Fifty-five years ago, Dora Slack moved into a modest home in the Central District with her husband and six children. Back then, almost 80 percent of the residents in the neighborhood were Black. Down the street, Garfield High School had just become the first high school in Seattle where students of color made up more than half of the student body.
Fast forward to 2010: after a scare with her mortgage payments getting lost by the bank, 85-year-old Dora signed a reverse mortgage on her home, not fully understanding the details. The year prior she’d been diagnosed with dementia.
Today, Dora and the children and grandchildren who share the house with her are among the last Black families on their block. In the midst of a building bonanza and big changes in the Central District, they fear they could lose the house at any time.
Reverse mortgage woes
When I arrived at the light blue house overlooking a newly repaved 23rd Avenue — what known simply as “Mrs. Slack’s house” around the neighborhood — the front door was wide open. Dora Slack was sitting in the kitchen, her eyes glued on the TV screen.
I’d been expecting a crowd. I was there by invitation to join a meeting between the Slack family and the non-profit organization Standing Against Foreclosures and Eviction (SAFE).
Mrs. Slack shooed me away to the living room, where her grandson Sean was. I was quickly told not to talk to her at all, but to Sean, who now holds her power attorney. There’s a good reason for this.
As the family tells it, ten years ago, Bank of America sent Mrs. Slack a mortgage delinquency notice. She couldn’t understand why, since she’d been making all her house payments on time using money orders. Her family later found out that the bank had “misplaced” the money orders, and hadn’t cashed any of them — so they thought the loan was delinquent.
The bank called Mrs. Slack and offered to help her get out of trouble. She was 80 years old and couldn’t travel, so a representative came to her house. Her son Donald was there when they arrived, but soon left to go to work.
By the time he came home from work, he says, Dora had signed a reverse mortgage that added substantially to what she owed on the house. Under the terms of the agreement, when Dora dies, the Slack family has 30 days to come up with that money or the house is no longer theirs.
“We’re trying to figure out, how did it get so out of control like this. And they’re taking advantage of my grandma,” said Sean.
Reverse mortgage, a loan program available only to those 62 years old or older, lets the homeowner tap into the home equity — the gap between the amount of money you owe for your home and your home’s fair market value — to get cash out of their home. The payments can come in different packages, and are often used by people to supplement their retirement income.
What’s tricky is that after the homeowner passes away, the balance on the loan is due all at once, within 30 days. If the heirs can’t pay the full amount, the bank will start foreclosure procedures and take the house back.
“Everybody makes money along the way. It’s a $10,000 closing cost, who do you think that money goes to?” asks Jean Barton, the president of the board at SAFE. “That’s the reason they’re here trying to get the reverse mortgage, ‘cause they all want a piece of the pie. And the only people who really lose out are the families of the person who dies.”
“A wolf in sheep’s clothing’
Barton said that Mrs. Slack was talked into signing up for the reverse mortgage by a “slick-talking banker” who she calls “a wolf in sheep’s clothing.”
According to Barton, the family believes Bank of America originated the loan and then sold it to another bank. But they don’t know to whom and how many times the loan has been sold. They say they’re still trying to get written documentation, but it appears that the original loan amount has somehow ballooned by over a hundred thousand dollars in just five years, so the family would need to come up with $350,000 to pay it off if Dora passes away.
Meanwhile, according a Bank of America Home Loans Servicing representative Simon Rick, the bank is just an investor on the reverse mortgage loan, which was actually originated by Acceptance Capital Mortgage Corporation. Rick points out that Mrs. Slack’s son Donald signed off as as an authorized third party of the origination of the loan. And he says another company called Reverse Mortgage Solutions is now servicing the loan on behalf of Bank of America.
“In the Black community in general we have a serious lack of education when it comes to real estate, because they’ve only let us in the game 30, 40 years ago.”
A little over two months ago, SAFE got involved with the Slack family to try to help. SAFE is made up of volunteers, most of whom have gone through or are currently going through similar crises with their homes.
Barton said that their game plan is first and foremost to identify irregularities in the contracts. The next step was to hire an attorney. During the meeting, SAFE volunteers and the Slack family talked about fundraising and potentially working with city council member Kshama Sawant to get help.
Barton echoed Sean Slack when she said this all felt like part of a larger plan to further gentrify the neighborhood. According to the U.S. Census Bureau, black people made up 73 percent of the Central District population in 1970. In 2014, the number plummeted to an estimated 19 percent. You only need to take a stroll along 23rd Ave to notice the difference.
“They want the majority of the Black people out of here so they can make it comfortable for others. Fifteen years ago, you wouldn’t see a white person walking down here. I think the only white people living here 15 years ago were the people on the corner right there,“ Sean said.
‘Learning the game’
Mrs. Slack’s experience was pretty common around eight years ago, just before the financial crisis, said Jaebadiah Gardner of OnPoint Real Estate Services. He said that this is one reason that the economy crashed in 2008: people were signing up for mortgages they didn’t fully understand. The next thing the knew, banks owned their properties.
But predatory loans predate the housing crisis, he said.
“In the Black community in general we have a serious lack of education when it comes to real estate, because they’ve only let us in the real estate game 30, 40 years ago,” said Gardner. “White people — and when I say ‘white people’ I mean the dominant culture and the system of oppression — have been buying, selling, flipping, renting real estate since the dawn of time. We haven’t had that luxury. We’ve only been renters for so long.”
According to the University of Washington Center for the Study of the Pacific Northwest, in 1930, 39 percent of the Black people in Seattle owned their homes. According to U.S. Census Bureau, the number in 2010 was back down to 28.6 percent. And by 2014, only one in five Black households owned their home.
Gardner said that the Slack family’s case reflect the reality that Black homeowners have been given shady loans every since they were allowed to buy homes. According to a study done by the Brookings Institute in 2001, Black-owned homes across the board are valued at 18 percent less than white-owned homes.
Gardner said that one piece of the puzzle is education.
“We have to learn the game. A lot of it is this huge education gap that we have to fill and this is one of the reasons why people get taken advantage of,” he said.
Plans to fight back
While SAFE is working with the Slack family to try to get the paperwork sorted out and build grounds for their legal argument, some of the family members are itching to make more noise.
A few weeks ago, SAFE and Slack family hosted a block party in their home with the goal of bringing light to Mrs. Slack’s situation. At one point, family members started freestyling to the beats that Sean’s cousin Roni Maddison, a hip hop artist, was playing. That sparked an idea for them to write and record an album in the house to raise some of the funds to hire an attorney. They even plan to build a company called 817, Inc — named after Mrs. Slack’s house number — and create t-shirts and a website with a backstory of the family.
At the meeting, other family members wanted to go around the neighborhood with a mic and a speaker to bring light about the injustice that gentrification brings, especially to Black residents.
“It’s always nice when you can make your neighborhood better. But people who live there shouldn’t be moved out because they can’t afford it,” Barton said.