Economic news on the street

Avert your eyes from Wall Street to see what is happening to America. These statistics are part of a terrifying article by Elizabeth Warren, who serves as the Chair of the Congressional Oversight Panel created to oversee the banking bailouts:

Today, one in five Americans is unemployed, underemployed or just plain out of work. One in nine families can't make the minimum payment on their credit cards. One in eight mortgages is in default or foreclosure. One in eight Americans is on food stamps. More than 120,000 families are filing for bankruptcy every month. The economic crisis has wiped more than $5 trillion from pensions and savings, has left family balance sheets upside down, and threatens to put ten million homeowners out on the street.
There are many other statistics in this article. For instance, fully employed males haven't seen a pay increase since the 1970's. Warren also presents banks as villains in her story:
Boring banking has given way to creative banking, and the industry has generated tens of billions of dollars annually in fees made possible by deceptive and dangerous terms buried in the fine print of opaque, incomprehensible, and largely unregulated contracts.

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How foreclosed homes affect the rest of us

Arianna Huffington referred to the Brennan Center's recent study in reminding us that 300,000 homes are foreclosed every month in the U.S. This is terrible news for the people who used to make those houses their homes. But the problem is bad for the rest of us too:

[A]n estimated 40 million homes are located next door to a foreclosed property. The value of these homes drops an average of $8,667 following a foreclosure. This translates into a total property value loss of $352 billion. And vacant properties take a heavy toll on already strapped local governments: an estimated $20,000 per foreclosure (California is estimated to have lost approximately $4 billion in tax revenue in 2008). And the negative impact of a foreclosed home can affect the entire community: a one percent increase in foreclosures translates into a 2.3 percent rise in violent crimes.

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Banks and Republicans are blocking short-sales of homes

A middle-aged couple who bought a home in my neighborhood are in a terrible situation. They paid too much for their new house, which needed a lot of repairs, and they failed to aggressively work to sell their existing home. Therefore, they now have two houses. They continue to live in their original home while their new house (two houses away from where I live) has been vacant for three years and it is falling apart. I’m not talking about chipped paint. There are huge holes in the roof that are causing the house to rot out. Check out the garage roof too: Image by Erich Vieth[/caption] People who know a lot about rehabbing houses tell me that if this house and garage don’t get immediate attention, they will need to be completely torn down.

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TIME Magazine’s Insensitive Back Page Essay On the Foreclosure Crisis

In "I Bought An Expensive House. My Bad. Not Yours," Joel Stein compares the current foreclosure crisis to Jim Carrey's career in a flip, insensitive and uneducated opinion piece. Here's a taste of Joel Stein's off-the-cuff, but copy-edited remarks: "A lot of optimistic people bought houses near the historic height of the market, say November 2005, for absurdly high prices, say $1.12 million, in places like the eastern Hollywood Hills section of Los Angeles. These people are very, very sad." Talk about irresponsible journalism. Now let's contrast that with a recent Chicago Tribune article on emerging ghost towns: "The children who live on West Wilcox Street won’t go out at night for fear of 12 vacant graystones that draw criminals to their block. In Rogers Park, a half-empty 39-unit condo building on Farwell Avenue has become a hide-out for squatters and feral cats." Joel Stein is talking about his friends - or wannabe celebrities while the Chicago Tribune deigns to report on the little people. The title of Stein's essay belies his self-involved analysis: “I Bought a Bad House. It's overpriced, and I'm an idiot. That doesn't mean the government should help me.”

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