A Foreclosure Filing Every 13 Seconds

Published June 04, 2009 @ 04:03AM PT

Last week, Obama signed a landmark piece of foreclosure legislation into law. But the help didn't come in time to save 1,000,000 homes from foreclosure in 2009. Sadly, it seems the housing crisis, and its devastating spillover effects on people and our neighborhoods, isn't over.

Here's the latest research from the Center for Responsible Lending:

A dismal milestone was reached over the weekend: One million new foreclosures have been filed so far in 2009, according to estimates by the Center for Responsible Lending. This comes on the heels of a new report from the Mortgage Bankers Association, the first quarter 2009 National Delinquency Survey, showing that 12% of all mortgages are now delinquent -- the highest level since the MBA started measuring 37 years ago. (clip)

CRL projects 2.4 million foreclosure starts in 2009, with these foreclosures reducing the property values of some 70 million nearby households a total of $502 billion -- about $7,200 per family. Through 2012, those numbers will rise to at least 9 million foreclosures that will cost 92 million neighboring families $1.9 trillion in lost home value.

The foreclosure crisis pushed us into a recession. Until this problem is fixed, recovery will be slow. The worst part of foreclosures isn't only the people who are displaced, but the external effects on neighborhoods and communities. The CRL's most recent report on the spillover effects of foreclosures is alarming. Here's a clip:

We estimate that, in 2009 alone, foreclosures will cause 69.5 million nearby homes to suffer price declines averaging $7,200 per home and resulting in a $502 billion total decline in property values. During the period 2009-2012, we project that foreclosures will cost 92 million U.S. families some $1.9 trillion in lower home values--an average of $20,300 in lost wealth per household.

Although the federal government has made some steps in the right direction (for example, renters in foreclosed properties are now protected by a federal law), it is clear that not enough it being done to incentivize banks to make a good-faith effort to readjust delinquent mortgages. This is the most effective way to prevent the displacement of people and the abandonment of homes.

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Comments (4)

They should have gave all of us the money instead of giving it to wall st. and the banks who were part of creating this mess.

Posted by Ronald Waxter on 06/04/2009 @ 12:52PM PT
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Of course they are going to give the money to banks, automakers and wall st.

Government doesn't care about the people, it only cares
about controlling them.

Posted by C Epp on 06/04/2009 @ 01:11PM PT
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Government endorsed plans by President Barack Obama to prevent foreclosure have continue to fail. Over 55% of borrowers whose mortgage (and the bank will only modify the interest rate for one-year-only) that have been modified were already delinquent within 6 months. Simply put. It doesn't work. These (bail-out) bank's cannot be trusted.
The Obama economic team has created more Frankenstein's (i.e. loan modification experts, lawyer's, predatory lenders etc) who continue to pound these people who face foreclosure day after day from ads on TV, Cable, Radio etc. This should be the bank's job to do! Why do these people who are already broke & only looking to save their "primary-home" from foreclosure need to pay for outside help to save their home's? This is what they got for voting for the man of CHANGE!
These primary use family homes could be saved by getting the bailed-out bank's to reduce the interest to a fixed 4% and extend the terms for 40/50 year's at a fixed-rate. Since the banks have all the paper work on these homeowners. It would be easier for them to get the job done and it wouldn't cost the taxpayer a single dime. Most of these loans would be fully-paid off way before 40 or 50 year's due to death, relocation of familie's, divorce etc.
The Federal Reserve Board only care's about bailing out Wall Street & the Bank's. Not the million's of American familie with children, the elderly and pets that will be left homeless due to foreclosure of their primary-homes. The FED should be deep-sixed for giving AIG public money to do as they please with it. What is sad about all this is to watch the mother of an American soldier (in one of our communities) who died in combat in Afghanistan beg in public for help and being mistreated by the bank, collection agencies as her home was going into foreclosure, and this coward of a President does not have the guts to do what he must do and tell the gods of capitalism to go to gehenna and help his people who helped him achieve his dream keep their dream. In my opinion, he is a puppet for Wall Street, the Bank's, AIG etc.
Anytime I hear the man of "Change We Could Believe In" speak?
I think of the song
"It's Howdy Duty Time" !!!

We the People need our own publicly elected representatives at the Fed.
*Please support my petition drive at:

http://www.change.org/actions/view/deep_six_the_fed?fb_recruiter=&ref=nf

Thank you.

Posted by Minister Ciro Di Donna on 06/04/2009 @ 08:52PM PT
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Just a horrible thing--I cannot put into words the anger it brews inside me.

Posted by S B on 06/05/2009 @ 06:45AM PT
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Author

Shannon has worked in homeless shelters and service organizations in San Francisco, the Triangle region of North Carolina, and currently in the greater Boston area. She is a graduate student studying housing and urban policy at Tufts University.