Do You Remember the Hoovervilles?

Do You Remember the Hoovervilles?

By Richard Whalen | November 21, 2007 7:00 AM


This year, hundreds of thousands of Americans will not be celebrating Thanksgiving at home. Are they traveling to be with their families?

No, they have lost their homes.

RealtyTrac® (realtytrac.com), the leading online marketplace for foreclosure properties, released its third quarter 2007 U.S. Foreclosure Market Report on Nov. 1, which shows “a total of 635,159 foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 446,726 properties nationwide during the third quarter, a 30 percent increase from the previous quarter and an increase of nearly 100 percent from the third quarter of 2006. The report also shows a foreclosure rate of one foreclosure filing for every 196 U.S. households for the quarter.”

“August and September were the two highest monthly foreclosure filing totals we’ve seen since we began issuing our report in January 2005,” said James J. Saccacio, chief executive officer of RealtyTrac. “Although not all areas are being hit as hard as others, the rise in foreclosures is quite widespread, with 45 out of the 50 states documenting year-over-year increases in the third quarter. Given the number of loans due to reset through the middle of 2008, and the continuing weakness in home sales, we would expect foreclosure activity to remain high and even increase over the next year in many markets.”

To add to this nightmare, the Center for Responsible Lending, a nonpartisan research and policy organization, in a December 2006 study, says that more than 2 million people with subprime loans are facing foreclosure this year and nearly 20 percent of subprime mortgages issued between 2005 and 2006 are projected to fail.

Why have our presidential candidates not acknowledged this devastating impact on our communities and businesses?

more...

http://blogs.cqpolitics.com/whalen/2007/11/do-you-remember-the-hoovervill.html

Someone is reaping a fortune in the sub prime collapse, that's for sure. They may have fired the brokers that gave out the loans, but the banks that own the paper are making a killing. They basically just picked up billions in property for pennies on the dollar, by buying the sub-prime paper from these sleazy brokers.

http://money.cnn.com/2007/11/16/real_estate/suprime_and_crime/index.htm?cnn=yes

The first thing that happened after owners moved out of foreclosed homes in Slavic Village was that squatters and looters moved in, according to Mark Wiseman, director of the Cuyahoga County Foreclosure Prevention Program. "In the inner city, it takes about 72 hours for a house to be looted after it is vacant," he said.
Walking around the neighborhood, Mark Seifert, director of the East Side Organizing Project pointed out a home he said was still occupied less than two weeks before. The gutters and downspouts were already gone, and trash covered the yard.
After stripping the siding, looters don't take long to make a vacant property nearly worthless.
"If someone takes the doors, moldings, appliances, it's bad enough," said Wiseman. "But once they pull the piping out, it's all over; they do it with a sledge hammer."
Putting a house back together takes money, more money than the restored home could bring on the market. And stopgap programs, such as razing derelict houses, aren't feasible - Cuyahoga County only has a few million dollars available for demolition work, and Wiseman estimates at least $100 million is needed.
Many houses in Slavic Village have had their siding stripped up to the roof lines. A few criminal masterminds even stripped vinyl siding, apparently unaware of the difference in wholesale scrap prices between plastic and metal.
When a house is derelict, people will dump garbage in the yard, rather than pay for haulage. Windows are broken, and doors are stolen, opening up the interior to the elements. In Cleveland's cold and damp climate, the houses deteriorate quickly. But some not badly enough to keep drug dealers out.

with mortages so far over their head. I know a lot of people lost their jobs. But If I was going to buy a house, I would make sure the payment was within my budget. And why did the banks lend this money, knowing the people did not make enough money to cover the payment. I think something should be done to these banks, because that is decitful practice.

True, some people had to buy into the "McMansion" hype and get a lot more house than they needed. I don't have a lot of sympathy for them. The people I do have sympathy for are those who were lied to by the mortgage companies (regarding the rates– and there are plenty of people who were lied to); the people who lost their jobs (thanks to corporate outsourcing, NAFTA, CAFTA, etc.); the people who suffered a devastating illness that left them with a mountain of medical debt.

Over half of all bankruptcies in the nation are the result of medical bills and/or job loss. These are both circumstances beyond our control. I speak from experience although I was very, very fortunate in being able to keep my house after my husband died.

I also wonder how many foreclosures are the result of National Guard and Reserves loss of income over the extended tours of duty. These people have truly been shit on in just about every way possible.

...the first unit I worked with over here was national guard, and the vast majority of them were making more money in Iraq than they made at home. Combat pay, family separation pay, tax-free status, etc., all add up to a substantial amount on top of the base pay. No one was getting rich, and no one actually wanted to stay here, but I didn't hear any complaining about money.

Also, at least in the Phoenix area, a large percentage of foreclosed homes were purchased as investment homes. The homeowner is not going to be homeless just because his second, third, or fourth home is foreclosed on. (The renter will probably have to find a new place to rent, but there's no shortage of those, either.)

I had to sign a very plain English "Truth in Lending Law" statement when I got the loan for my house. It very clearly laid how what my interest rate was, how it could change, when it could change, etc. I don't know how you can possibly be tricked or cheated if you read what you sign...

that were "over their heads" because the banks lent them the money! It was a very deceitful practice on the part of the lending institutions. What I think is being over-looked, for the most part, is what is going to happen to all those people who borrowed against the equity of their homes and now find those homes well below market values of just a couple years ago? It's not good.

because your salary would go up, and the property value would go up, so it was a good investment.

Obviously that is no longer a good rule. But my parents (in their 70s) believed that and were stunned when my husband and I bought a house much smaller than we could afford and got a 15-year mortgage. They thought we were foolish because it was contrary to conventional wisdom. They now agree that we made a wise choice.

However, I remember a theater arts class at Indiana University in the late sixties when we studied the Federal Theater Project (1935-39), part of the WPA. Specifically, we focused on a play that was customized to the areas in which is was presented and called "One Third of a Nation"(Arthur Arent).

It was written to highlight FDR's state of the nation speech in '37 in which he referred to the third of the nation that was "ill-housed, ill-clad and ill-nourished". I wonder if we'll see those times again? And of course, The Grapes of Wrath comes to mind too.

Here's an interesting link explaining the FTP and just past half-way down the page the first presentation of "One Third of a Nation" in Seattle and the ultimate demise of the FTP due to accusations that it was communist propaganda!
http://www.historylink.org/essays/output.cfm?file_id=3978

great link

pertinent considering the "mess we've gotten ouselves into"!

I hadn't heard of the FTP before I saw a film called, "Cradle Will Rock", which was (mostly) about the FTP. I really think that history is repeating itself, and not in a good way. :(