Foreclosures Increase Homelessness [Housing Tracker]

Quote of the Day 

"Too often today's seller-funded loan is tomorrow's foreclosure." - Howard Glaser, a mortgage-industry consultant and former official at the Department of Housing and Urban Development, about the FHA-backed no-money down loans that replaced subprime loans and are still prevalent.  (Wall St. Journal, June 24^th)

Foreclosure Data

New Faces Join Ranks Of Nation's Homeless.  “Thousands of both former homeowners and renters are winding up in shelters... National Coalition for the Homeless: Nearly 61% of local and state homeless coalitions say they've seen a rise in homelessness since the foreclosure crisis began in 2007. NCH study: When asked where they're headed once their property is foreclosed on, 76% of displaced homeowners are moving in with friends/family… 54% are moving to emergency shelters… 40% are already on the streets. Those facing homelessness include… middle-class families… The Salvation Army is reporting a surge in demand for homeless services [and] it's seeing the trend in middle-class enclaves.”  (USA Today, June 26^th)

Foreclosure-Rescue Legislation Stalls In Senate.  “A foreclosure rescue plan that has broad bipartisan support stalled in the Senate yesterday amid a dispute over taxes. Democrats and many Republicans were pushing for quick approval of the bill, which would let the government back $300 billion in new, cheaper mortgages for homeowners facing foreclosure... But negotiations to complete the measure hit a snag over a bid by Senator John Ensign, a Nevada Republican, to add a $6 billion package of tax breaks for renewable energy producers. The incentives have bipartisan backing, but House Democrats oppose including them without balancing them with tax hikes to prevent increasing the deficit.”  (AP via Boston.com, June 26^th)

Approval Is Near for Bill to Help U.S. Homeowners.  “The Senate package [includes] a rescue-refinancing plan aimed at stemming the tide of more than 8,000 new foreclosures a day that lenders are filing across the country. The plan would allow distressed borrowers and their lenders to stem losses by allowing qualified owners to refinance into more affordable, 30-year fixed-rate loans with a federal guarantee… [Also,] first-time buyers would receive a refundable tax credit of up to $8,000, or 10% of the value of a home, on purchases of unoccupied housing… The bill would permanently increase to $625,000, from $417,000, the limit on loans Fannie Mae and Freddie Mac can purchase from lenders.”  (NY Times, June 25^th) 

Jazz Vocalist Faces Foreclosure In Seattle.  “Jazz vocalist Ernestine Anderson is facing foreclosure on her home in Seattle… Anderson, who once sang with the likes of Quincy Jones and Ray Charles, is more than $30,000 in arrears in payments and penalties, public records show… Anderson got a loan that now asks for a monthly payments of $5,000. Carmen Gayton, a friend of Anderson's family said. Anderson's monthly income is $1,000 from Social Security, and at her age, her performances are limited… RealtyTrac: More than 200 houses face foreclosure in Anderson's zip code.”  (AP, June 25^th)

Study: Subprime Mess Hits Blacks Harder.  Ohio: “Center on Urban Poverty and Community Development at Case Western Reserve University study: “Subprime home loans are responsible for an outsized share of recent foreclosure filings in Cuyahoga County. Those loans are preying particularly on black borrowers and afflicting black neighborhoods… Black borrowers defaulted at a rate of 28% in 2005 and 24% in 2006 — more than any other ethnic group — and more than three times as often as white borrowers, who defaulted on nearly 8% on 2005 loans and 5% on 2006 loans… Among high-income people, 60% of the loans to black borrowers were subprime despite their income levels.”  (Crain’s Cleveland, June 24^th)

Cuyahoga County Foreclosures: 84 Percent Are Subprime Loans.  “Case Western study: Higher cost subprime loans were responsible for 84% of foreclosure lawsuits filed in Cuyahoga County during 2005 and 2006… The study found that the origination of a subprime loan was the biggest factor in determining whether a foreclosure filing would result. The race of the borrower was the second-biggest factor, said the study's lead researcher, Claudia Coulton.”  (Cleveland.com, June 23^rd)

Foreclosure Scaling The Economic Ladder, Overtaking More Of Those At The Top.  “Throughout the nation, upper-middle class people and those further up on the economic ladder are finding themselves in the surprising position of fighting to keep their homes, with an increasing number even losing their homes… Newsday: One Westhampton Beach home caught up in the foreclosure process has a mortgage of $1,100,000 and a market value of $572,700. Another, located in Clover Grass Court, Westhampton, has a market value of $848,000. However, the amount owed on that home is $1, 270,500.”  (Blogger News Network, June 23^rd)

