OAKLAND — They shut off the water at Ida Hancox's duplex just before Christmas, when she was doing her holiday cooking. The utility man who did the job brusquely told her to pay her bills.
But Hancox and her fellow building tenant had done so. Utilities were included in their rent, which was up to date. Such costs had been the responsibility of the landlord, who had skipped town after the lender foreclosed on his loan.
Hancox and her neighbor Kim Isaac-Ray, a mother of eight, told a Bay Area utility committee Tuesday that they believe that the lender stopped paying the utility bill knowing the water would be turned off -- as a way of trying to push them out of the building despite local laws preventing their eviction.
Area activists agree, and say low-income renters who have the right to remain in their homes are increasingly being harassed in foreclosure proceedings by lenders eager to be rid of them.
Oakland is one of a number of California cities that offer tenants stringent protections against eviction, even in the case of foreclosure. But advocates tracking the mortgage crisis say such illegal attempts at eviction have been on the rise statewide.
"We hear it a lot anecdotally," said Kevin Stein, associate director of the nonprofit California Reinvestment Coalition, which promotes access by low-income state residents to financial services. "It's a terrible situation for families."
Just ask Hancox. "We're human beings with families; we pay the rent on time and are respectful of the properties where we live," said the 50-year-old San Francisco healthcare worker. "It's too easy for these banks to pick on us."
San Francisco's utility company has avoided the problem of service shut-offs for tenants whose rent includes utilities by going after the owners -- including lenders managing foreclosed properties.
On Tuesday, officials of the East Bay Municipal Utility District, which includes Oakland, took the first step toward ending such tactics. The board's finance committee agreed to a moratorium on such water shut-offs while the agency explores ways to hold property owners and lenders accountable for utility bills during foreclosure proceedings.
The three-member committee voted unanimously to draft procedures that would include property liens and even lawsuits to hold owners and lenders accountable. The full seven-member utility board is expected to vote on the matter later this month.
"If we go after the lender, it's a way to stop them from putting the money in some big CEO's pocket," Chairman Frank Mellon said. "If the property lien doesn't work, we can go after them with a lawsuit."
The number of water service shut-offs by the East Bay utility on multifamily dwellings climbed to 543 in 2007, up 65% from the previous year.
Activists with the nonprofit housing rights group Just Cause Oakland say that they are aware of six recent foreclosure-related water shut-offs in the city but believe that the phenomenon is more widespread.
Isaac-Ray said that after the West Oakland duplex went into foreclosure in June, the Realtor managing the property for the lender offered her $1,000 to vacate and threatened to have the Sheriff's Department evict her family if she did not leave within a week.
Oakland's nonprofit Eviction Defense Center filed a court action on her behalf, and the lender backed off. "But they didn't stop there," she told the committee Tuesday. "They stopped paying the water."
Isaac-Ray said the water was off for a day before she phoned Just Cause Oakland, which contacted the utility on her behalf. The utility turned the water back on and persuaded the lender to resume payment.
Dustin Hobbs, spokesman for the California Mortgage Bankers Assn., attributed such eviction tactics as nonpayment of water bills to "some bad apples."
"The strict laws in places like Oakland and the fact that this could expose companies to costly litigation are two big reasons why more legitimate lenders wouldn't use tactics like this," he said.
Throughout the state, those who are watching the effect of foreclosures on tenants believe unscrupulous tactics are common. At the very least, lenders eager to push out tenants are offering "cash for keys" without informing tenants of their legal right to stay, particularly in cities with tough tenant protections, they say.
Bob Erlenbusch, executive director of the Los Angeles Coalition to End Hunger and Homelessness, said one local facility, Shelter LA, had seen a dramatic rise in onetime renters "who through no fault of their own were put out on the streets." He said many had their utilities shut off by owners or lenders trying to drive them from their homes during foreclosures.
An analysis of mortgage data by the California Reinvestment Coalition estimates that at least 20% of properties in foreclosure are likely to be inhabited by renters, although lenders believe the figure to be higher.
Most efforts by public officials to assist those trapped by foreclosure have focused on owners, not renters. But this week state Sen. Don Perata (D-Oakland) plans to reintroduce an urgency measure that failed last year. The measure includes such protections as giving all tenants in the state a 60-day notice of foreclosure-related eviction and fining lenders that don't maintain properties.
Stein said the East Bay utility is already setting a strong national example. If the full board votes to crack down on lenders, it would put the agency "in a leadership position on a really significant issue that is only going to grow in importance in the next few years."
At Tuesday's utility committee meeting in Oakland, committee member Andy Katz said poor families were suffering without protections.
"When the water gets turned off, people can't flush the toilet, they can't cook spaghetti for their kids," he said. "They can't take a shower."