One Million Foreclosures

(Scene from Michael Moore’s “Capitalism: A Love Story.)

A new report predicts more than 1 million American households will lose their homes due to foreclosure:

Nearly 528,000 homes were foreclosed in the first six months of 2010. As lenders work through a huge backlog of borrowers behind on their mortgages, even more home repossessions could occur before the end of the year.

According to RealtyTrac, Inc., a foreclosure listing service, the number of households facing foreclosure in the first half of the year climbed 8 percent when compared to the same time frame last year. In June, 1 in every 411 households received a foreclosure filing.

The fastest growing group of foreclosures involved homeowners with good credit who took out conventional fixed-rate loans. Many of these borrowers have fallen behind in their mortgages due to unemployment or reduced income.

It takes about 15 months for a home loan to go from being 30 days late to the property being seized and sold. Between January and June of this year, about 1.7 million homeowners received a foreclosure-related warning. At the time of this writing, more than 7.3 million home loans are in some stage of delinquency. The states experiencing the highest foreclosure rates are California, Florida, Michigan, Illinois, Arizona and Nevada.

As Atrios points out, the HAMP program has been worse than a failure, because it prolonged the agony for homeowners and most of them lost their homes, anyway. “All carrot and no stick,” as this blogger calls it. (Which seems to sum up the adminstration’s attitude toward bankers in general.)

I was in the neighborhood pizza restaurant last night, and several of the diners were talking about unemployment extensions. Like most people, they’re confused about the difference between next week’s vote on unemployment extension, and Tier 5 benefits — which Congress won’t touch. They’re hoping “someone will do something,” because the alternative is too unthinkable.

The staff is worried, too. The pizza cook is an accountant with three kids who can’t find anything above minimum wage. “When I’ve gotten an interview, I’m going up against people with ten years’ experience and MBAs — for jobs that pay $10 an hour,” he told me. “I just don’t know what I’m going to do.”

And the delivery guy, a former IT programmer, is worried sick about his wife, who has COPD and internal bleeding they can’t locate. They’ve been going to the local federally-funded public health center. “The doctors there are good, but they get a little antsy when you need a specialist,” he said. “My unemployment runs out in September, and she’s the only steady paycheck coming into the house.”

He told me he has this idea for an invention, that when he was working, he invested $1000 in getting designs made. But now? “I need another ten thousand to move forward, and there’s no way in hell I can ever afford that without a job,” he said.

He paused. “Let alone a house. I just don’t know what we’re gonna do.”

And in stark contrast to the burdens carried by these decent, hard-working people, Americans who got the education and prepared themselves to be self-sufficient, stand the just plain mean denizens of Beck Nation. A friend of mine was looking in a store yesterday and told the owner she wouldn’t be buying anything just yet because she was unemployed. The woman started wagging a finger in her face and told her she “shouldn’t be here, you should be out looking for a job!”

“Practically snarling at me,” my friend told me. “Can you imagine?” Yes, I can.

How are we ever going to bridge this divide? You just can’t leave this many people without help, but the politicans are mostly spineless. What is going to happen to us — and to our country?

5 thoughts on “One Million Foreclosures

  1. No, the politicians aren’t spineless. Normalizing permanently higher unemployment is a policy choice that both legacy parties support, as shown by the actions 2008-2010. I think this is still reversible, and/or its effects can be ameliorated, but the issue cannot be addressed in the legacy party framework, because the legacy parties aren’t responsive to the electorate.

  2. So they’re going to own nearly everything sometime soon. But what are they going to do with it? Trade it amongst themselves — back and forth, packaged, sold to investors, supposed value turned into more pieces of paper also to be traded back and forth? Are they so isolated from the rest of the world (not just in their own minds) that they really don’t need it (the rest of us, the environment, etc.)? What’s critical mass here, in terms of how many of us are on the street (as differentiated from “in the streets” – which situation they have some nicely militarized public servants ready to handle), poor, sick, dead before………? Before what? I suppose they’ll just have to make poverty and homelessness actual crimes, so they can lock us up in prisons owned by their friends.

    No worries about any kind of citizen action; most people I know are getting so desperate that they might have to sell their pitchforks.

    Good piece, Susie.


  3. 95 % of us will end up in hand baskets.
    The country itself in one giant hand basket.
    All made in China.
    Some knowing but most wondering where we’re going in these hand baskets.

  4. editor_u, it’s a really good question. My pull-it-out-of-the-air guess is that some of the owners are thinking generationally long-term, as aristocratic families have always done. After all, if the climatologists and peak-oil people are right, things like water, food, arable land, and electricity will become very, very expensive someday soon. They could be loading up now so that they can hunker down later.

    But most of the owners are just as stupid as everyone else, just luckier and greedier, and will end up like the landowners after the plague swept through Europe. Sure, they had a bunch of land, but no one to work it, and no one to buy its products.

  5. Q: “So they’re going to own nearly everything sometime soon. But what are they going to do with it?”

    A: Rent it

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