resilience, or is it - what is it that Samuel Johnson wrote about marriage, it's the triumph of hope over experience?

REYES: Well, but see at the same time, having been manipulated to the degree that he was manipulated, and having been as ignorant as he was about how these loans and how a mortgage works, look, he was angry, understandably, but he also admitted part of the responsibility was his.

MARTIN: The thing that I would do differently is I would be obviously walking into that situation a little wiser. He said, you know, I don't want to put it all on them. A lot of it was their fault, but some of it was my fault, too.

So in accepting that responsibility and wanting to own a home, it speaks to that desire, which is genuine. The problem is it just ran away from us.

MARTIN: Paul Reyes is the author of "Exiles in Eden: Life Among the Ruins of Florida's Great Recession." And he was with us from member station WLRN in Miami, Florida. Paul Reyes, thanks so much for joining us.

REYES: Thank you.

Copyright © 2010 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR’s programming is the audio.

Excerpt: 'Exiles in Eden: Life Among the Ruins of Florida's Great Recession'

By Paul Reyes

reyes paul

Paul Reyes Henry Holt and Company LLC hide caption

itoggle caption Henry Holt and Company LLC

When I ask my father what he remembers about the first houses he trashed out—a phrase we use to describe the process of entering a home that has been foreclosed upon by the bank, and which the bank would like to sell, and hauling all of what the dispossessed owner has left behind to the nearest dump, then returning to clean the place by spraying every corner and wiping every inch of glass, deleting every fingerprint, scrubbing the boot marks off the linoleum, bleaching the cruddy toilets, sweeping up the hair and sand and dust, steaming the stains out of the carpet (or, if the carpet is unsalvageably rancid, tearing it out), and eventually, thereby, erasing all traces of whoever lived there, dispensing with both their physical presence and the ugly aura of eviction—he says he doesn't remember much. It was too many years ago, for one thing, well before I started working for him. And since then he has trashed out so much bizarre flotsam, under such strange circumstances, that his memories of those first few houses have faded.

None of the stories my father shares about this work—and certainly none that I can tell—are uplifting. Sure, there are comedies and tragicomedies, and some plots are shot through with an absurdity that seems indigenous to Florida, where this began for us. But overall the circumstances remain bleakly fixed: Every foreclosed house, empty or not, clean or crumbling, feels lost, no matter the neighborhood or amenities, no matter the waterfront view. Some houses are left spotless, others in a wretched degradation, and the varieties are shared among the rich and poor, the elderly and the upwardly mobile. Some houses are lost before ever being lived in; others, abandoned long ago, provide shelter for addicts, bums, whores, snakes, strays, and low fungal kingdoms that fan out in the darkness, kick-started, maybe, by a cat turd or bowl of leftovers.

The junk left behind has fascinated me since I began working foreclosures with my father years ago—during holidays, or between jobs, boomeranging between Tampa and wherever I ended up next—tagging along with his regular crew, a pair of Puerto Rican laborers who start the day at six and call it at three. I have always been the crew's weak link, both because I fl inch in places that, after months of abandonment, have become so gloriously foul, and because I can't help but read a narrative in what has been discarded—an impulse that evolved into a purpose, just as the trash-out itself evolved from a job that paid when writing didn't into a way of examining a national crisis up close. So I've picked and gleaned, sweating nearly every item we've thrown away, creeping among the gadgets and notes and utility bills and photographs in order to decipher who lived there and how they lost it, a life partially revealed by stuff marinating in a fetid stillness. It is a guilt-ridden literary forensics, because to confront the junk is to confront the individuality being purged from a place. My father was never all that interested in this particular angle. He likes to keep things simple: He gets an address, the crew goes to work. Now and then I join them, but I've never been much good at keeping up.

