When Foreclosure Threatens Elder-Care Homes

By LAURIE UDESKY

Published: April 16, 2010

In September 2009, Sgt. Rick Turini of the Santa Clara County Sheriff's Office drove to a house in San Jose to carry out a court-ordered eviction.
With foreclosures in Bay Area counties near all-time highs, the office had been routinely evicting 35 to 40 households a week. But this property was different: It was a board-and-care home for the elderly.
Neither the residents nor their families had been warned about an eviction, said Sergeant Turini, who does not recall the home's exact address.
When he arrived with his partner, the house was still occupied, and the distraught daughter of an elderly bedridden woman was struggling to get her mother into a car. A couple of teenagers doing homework in the living room looked up at the officers in shock.
"We got a call from Adult Protective Services letting us know that the house we were evicting had four or five bedridden residents, and the guy was ignoring the eviction notice," Sergeant Turini said, referring to the owner. "I couldn't believe it had gone this far."
He said the sheriff's department worked with agencies to arrange for the fragile inhabitants to be transferred to other facilities or sent home with relatives.
"Here at the sheriff's office we're not going to put a person who can't take care of themselves out on the street," the sergeant said.
Because of a loophole in the law, owners of residential-care facilities for the elderly - who often double as administrators - do not have to tell their residents or the residents' families if they miss mortgage payments or are on the brink of foreclosure.
An analysis of data by The New York Times shows that more than 100 elder-care homes in the Bay Area were under foreclosure in the last six months, and that as many as 700 residents - who often need help with bathing, eating and other daily activities - may have faced eviction.
At the time they are licensed by the California Department of Social Services, owners of the homes are required to show enough financial wherewithal only to cover three months of operating costs. Unless complaints are made to the agency, current law requires that these homes be visited only every five years.
"Who is minding the shop?" asked Anthony Chicotel, a staff lawyer with the California Advocates for Nursing Home Reform, which is cosponsoring legislation to increase protections for elderly residents in these homes. "The law doesn't really say. There's no obligation for them to do anything if they fall into financial distress."
This means residents, their family members and even the staff providing care may not find out about a property's financial troubles until they see an eviction notice or a sheriff at the door.
Armed police officers could forcibly remove residents from their homes "without any notice, without preparation, without any arrangements for an alternative residence," Mr. Chicotel said. "Not only are they losing their home, but they are losing the services that allow them to live."
Tippy Irwin, executive director of the Ombudsman Services of San Mateo, said this trend of ousting elderly residents without warning was "unprecedented." Her office has handled eight foreclosures of elder-care homes in the last two years, and few owners gave warning to residents or their families.
Ms. Irwin said her staff had to scramble to find new places for the residents.
"In one residence, we got wind that the sheriff had issued a three-day notice to move people in the house, and that was a Friday," she said. "We had to move them all in one day. It's not the way it should happen."
"Every one of these owners has been in denial," Ms. Irwin continued. "They themselves are going through hell. They're losing their homes and their businesses. Not one of them has acknowledged what's happening."
Brenda Wing experienced this denial first-hand in February when she went to visit her 84-year-old father in the Northstar Manor care home in Woodland. When she arrived, Ms. Wing said, there were three papers stapled to the door that said the house was going to be sold at auction. She called Stephanie Khan, the administrator, and was told that it was a misunderstanding, that the owners were refinancing.
Then, on April 7, the sheriff served an eviction notice, Ms. Wing said. She called again, and Ms. Khan again said it was a misunderstanding.
Then, Ms. Wing said, the conversation turned ugly.
"She was really angry and said, `You're asking me about personal finances!' " Ms. Wing said. "I said, `No, I'm asking you if my dad is going to be put out on the street!' It was such a hideous conversation that I had to hang up."
Ms. Khan confirmed the conversation and the posting of the eviction notice, but said that a loan modification was being negotiated and that the bank had lost the paperwork.
"I wouldn't tell her about my mom's financial business unless it affects the residents," Ms. Khan said, "and the loan modification attorney said that it won't affect the residents."
She refused to identify the loan modification lawyer, but said that if she and her mother had been told to evacuate the premises, she would have told the residents and their families.
"I would tell them to find alternative housing and give them enough time," Ms. Khan said.
Records from DataQuick, a firm that tracks 83 million properties in the United States, show that Northstar Manor was foreclosed on and is now owned by Wells Fargo Bank. Kevin Waetke, a Wells Fargo Home Mortgage spokesman, confirmed the bank's ownership, but said that as soon as the bank learned it was a care facility with elderly residents, it delayed the eviction.
"We are working closely with the families and have assured them that we will provide all the time they need to relocate the residents in appropriate housing, however long it takes," Mr. Waetke said.
Alexandra Morris, a gerontologist working with the Alzheimer's Association of Northern California, said that many occupants of these homes had dementia, and that an abrupt change could cause severe anxiety and decline known as transfer trauma.
"People with dementia focus on familiar people, and familiar aspects of an environment," Ms. Morris said. "That's their anchor, and they can quite literally feel adrift when they have to move."
Agencies that oversee these residential-care facilities for the elderly - which typically house up to six patients - have no reliable data on which homes are threatened with foreclosure or have closed because of it.
But a New York Times analysis of licensing and foreclosure data indicated that about 16 percent of the 1,600 Bay Area properties licensed as small residential-care homes has been in some stage of foreclosure since June 2006. According to RealtyTrac, a company that compiles foreclosure records, that includes more than 100 homes under foreclosure in the last six months.
It is impossible to tell from the data how many of these were operating as residential-care homes during the foreclosure proceedings or thereafter. But those properties housed as many as 700 elderly residents.
Thelma Tan's elder-care home, April Garden, in Saratoga, was among the properties in foreclosure on a list RealtyTrac updated April 4. Ms. Tan said she worked out a deal with her lender on April 5 and defended her decision to keep staff and residents in the dark.
"There's no need to alarm the families," she said. "Of course, if something drastic was going to happen, we're required to give them notice."
Charles Skoien, Jr., director of the Community Residential Care Association of California, said he was unaware of the spate of foreclosures and evictions in elder-care facilities. He said the licensing agency should be in those facilities long before "something like that is going down."
Asked about legislation that would tighten requirements, Mr. Skoien said: "I think we have adequate regulations now. I don't think we need more."
State Senator Mark Leno, Democrat of San Francisco, has introduced legislation that would make it less likely that the elderly residents in these care facilities would have no warning of a pending foreclosure. It would require people licensed to run such facilities to notify the licensing division of the Department of Social Services and the residents or their legal representative within 24 hours of notification of foreclosure, bankruptcy, missing a mortgage payment or the prospect of a utility cutoff.
The bill would also fine owners who failed to do so $100 a day, and permanently disqualify them from operating elder-care homes in California. A vote on the measure is not expected before June.
Ms. Irwin, the San Mateo ombudsman, hopes it will pass.
"We've had a terrible time in this county, and we kicked up a storm," she said. "We need these protections in the law."

http://www.nytimes.com/2010/04/18/us/18sfforeclose.html?_r=1&pagewanted=2&ref=elder-care

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