Layoffs Now Main Factor in Foreclosures
By Susie Madrak Monday Dec 15, 2008 6:00pmI can't even keep track of how many people I know have been laid off in the last month, and a few of them are already having trouble paying the mortgage:
Unemployment is now the cause of almost half of all foreclosures on conventional mortgages, raising concerns that mounting joblessness will stall any housing recovery and could cause more foreclosures next year.
The increase in unemployment as a cause is a significant shift from 2007, when foreclosures were primarily driven by the large number of homeowners who had taken on risky loans. Many were first-time home buyers or those who bought during the housing boom that ended in 2006.
Now, layoffs and the recession are playing the pivotal role in driving mortgage defaults. The 4.3 million people collecting unemployment is the most since 1974, the Labor Department says.
During the first half of the year, about 46% of the 90-day delinquencies on conventional, conforming loans were because of a loss of income, vs. 36% in 2006, according to mortgage giant Freddie Mac.
Job losses exacerbate the situation for homeowners with risky mortgages. "A subprime buyer is already more fragile, so when unemployment rises, foreclosures go up," says Freddie Mac spokesman Brad German.
Mounting joblessness is also affecting homeowners who may have traditional, 30-year conventional loans but are living paycheck to paycheck.
They tend to be more urban, lower- and middle-class blue-collar workers, says Rick Sharga of RealtyTrac.
"It's not going to be pretty," Sharga says. "You're going to see whole different regions of the country suffer."
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what's going to make it worse is no equity in the homes. this is going to be the 2nd wave that is going to turn this recession into a depression
We are about to see something that I have never seen in my lifetime.
Laid off workers getting tossed out of their homes, while bankers throw another couple of logs made from compressed Ben Franklins on the fire and bust out another Cohiba, and wash it down with some Vieille Rèserve grade brandy, which they bought with the laid off workers' tax money.
Ain't America Great?
it was the season of Light, it was the season of Darkness, we had everything before us, we had nothing before us...in short, it was a period very like the present...
Politicians the world over, are tossing money at the rich and corporate faster than they can print it, just hoping that Reaganomics will once again trickle down on the masses. I mean, what other reason can there be, besides the hope that ol' Ronnie Raygun's theories were correct? It doesn't seem to matter if one is a liberal, conservative, communist, socialist, or mentalist. All are doing the exact same thing. Oh no. Consumers aren't buying. OK. Quick. Throw umpteen billion at the widget factories. That'll get them to buy. Trickle, trickle, trickle.
Wow! And that number could increase by another million or more people within a month if Southern Republicans are successful at blocking government loans for the autoworkers in their efforts to union-bust.
"I can't even keep track of how many people I know have been laid off in the last month,"
I can. I work in a very small business. Been there nine years. We've always hired people or they just left. Out of an office of ten we had to let two go. 20%. Our largest customer is letting go 75 out of around 500. They've been around for over 40 years.
Could be worse. I'm not in the insurance, auto, credit, real estate or retail industry.
And if they are foreclosed on, some dillweed will come along and try to disqualify them to vote, based on them no longer living at the address they signed for voters registration.
...are the small business owners who also have mortgages to pay and, as with well over a million and a half homeowners, are defaulting on their mortgages when they see them nearly double at once.
It's sad enough seeing a family get displaced from their home but there's something also tragic in seeing a place that employs people and puts tax dollars into the Treasury, money into the economy, get shuttered for the same reason.
And the more small businesses that go under, the harder it'll be for us as a nation to get our economic equilibrium.
to everyone to spend any way they want? I mean, if they want to keep the money in circulation and help the economy, why not give it to people who will spend it?
National Payday!
That's the second time I've heard that inside of a week...My manager said the same thing on Thursday!
is a smart person!
is smarter than she'd ever admit to being.
your wife!
It certainly will be money better spent than giving it to the banks, etc. who are a/ paying their own honchos big bonuses, b/ not giving credit to businesses & individuals who would truly help getting this economy going.
Why does everything in this country seem ass-backwards?!
running this country (into the ground) are RICH!!! Stop voting for rich people.
VOTE THE HOMELESS BUMS IN!!
the homeless bums don't have clout. :^)
we could just lower taxes on the bottom 40% of income earners.
foreclosures and unemployment are both a cause and effect. foreclosures are causing a decline in neighboring businesses. new start ups in newer neighborhoods can't hang on. they were counting on
the support of new home buyers. this is also hurting the strip mall businesses. they signed leases 1-2 or3
years ago. now commercial properties are losing tenant(s). this can hurt a nearby business that has a
symbiotic relationship. the city i currently live in, some home owners are experiencing a 50% decline in the price of their home from 2 to 3 years ago. there are upside down. the indicators show there is another
wave of foreclosures coming....ARM loans. people move out leave their keys and that has an affect on the
neighbor and the neighborhood.
I know someone personally and the 32 years together and a 2nd Mortgage, and a Prime Mortgage, taken on in hard times, late in a long life together, meant the end of their marriage.
There are many casualties of this down-turned economy, families torn apart.
What can I say, other than to pray and do all I can to help? One thing, though, the Mortgage House could of accepted smaller payments and the home owner less value, but the Mortgage Houses, wanted the Homes, sitting vacant, bringing "0" dollars, why agree, when the Fed was going to shove cash down their vaults and the long time home owners into the streets, it all seems so callous and unfruitful.
Hey C&L - please post a link about the 60 minutes story last night about the NEXT wave of foreclosures. Scary shit. Seriously. I'm surprised there isn't a post yet.
i watched that 60 minutes also. there was a guy(in miami) who has a business of emptying homes with or without people in them. he said his business was doing 20 homes a day. that's just his business and he needs to hire more employees. they were showing future graphs of what they expect as far as foreclosures....................it's NOT good. currently they were saying on
60 Minutes that one out of seven homes is in some type of foreclosure status. this is very serious and BUSH is NOT doing enough.
Yea, that part blew me away. He said 20-30 homes EVERY day he had to clean out because families were forced to move. Unreal.
Shirley you can't be Serious :-P
No foreplay afore foreclosures.
boy am i glad i didnt piss my money away going to college paying a hundread thousand dollars to get a phd, so i could work at micky ds and be able to spout poetry about lifes tradigdys i know i spelled that wrong but it didnt cost me my home to learn how to spell it, credits the villian here plain and simple !
The plan by the Regressive Party, ie. Republicon Party has been to allow for foreclosures. The uber-rich want to see property prices decline so the wealthy realty groups, and property investment groups can sweep in and buy up desirable distressed properties at bargain basement prices, hold them until the market recovers and then, sell them. This has always been their plan. It is a continuation of Reaganomics and Trickle Down economics. The more the middle class and working America are in distress, the more the uber-corporate rich can control wages, and benefits, as they add more of the profits to their bank accounts. This is exactly what is going on with the TARP. It is time America wakes up to the scam that is going on right now.
http://eye-on-washington.blogspot.com
Layoffs have been a factor in foreclosures since the Depression or before. What's new is that the big greedheads invested in mortgage securities, then laid off to "downsize" expenses and expand their paychecks. Next, they hired illegals and the occasional African-American, who bought the American Dream and then were laid off and foreclosed in turn. Now all the CEO's are squalling like babies because their ponzi scheme collapsed on them instead of on the workers.
Now the rethugs can't blame all of the Black people for collapsing the mortgage business. This scenario becomes more criminally tragic with every turn.
If no one has the balls to prosecute the Bush/Cheney administration, could we just form a mob and run their asses out of the country?
Plus, the resetting of option arm mortgages in the next 3 years will devastate this country.
http://www.huffingtonpost.com/2008/12/15/seco...
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