If the Economy is Improving, What’s With All These Foreclosures?

I, as I believe I have mentioned before, keep a sharp eye on local real estate listings, for a variety of reasons. And there’s one thing I’ve noticed quite consistently: The number of foreclosures is increasing at a fairly steady rate. Between the legal notices in the paper alerting me to upcoming auctions and other foreclosure-related activities and the foreclosure listings, a pretty clear picture is being painted for me.

The much predicted second wave of foreclosures is upon us. And we’re starting to move out of the subprime zone and into the realm of people who were thought of as ‘good’ candidates for loans. The people who wouldn’t possibly default on their loans because they were middle class and everything. And that tells me that this economic recovery of ours is not going so well, because more and more people are struggling to keep up with their mortgages. It also tells me that the loan modification programs promoted by the government are clearly not working, or more of these people would have modified loans by now.

I suspect that some people may simply be walking away. As real estate values fall and the artificial bump in home sales created by the now-expired tax credits trickles away, property is simply worth less than it used to be. A lot less, in some regions of the world. This area of the country is actually doing pretty well, comparatively, thanks to the fact that it’s regarded as a luxury real estate market[1. Hah, is what I say to people who think that and haven’t spent some time ‘slumming’ in the $200,000 range. Luxury that shit is not, let me tell you.], but it’s telling that some places are remaining on the market for extended periods of time, and comparing sales prices for comparable properties over the last couple of years tells me that what people are willing to pay is definitely dropping. Under those circumstances, it doesn’t surprise me that some people are just dropping their loans and getting out.

But other people would very much like to stay in their houses, and can’t do that. People have eaten through their safety cushions. The benefits and last chances are over. And so, they have no choice. Well, they do have a choice. They can surrender their keys and get cash from the bank, or they can sit in their houses until the sheriff comes. As for tenants of foreclosed homes, many of whom are unaware until the bank comes knocking that there’s a problem, well, good luck finding a rental in this market. That’s what we’re down to now, folks, and it’s not a pretty thing to watch, even from the sidelines.

My friends in other regions of the country are also noting that foreclosures are on the rise in their communities. Sometimes, it seems like more bank owned properties are on the market than homes owned by actual people. This is not, shall we say, an encouraging indicator, all things considered. Banks are not the greatest homeowners because their goals are a bit different from people who own houses. And when banks own properties that were suffering from deferred maintenance when they were seized, those houses have only one direction to go, and that direction is down.

I know where the foreclosures are on my block. Two of them were finally purchased and some work is being done to fix them up. It looks like people are living in one, and the other is probably going to go on the market soon; an opportunistic flipper decided to take advantage of someone else’s lost dreams and make a little cash in the process. I can’t help but maintain a small and vicious pleasure at the thought of the house sitting empty for an extended period of time while the price is dropped again, and again, and again, because it is of course flippers who are in no small part responsible for this state of affairs.

The rising numbers of foreclosures are a really disturbing trend. To me, they speak to a profound lack of government interest in what is actually going on on the ground. People are losing their homes. People are dying. People are losing hope. The government’s programs that were supposed to promote economic ‘recovery’ lined a few pockets with cash, but left a lot of people out in the cold. People who were supposed to qualify for loan modification didn’t. People who should be eligible for assistance somehow aren’t.

Home ownership is not necessarily something I think we should be promoting, but shelter and safety are things that I think are important. And I don’t see a lot of interest in making either of these things available to people in the United States. Now, more than ever, we need strong social programs. People need access to food stamps, to health care, to other benefits. And the government keeps slashing and slashing at the budgets. I see rising numbers of foreclosures and think of people who clung tooth and nail to the dream they were sold and had it blow up in their faces.

It’s trendy, I know, to call people irresponsible for getting foreclosed on. But it could happen to anyone. And what people need is not mockery and a lecture, but a helping hand. It doesn’t take much to make a profound difference. It doesn’t require a lot of money to turn someone’s life around, to give someone a second chance, to redeem a bad situation. Yet, the government can’t even be arsed to do that.

I’d like to say that there will be a populist revolt, but there won’t be, because the people most profoundly impacted by what is going on in this country right now are too busy trying to survive to do anything. So the foreclosures keep rising and homelessness increases and inequality grows by leaps and bounds and the gap between have and have not becomes a crevasse, and I wonder what the tipping point will be; when all the houses on my block are foreclosures?