After the Housing Bust: Foreclosure
by Jeff Davis
The great American housing boom of the early 2000s, when family home real estate soared to insanely inflated levels, began to tank about a year ago. This was an expected development. In finance as with gravity, what goes up must always come down. Now millions of American families are facing the results of that bust. They can’t pay their wildly inflated and outrageous mortgages, and so they’re losing their homes to foreclosure.
In addition to sky high real estate prices, very few Americans will be lucky enough to hold onto a good-paying job long enough to pay off a mortgage –safe from arbitrary lay offs or outsourcing. Very few people have the foresight to save up enough money to span several months -let alone two or three years- if an especially bad recession hits. Nothing more than luck or wealthy parents will save Americans from losing their homes after they miss the first three payments after losing a job.
Yahoo News reports that “A new Center for Responsible Lending (CRL) study reveals that 2.2 million American households will lose their homes and as much as $164 billion due to foreclosures in the subprime mortgage market.” Huh? Come again? $164 BILLION? That’s enough to run the whole Iraq and Afghanistan wars for…oh, for several months! (more…)