Foreclosures are our family business, but a line of work my father arrived at after some professional meandering. José Miguel Reyes met and married my mother, Franny Picón Blanco, in Philadelphia in 1969. He was twenty-two, a Cuban refugee who'd spent his teenage years in the camps of Miami, and who, after moving north, found work running errands for the draftsmen at United Engineers. My mother, a Colombian girl, had arrived in time to attend high school in the States, and was diligent enough to grind her way toward a diploma while still getting her American bearings (math was easy, she says; Othello, not so much).

After marriage, and having me, my parents etched a constellation of hometowns up and down the East Coast, landing in Florida in 1984. After starting his own small construction company, and losing it, and after a relatively diplomatic divorce from my mother and a brief midlife crisis, my father married again, to a real estate agent this time. They began dabbling in houses— repairing them, restoring the historic ones, flipping most for a modest profit. His second wife, Mena, had been selling foreclosures for a while. Now, when it came time to clean a foreclosure out and fix it up, a job hardly anyone else wanted, my father was more than willing.

This turned out to be steady, predictable work, tucked in the margins of an otherwise healthy housing market. In the early 1990s, when my father and Mena began working together, foreclosures were, for the most part, quiet aberrations in real estate, the result of extremes: someone sick and uninsured, leveraging a home to cover bills; some couple spiraling through divorce, with neither one willing to pay the mortgage on a house neither wanted; gamblers who'd overextended themselves; addicts who'd finally unraveled. Among them all, the most common were the sick and brokenhearted. "Back then," my father says, "what you saw the most were X-rays on the floor, medical records here and there, divorce papers. You didn't see so many notices from banks. Back then, it was a combination of getting into debt and losing a job, getting into debt and going through a divorce, getting into debt and having medical problems. Not just getting into debt."

By and large, these were hidden tragedies. But as strange and unpleasant as this business was, it was also a way for a real estate agent to stretch out a little, to make a living in a less crowded field. By the mid '90s, agents were as ubiquitous as tourists, with would-be landlords trailing them. One degree separated you, it seemed, from someone in real estate—and in Florida, as in generations past, real estate embraced all comers.

The temptation, of course, was based on housing's reputation as a sound investment. The 5 percent rule—that a home's value increased by about as much every year—guided most buyers' expectations, because for the better part of a century the rule held true. And while the housing market endured booms and busts and bubbles over the decades, the value of a home generally crept ever upward, so that by the end of the century the longstanding faith in a home as a sound investment was tightly thatched together with the dream it was meant to inspire. Nostalgia and pragmatism, pride and profit. By and large, the dream paid.

Exiles in Eden
Vincent Ricardel/Henry Holt and Company LLC

But by the early 2000s, the political and economic forces that helped build this wealth had fallen into a dangerous groove. As activists, legislators, and presidents pushed for greater expansion in homeownership, mortgages—which for years had been bundled, spliced, and sold several times over as a tradable Wall Street commodity—evolved from a dull investment into a hot product. It wasn't just political pressure that made the mortgage-backed security so popular; in the early 2000s, the global economic landscape was such that the mortgage-backed security became comparatively profitable to other investments. What's more, deregulation had widened the field of players and expanded the list of what they were allowed to do. Thus, with deregulation, politicians had provided the blessing, blending the mandate of homeownership with the free-market incentive to provide it. As investors demanded more mortgages to trade, lenders took greater risks in providing them. Soon enough, the subprime loan (one issued to a high-risk borrower) became a dangerously ubiquitous chit, and its varieties speak to the frenzy that evolved: Stated Income Verified Assets, Stated Income Stated Assets, No Income Verified Assets, No Income No Assets (aka "Liar Loans"). Borrowers were lured with adjustable payments, deferred payments, interest rates that were harmless at first, but which doubled or tripled after a handful of years. Some homeowners borrowed 110 percent of the value of a house; others borrowed ten times what they made in a year. Easy money after just a few questions, nothing too invasive. And if a borrower's economic truth didn't bear out, the commission was all the motivation a broker needed to fudge the math. Maids became landlords. Condominiums became a kind of currency. In some cases, even the dead qualified for a loan.

