Currently, the United States has seen more than 5 million foreclosures completed. My expectations is that we are about halfway through the working off of the ill-advised and financially untenable home purchases of the past decade. Meaning, we likely have another 5 million foreclosures to go.That number is so big it is hard to conceive. That represents something like 40 million people dispossessed of their homes. That has created a great internal migration of homeless in the US.
Some other housing analysts think that number is too modest, and forecast millions more foreclosures. Housing expert Laurie Goodman, for example, noted in April that we maybe could have 12 million more foreclosures before the housing cycle has run its course.
What really saddens me is that Obama and the US Congress are still playing like Herbert Hoover. You know, pretending that things are gonna be OK. George Bush was the court jester whose ideological "the only good government is no government!" and "deregulate, deregulate, deregulate!" created this disaster. But when the A-team was elected in November 2008, there was an expectation that they would hit the ground running and put the fires out and make things whole. They haven't. They've dithered. Obama blames the Congress. Congress blames Obama. The Tea Party fruitcakes blame government. It is just plain a mess.
Instead of a 2 year recession with a year or two to get back on their feet, this is now a Great Recession with a lost decade, a whole generation of young people who will be underemployed and underpaid their whole lives, and the tail end of the Baby Boom generation has been involuntarily "retired" with insufficient nest eggs. A disaster!
2 comments:
When the foreclosure notice arrives in the mail, many homeowners simply give up. After all, when you are behind on your mortgage payments, there is no other option, right? The truth is that there are options other than simply giving up and letting the foreclosure happen.
Dokemion: There are two ways to look at this. Yes, it would be good for society and even good for a person's integrity to fulfill the mortgage obligation. On the other hand, corporations teach us that a contract is "just a piece of paper" to be broken whenever a "better deal" comes along. So, do we play by the rules of justice and social obligation, or the rules of "rational economics" where it is every man for himself!
The site you point to looks OK, but I wonder... If it was a mortgage broker who helped you sign up for a NINJA-type mortgage that has now gone sour, what are the chances that this broker or another like him will now sign you up with a "remediation" service that won't pick your pocket? Once bitten, twice shy!
The reality is that the US has created a nasty economic storm by swallowing the "deregulation" philosophy of the radical right. The mess is slowly being unwound. Many peoples lives are messed up. And, as usual, the slimy people -- those out for Number One! -- are at the forefront of doing the most despicable actions to untangle their lives.
In real life, nothing is simple. This mess has no easy solution. Each person with a mortgage that is under water has to make their own decision. Like I say, I'm all for the right moral choice of standing up to your obligations, but the corporations -- in this case these second chance mortgage brokers & "advisors" -- may just be taking you for a fool for a second time. I would be looking for a "non-profit" that has no backing by any big financial company to give me advice.
Canada avoided a housing market meltdown because the government here didn't buy into the "no money down" mortagages and the banks didn't get into the "fantasy mortgage" game where they securitized mortgages and sold them off to suckers further down the line. The US really needs to re-regulate. Sadly, I see Obama dragging his feet. He -- and the Democratic party -- has taken too much money from the financial industry to seriously restructure it. (I criticize Obama, but the Republicans are completely anathema... they are the ones who created the problem! I'm shocked that they are resurgent in the polls. Are US voters that stupid?)
I sure hope the US gets out of its mess soon, but if you follow the Calculated Risk blog, you will be aware of how deep a hole the US has dug for itself and how painfully slow it will be to crawl out of it.
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