Dream Street in Bloomington during the early days of construction for the San Bernardino County subdivision. (Doug McCulloh)
Augie Cortez and his wife, Blanca, bought a little slice of the American Dream about 17 years ago in Bloomington, a working-class community in San Bernardino about 50 miles east of Los Angeles.
Their roomy four-bedroom house was the very first on the block of a brand-new subdivision not unlike scores of others that began carpeting Inland Southern California toward the end of the 1990s.
The Cortezes gathered up their savings and managed to put up a healthy down payment on a 15-year mortgage. After a couple of other home purchasing efforts collapsed, they were eager to make this one stick and they wanted to pay it off fast.
Monthly payments would be high. But the name of the little cul-de-sac seemed like a good omen: Dream Street.
“I thought that was a cool name! I don’t think I’d ever heard of a Dream Street. Have you?" Cortez asks as he sits at an expansive table in the family's dining room.
And for a while, the dream was good.
Augie works in construction as a cement finisher, and when he first bought his home, business was booming in the Inland Empire. After moving his wife and kids into the new house, he had enough extra cash to redo all the cement work along the sides of the house and the back patio.
There’s a family portrait taken the day his three daughters pressed some memories into the wet cement. While showing off his property, he points to the spot just outside a garage side door.
“Those are my daughters' handprints,” he says, beaming with pride. "Man, those are my daughters' handprints right there. Nov. 27, 1999."
Easy Credit Dragged Everyone Down
With so much homebuilding going on, it was easy for just about anyone to get a mortgage back then, even if you had shaky credit or no job at all. Low-income minority neighborhoods like the ones around Dream Street were ripe targets for subprime lenders.
Augie and his wife had a sound conventional loan, but still got dragged under in a housing crisis that would ultimately steamroll through neighborhoods across the country.
"It impacted other people who own homes who were current, and the value of their homes went down," says Edward Pinto, co-director of the International Center on Housing Risk at the American Enterprise Institute, a conservative think tank in Washington, D.C.
“Areas that have a lot of foreclosures and very seriously delinquent loans have an impact on declining house prices, so it spreads throughout the neighborhood,” Pinto says.
In 2006, the last of the brand-new homes on Dream Street sold for about $430,000. Three years later, at the peak of the mortgage meltdown, the same home was worth barely a quarter of that.
It was the same story up and down the block and across the region as the bubble burst on the housing market and people couldn't afford their mortgages. Even people like Augie Cortez, who didn’t have mortgages spring-loaded with dangerous adjustable rates and hidden fees, were dragged down.
Construction work vanished and Cortez's cement finishing jobs dried up.
“I was trying to do the fast payoff and it was like, why did we get into this, a 15-year loan,” he says, recalling the painful days when the family seemed close to losing the house.
“You just look up at the ceiling, what are you gonna do the next day? You don’t sleep at night,” says Cortez grimly.
To put food on the table Cortez sold lumber and other items online. He did odd jobs for neighbors. Mortgage payments got skipped for months. Default notices were dropping into mailboxes across the neighborhood -- including his own.
"Just walk away, that’s what people were doing, just walking away," he says, recalling what it was like then.
"It was weird man, just empty houses. It was sad to see people pack their stuff. But I wasn’t going to do that. Not me, heck no. I would have stayed here until they put that (eviction) tag on my door," he says.
Augie and his wife worked out a deal with their lender. Their 15-year mortgage was extended to 20 years, and the lender agreed to let them make lower minimum monthly payments for a fixed period.
But they were surrounded by the wreckage of the mortgage meltdown. By the end of 2009, half of Dream Street’s original 13 owners had either been pushed out or foreclosed on.
"The foreclosure meltdown swept across this entire area and up and down Dream Street like a tsunami in spring of 2009," says photojournalist Doug McCulloh.
McCulloh lives in nearby Riverside. But his connection to Dream Street runs deep. He’s the one who gave the little avenue its name. It was a prize at a San Bernardino County charity auction. McCulloh says the come-on was irresistible: name a street, minimum bid $25.
"My immediate thought is: It's the American Dream, it's your dream house and so on," says McCulloh.
Then, reflecting on what happened there, he adds, "A nightmare is kind of a dream, too. So dreams can cut in all directions, can be all kinds of things. And it's turned out to be that here on Dream Street."
McCulloh also won permission from the developer to document the housing tract’s rise from plowed-over fruit orchard to model suburbia to ground zero of the mortgage crisis. He got to know the construction workers, the development company and mortgage team, and the residents.
McCulloh tells the story of the last family to move onto Dream Street. They bought near the peak of the housing boom and couldn’t hang on. When the notice to vacate got slapped on the door, they salvaged what they could.
"Somebody showed up, a relative, dug up four palm trees right out of their front yard and hauled them off," recalls McCulloh.
"Two months later they got a family member who had good credit, they bottom-fished the market. They bought a house about a mile away. The palm trees, they planted them at their new house."
On a recent Saturday afternoon, McCulloh catches up with Augie Cortez and his brother, Johnny, on the sidewalk outside Cortez’s home. Neighbor Jerry Williams pulls his pickup truck into his driveway. He waves and heads over.
Williams is a burly long-haul truck driver with a shaggy, graying beard and wide smile. He and his wife Kelley, also a truck driver, moved in around the same time as Cortez and his wife. He complains about some kids that recently tagged a couple of fences. Other than the minor graffiti, all is good here, he says.
"Pretty quiet. You see how it is man," he says, nodding to the tidy cul-de-sac. “We like it, it works for us.”
These days all the houses on Dream Street are occupied. No more busted-out windows or dead lawns; the emblems of the foreclosure crisis.
"I guess it was a dream," laughs Augie Cortez. “Actually got to keep (the house), shoot. That’s what’s good.”
But in a sense it’s a dream half-realized. From his front yard we look across to a pair of large dusty vacant lots.
No houses were ever built on the other side of Dream Street.
It’s undeveloped county land that, at the time the housing tract was developed, was to be the site of a park and library. The developers even dangled the county project as a selling point to would-be home buyers like Cortez.
“So that sounded good for my girls, like 'wow' perfect,” Cortez says.
“And there’s the park and library,” he says, pointing to the vacant land. When everyone looks to see where Cortez is pointing, he drops the punch line.
A San Bernardino County spokesman says the land turned out to be too narrow for a park.
County tax revenue also plummeted with housing values during the housing market crash. There are currently no plans for the empty lots.
“Some people were betting that the bubble would go on, and of course it couldn't,” says photographer McCulloh. “Other people bet against the bubble. So the one thing you can say is there will be another spot where hanging onto the dream gets really, really hard.”
Local real estate experts warn that Inland Empire housing is once again way overvalued, and overdue for a “correction.” Prices have surged to an unsustainable level in the last year, according to Neighborhood Housing Services of the Inland Empire, a nonprofit that helped guys like Augie hold onto their houses 10 years ago.
At the edge of those vacant lots, a sign lashed to a post beckons with a come-on that sounds a little suspicious, given what this neighborhood has survived over the last decade: “Buy a Home, 1% Down.”
There’s no name for a real estate agent or mortgage broker. But there’s a local phone number. I give it a call.
"Hi, this is Emily your friendly real estate professional,” chirps a pre-recorded message.
“Buying a home has never been easier! Here's how it works,” continues Emily. “You put down 1 percent and your lender 2 percent toward your down payment, which puts you on your way to home ownership.”
Emily asks me to leave my number and a good time to call back. I don't. But I do find out more about that sign, and about new trends in home loans that are stoking old fears.