Local Housing Crisis.  “Indiana: Fort Wayne-Allen County Comprehensive Plan joint study: Between 1990-2000, there were 15,689 new households added to Allen County’s population. But there were more than 21,000 building permits issued.  Many of the houses sold were paid for with loans the buyers couldn’t afford: In 2005, at least 1,555 houses were sold in sheriff sales after foreclosure. In 2006, that number grew to 1,808 sheriff sales. And in H1’07, there were 1,065, and the trend shows no signs of slowing. That’s nearly 5,500 sheriff sales in three years; there are about 139,000 housing units in the county.”  (Journal Gazette, June 22^nd) 

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Comments

[notsosmart]

it seems lots of people should not have been in the outsized houses the lenders allowed them to buy. i live in a 1400sq. house that i paid off in the 20th yr.of a 30 yr mortgage. now im supposed to help folks who made a bad choice? capitalsm???

[ironist15]

From homeowner to homeless shelter resident? If you can't make your $2,500/mo mortgage payment, you can't afford $700 a month for an apartment either? I don't believe it. Sounds like "activist" lies from the same people who invented the statistics in the 90's about "millions" of homeless in the US.

[CLH]

I fail to see how the gov. is helping by letting the people who bought a house that no longer is worth what they bought it for . The smart people will walk and start over. As houses go down they can get a good buy.

However, I know most would rather buy at the top then at the bottom.

[simplesimon]

There's a significant consensus that a bail out for the imprudent borrower is unjustifiable. We need to face the fact that you wind people up and they clamor to 'one up' the other guy with conspicuous consumption. And add to that that mix - that there is a generation of baby boomer offspring who have never experienced a deep and prolonged recession ( thus -boy were they blindsided-but it is still their fault ; ignorance of the law is no excuse in court; likewise ignorance of the inevitable waxing and waning of an economy is no excuse either! ) To recap: we have a generation of ignorant status seekers who need welfare. I would not be so hard on this generation, but this is the generation that bought into the notion that they 'evolved' into a superior state of being! And these same folks see utterly no connection between a steepening decline in morals and business integrity - vis: millions made selling viciously gratuitous sex and violence displayed in "Grand Theft Auto" games...meaning this generation amuses itself with unbridled lust and avarice...deadly sins, remember? And how about gambling now ubiquitous...one can stop at the local stop and go, and gamble...mostly the poor and willfully ignorant of such lofty matters as remote probabilities of winning. Need I mention ubiquitous porn - which formerly was a seedy store, with trench-coated men sporting thick black framed sunglasses...now teens can tap in to it day or night-while their parents are working two jobs each. And we wonder why Islam calls us "The Great Satan"? And we wonder why tens of thousands of homes are wiped out in weeks long weather disasters? Is anyone listening, is my only question. If you want to see the consequences of all the above spread out over 7 generations, check out the book of Judges...there's a reason it was written. It illustrates clearly, the pattern of a nation in repeated steep decline.

There is some good...like Extreme Makeover, Home Edition....but it is not enough. I predict the decline will continue, and so will tens of thousands of homes wiped out in foreclosure and/or natural disaster. I strongly suggest you select the candidate who will address "Conduct Unbecoming an American". Stop being the great Satan, and you might be surprised how quickly everything improves.
I fully expect mockery. Go ahead with your cheap agnostic shot.

[still renting]

I could not afford a reasonable home last year so I rent. Meanwhile, I also got nailed by the AMT. en.wikipedia.org/wiki/...

So the IRS considers me rich, but I cannot afford more than a tiny three bedroom rambler in a bad neighborhood. Hmmm

[still renting]

Simple Simon, I can see by your post that you and I agree to the point that we are redundant. I agree with EVERY SINGLE LINE of your post to the point that anybody who knows me would think I signed on as you and posted that.

I will add that I wonder of late if Revelation 17 and 18 are referring to the US. And I take particular notice of Revelation 18: 4,5

[hanson001]

Expect mockery Simon? Certainly no thinking man would mock what you have just written. As I interact with our culture, the empirical experience is just what you said. Well written brother!

Too bad most do not look to the Bible for wisdom. Like it says, "without wisdom the people perish."

[Plantinseeds]

Those of us that believe no whats coming. But IMHO 98% of the world does not.
It's that 98% that has created this mess. Also IMHO the U.S. gov is 100% in perpetuating this mess.

You are right Simon, even my generation has not really had to deal with harsh economics. Born in 1960, grew up low middle class and have made it to middle class. I feel extremely blessed to have my home paid for, especially since we are only 1 income now.
The state in which I live does not have a lottery (yet). Every state surrounding us do. The secretary of this state is getting sigs to put lottery on November ballot saying it will bring in much needed revenue and add jobs here. That is a lie. The state should stay out of gambling!