The first time Carey Mitchell saw her, Tammy was standing at an intersection near the 16th Street offramp from Highway 99. Her clothes looked dirty, her face tired. She held a cardboard sign asking for spare change.
Without thinking, Mitchell pulled her car to the side of the road. In an instant, Tammy was at her window. Mitchell rolled it down. "Do you need a place to sleep tonight?" she remembers asking. On a scrap of paper, Mitchell quickly sketched a map to a house a few miles away. It was Mitchell's house, but she didn't want it anymore.
She had decided to stop paying the home's mortgage. As she walked away, she handed the keys to Tammy, who stayed for three months before she was formally evicted this May. The nights Tammy spent there were the first she'd slept inside in more than three years.
When homes fall into foreclosure, former owners who won't leave on their own are kicked out. The houses stand empty until banks sell to new owners -- at least that's the way it usually worked before the foreclosure crisis.
But in its wake, a lot has changed. These days, it's not uncommon to find foreclosed homes occupied by squatters, including homeless people, evicted former owners who move back illegally, and opportunists looking to live rent-free for as long as they're able. Some are invited by people leaving the homes behind. Others aren't.
Along with loan modification firms and a host of new industries that have sprung up around the mess, such as foreclosure cleanup services, foreclosure squatters are among the few beneficiaries of the bust. Emboldened by the sheer number of vacant homes and the months that many of them go unsold, the squatters have become a nationwide phenomenon.
And in Merced, where the foreclosure rate remains higher than anywhere else in California, they seem to be a growing population.
In Tammy's case, the foreclosure was an older one-story on Sonora Avenue. Mitchell, a real estate agent from Redwood City, had happily scooped it up as an investment property at the height of the housing boom in 2005. But by the time she met Tammy this spring, she was angry. She owed way more on the house than it was worth, and she claims the former owner, who financed the deal himself, had concealed evidence of roof damage.
Mitchell was in town to try one last time to get him to take the house back and undo it all. He refused. So she stocked the fridge, dropped off a few towels and some dishes, then transferred the utilities to Tammy and gave her the keys.
"I said, 'I'm done,'" Mitchell recently explained. "I wrote Tammy a note saying she had a right to be there, and then I walked out the door."
Of course, no one tracks how many foreclosure squatters have been discovered here. But local code enforcement officers, real estate agents and police said they encounter them regularly.
Kelly Roseman, a code enforcement officer with the city of Merced, estimated that she comes across inhabited foreclosures at least twice a month. She said most instances involve squatters who would otherwise be homeless, though she's also met families who've moved into foreclosed properties simply to avoid paying rent.
She recalled one case in which a family abandoned a home on Eighth Street in South Merced, then gave their keys to friends who'd been renting elsewhere. "They basically said, 'Ride it out as long as you can,'" Roseman explained. "(The friends) put the PG&E (utilities) in their name, they moved their stuff in, and when they got a notice saying the water bill hadn't been paid, they came in and paid it."
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Audio slideshow: An interview with a squatter 