Homeownership became a self-perpetuating addiction: As more people qualified to own a home, more people wanted one, and as the demand for homes increased, so did the price. By 2004, the 5 percent rule had become obsolete, and the faith in homeownership warped into hysteria, with home prices in cities across the country increasing by as much as 30 percent a year.

By the middle of the decade, at the housing bubble's peak, the rise in home values had eclipsed all booms dating back a century and then some. Not even the postwar boom could touch it. And with this explosion in value, homes were leveraged to the hilt, for reasons both intelligent and frivolous—a new kitchen, a vacation, other debts.

In this market, reckless loans and poor decisions had few consequences. The market was hot enough that the high-interestrate traps waiting to reset after two or five years seemed like empty threats, since a home could be refinanced or sold before the trap sprung. The same held true for homeowners who fell behind in payments. And if a bank did eventually repossess a home, they could usually sell it for more than the loan itself. So foreclosures didn't linger. For every home lost, odds were that a buyer—new parents looking for a first home, an investor looking for a rental—could be found in a matter of weeks.

Then, in late 2005, the market crested. Buyers paused. Building slowed. And the break in momentum was just enough to reveal how precarious all that wealth had been, since the housing market slowed only briefly before collapsing altogether. Upside down and underwater— owing more on a home than the home is actually worth: Once stigmatic phrases, these became contagious in 2007. The convoluted, spring-loaded mortgages and home-equity loans taken out in the early 2000s had reset. Rates skyrocketed. Homeowners who'd borrowed so heavily against a phantom value now found themselves trapped in houses worth less and less every day. Even after foreclosure, the prices kept dropping, and as the price of a foreclosure dropped, so did the value of the houses around it, a viral depreciation that led, in some cases, to entire blocks of families owing more on their mortgages than the homes could be sold for. To quantify it: In a little under two years, between the peak of Tampa's housing market, in July 2006, to the spring of 2008, the value of homes in the Bay Area's counties (Hillsborough, Pinellas, Hernando, Pasco) dropped by over 26 percent, reflecting a panic nearly equal to the pace at which prices had reached their summer peak. The hysteria that had inflated Florida's real estate bubble was simply a primer for the collapse that followed. The 5 percent rule had been reversed with a vengeance.

By the spring of 2008, when I returned home to work and write about the crisis, buyers had long since disappeared, and houses by the thousands—both new and old—sat empty, beginning their slow corrosion. The crowds that once camped outside subdivision gates, hoping to snatch a prime lot, had evaporated, and the subdivisions were devouring their own value: Homes built in 2006 had been repossessed within a year and were now selling for half as much as surrounding homes, finished just that summer. Some homeowners, exasperated, were simply walking away from their debt, mailing the keys to the bank. Others barricaded themselves in and waited.

And the foreclosures kept coming. What had been a rotation of about fifteen houses to inspect on my father's list had swelled to eighty, and hovered there, no matter how many were fixed up and sold again. If Mena couldn't move a foreclosure, it was assigned to another agent, or was tossed into one of the massive auctions that blared through town every season like a circus. Of course, champions of the free market, my father among them, argued that the market would, in due time, and in typically robust fashion, correct itself. For the rest of us the question had become, At what cost? What amount of carnage would be required?

And while the Treasury weighed its billion-dollar pledges to the institutions that had engineered the biggest economic collapse since the Great Depression, the statistical damage on the ground was giving that comparison some weight: Between the time Florida's housing market began to cool off in 2005 and my arrival there in the spring, the rate of homes being lost had quadrupled, to more than 35,000 per month, nearly 5,000 of which were in cities within my father's working radius—Tampa, St. Petersburg, Clearwater. The collapse was surreal in its proportion, biblical in its egalitarian reach, like an economic cleansing fire.

Which meant that all spring, we were flush with work.

From the book EXILES IN EDEN: Life Among the Ruins of Florida’s Great Recession by Paul Reyes. Copyright 2010 by Paul Reyes. Reprinted by arrangement with Henry Holt and Company LLC.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.