America the Foreclosed

[Richard Brand]

“There is a foreclosure filed in America every 13 seconds.” (responsiblelending.org) If no other bit of information should raise concern, the over six thousand foreclosures filed per day should be enough. In Texas alone, there are an estimated 337620 delinquent mortgages. These numbers are dangerous to the welfare of American homeowners and as long as they remain this high, will stall any attempt to climb out of the economic recession America faces.

Foreclosed properties affect every homeowner in that community. The market price of a home depends on what houses around it are selling for. If you have a $150,000 home for sell and a comparable house close to you has been foreclosed and is being sold for $50,000, buyers are going to look at the foreclosed house. Such sales affect the value of homes. Responsiblelending.org claims that 6,596,254 have lost an average of $3030 per house due to the foreclosures. That is over $1.9 trillion in personal unrealized wealth. People use this wealth to prepare for retirement, use as collateral for loans, and many other things that spur spending forward.

Recent lending restrictions have worked well to curtail the probability of loan default, but people in these upside down loans need help now. Situations vary, and now single piece of legislation can help all of the people suffering. I do not have the answer personally, other than to ask the banks to move forward with something other than greed as the driving focus. People in homes that are facing foreclosures not able to sell because of the current market and not able to meet the payments, currently are at the mercy of the mortgage holder. Continued foreclosures, however, will leave America in an economic recession with no way out.  

[Gabriela Gaspar]

Richard, very good post. All these uncertainties make feel as if the nation and the people are stuck in a cycle that only gets worse as days - and years - go by. And your post shows that very well when you say that homeowners don't have the means to meet their mortgage obligations at the same time they are unable to sell because no one wants to take the risk of buying a house in such troubled times. Talking about this problem in a general sense already makes me sad, but when you know people that have gone or are going through this foreclosure nightmare, it is even more heartbreaking. My hope is that, like all things in life, these people are able to finally stand up after hitting rock bottom.