The last time neighbors saw her alive, 65-year-old Phyllis Walsh was walking her dog, Arnie, as she did nearly every day. But Walsh's life was in turmoil. Her husband, a factory worker named Jerry, died in 2009, and Walsh had struggled to pay the mortgage on the small white bungalow in South Seattle that she was now solely responsible for.

"When he passed, it was very hard on Phyllis," says Joell Rhyner, who lives across the street. "But she was active, trying to go out and do things."

Walsh, who was retired, had been trying to refinance her mortgage so she could keep the home. Still, Walsh had not been able to stave off US Bank, which, according to King County property records, was trying to collect more than $15,000 in past-due payments and had sold her home at auction.

On the evening of Tuesday, July 30, Rhyner saw a police car in front of Walsh's home. Walsh had fired a single pistol shot into her head, killing herself, in the front yard. A note pinned to her shirt mentioned the "foreclosure vultures" were coming.

The note began mundanely:

About the stuff
The foreclosure people will be here on thurs. they may or may not be reasonable. So, any trinkets, mementos, art Whatever should be removed quickly. Any thing too large, heavy, cumbersome or difficult let the foreclosure vultures handle...
Except for a hard decision, the last couple weeks have been filled with wonderful days, each of them perfect. Family, Church, friends, music, Arnie, enjoying the back yard...
Everything is in a terrible muddle, the house got foreclosed
While I was in the middle of a refinance (!) jeez
Jerry's been gone four long years and I'm not
Doing so well. This is too hard to do alone.

The family had to race against the eviction. Walsh's niece Brenda Fasoli, who provided a copy of the note to The Stranger, says she got the news from her mother that evening. "She just said, 'Your aunt's dead. We have to go to the house today and sort things out. The bank is taking the house tomorrow.'

"They sold the house out from underneath her," Fasoli says angrily. Walsh had a huge record collection, "all kinds of Beatles and Rolling Stones." The neighbors came over to help move out the music as well as a piano.

Walsh's death is just one piece of a Seattle-wide epidemic of foreclosures affecting more than 20,000 homeowners long after the housing crisis sent the country into a recession. A combination of state and federal foreclosure laws were written with the spirit of encouraging banks to negotiate with homeowners and let them keep their homes—but those laws are effectively a Swiss cheese of loopholes.

City lawmakers have been considering new options to help people like Walsh before the burden becomes a crisis. But it's not clear the will exists at city hall.

Walsh was born on November 15, 1947. She grew up in the little white house, which was built three years earlier, with her mother, who lived there until she passed.

In 1978, Walsh married Jerry, who was later disabled in a medical operation gone awry. At some point, the two of them were living on retirement and disability payments. He died four years ago following complications from heart surgery, family members say.

Walsh always stood out, with her bright red hair and unconventional fashion sense. All six people interviewed for this article remarked on the same qualities: She was smart, well-read, musical, sweet, and kind. She gave her friend Sandy guitar lessons and brought her neighbor's daughter books from the library. One next-door neighbor calls her "life-affirming."

Being life-affirming, though, doesn't pay the bills. Those close to her say Walsh lived frugally, but it was clear she was struggling. Her neighbors say they'd bring her extra food. Walsh didn't have money to fix her car, so she took the bus everywhere.

Walsh and her husband had purchased the family home in 1992, King County property records show. It appears they took out two mortgages in 2004 and 2006 with US Bank and Countrywide Home Loans, respectively. They fell $15,000 behind on the first loan and defaulted last year (I could not track down records on the second loan). US Bank signed her mortgage over to Bishop, White, Marshall & Weibel, a firm that carries out foreclosures, the records say.

The home was sold off at auction earlier this year. "We offer our sincere condolences to the family," US Bank says in a statement, and adds that for customer confidentiality reasons, it can't respond to questions about whether Walsh was in the midst of refinancing her mortgage.

The real estate agent who purchased and is now selling the home, David Albers, says he thinks about Walsh often. "In my business, we're pretty hardened, and sometimes we forget that this is people's lives we're dealing with," he says. "We are the foreclosure vultures, in a sense... But I don't think the problem lies with us. After the bank auctions it off is where we come in."

"One of the harder parts is that she didn't reach out to any of us and tell us what was going on," Fasoli, her niece, says. "I think that's because she was trying to do something about it, she was trying to refinance. She was trying to work with the bank to find an alternative to foreclosure."

From the papers the family looked through, including Walsh's journal, Fasoli says it looked like the bank "passed her from specialist to specialist," and the last specialist wouldn't return her phone calls or the number wouldn't go through.

People should pay their mortgages, Fasoli says. But, she adds, "small town relationships don't exist anymore, where you can go to your banker and say, 'Listen, I'm sick, or you know, I lost my husband.'"

More than 20,000 Seattle-area homeowners—17.4 percent of all households, according Zillow's data—are underwater on their mortgages, meaning they owe more than the property is worth. The figure rises to 28 percent for the Seattle metro area.

"Seriously—20,000 people are underwater on their mortgages with the possibility of being foreclosed on," says Seattle City Council member Nick Licata. "That's a real problem." People lose their homes, he says, which contributes to homelessness and neighborhood blight.

The city council commissioned a report, released last month, that suggested the city use eminent domain to buy up homeowner debt—also known as "principal reduction"—across the city. This is in the public interest, the report says, because so many of the loans were fraudulent to begin with, and homeowners have not been able to get meaningful relief. Licata says he supports any legal strategy to achieve principal reduction.

Richmond, California, became the first city in the country to approve just such a plan this summer. Last month, a judge tossed out a lawsuit against the eminent-domain strategy by Wells Fargo and Deutsche Bank.

Evictions of homeowners like Walsh are dispatched with quickness and totality. Can policymakers muster the same urgency to protect citizens?

"I honestly believe that the majority of the council is concerned," Licata says. "The question is what they feel comfortable doing about it." recommended