Numbers Lay Bare the Despair of Voters
- Submitted by: Love Knowledge
- Category: Politics
More than 10 million Americans live in areas where at least 43 percent of homeowners are trapped in underwater mortgages and heading for foreclosure, according to a Haas Institute report.
Photo credit: Jeff Turner / Flickr (CC BY 2.0)
The post Numbers Lay Bare the Despair of Voters appeared first on WhoWhatWhy.
This is the fourth part of a multi-part WhoWhatWhy election autopsy. Please see here for the first, second, and third parts.
Cleveland and Philadelphia, which hosted the GOP and Democratic conventions this summer, are prime examples of the economic dislocation enduring in the US. In Philadelphia, there are 40,000 vacant lots and abandoned homes, while Cleveland has 6,000 of these zombie properties and 20,000 homes that have already been leveled because they had fallen into such disrepair.
This wasteful act, of letting perfectly good homes deteriorate to the point of ruin, is an ongoing national disgrace that is happening as rents continue to climb and homelessness is a major problem.
This was also the recovery brought to us by the Republican Congress, which hated Obama more than it loved the American people.
The news media never followed up on the failure of the so-called mortgage modifications and the outright fraud by the very same institutions that had precipitated the crisis in the first place. Consider that from 2009 through 2015, 2.2 million households applied for a trial mortgage modification, the first step to getting a permanent reset, but roughly 786,000 canceled. Of the remaining 1.4 million granted Home Affordable Modification Program (HAMP) adjustments through Treasury, some 467,000 ultimately defaulted again.
While Bloomberg News and CNBC were busy talking recovery, great stock prices, and oohing and ahing over the latest luxury goods their sponsors were selling, wages and household income were flatlining, wealth concentration was accelerating, and millions of vacant zombie homes continued to depress home prices in cities like Cleveland.
This wave of re-defaults cost taxpayers $1.8 billion dollars in TARP funds that were paid as incentives to the banks and mortgage servicers to participate in the modification program. In most states, 35 percent of homeowners could not afford the terms of their modification, setting themselves up for another default or foreclosure. In some states the default rates are running even higher: For example, it’s 44 percent in Mississippi, 42 percent in Louisiana and 40 percent in Nevada.
According to thousands of calls received by the Special Inspector General overseeing the program, the banks and mortgage-servicing companies that handled the mortgage modifications were contributing factors to the default rate. Complaints about lost paperwork and clerical errors were common. According to the Special Inspector General, so-called “dual tracking” was also an issue. That’s a practice in which the servicer of the HAMP mortgage will continue to pursue foreclosure, even while the homeowner is in the HAMP program.
“Nobody wanted to deal with the reality that these mortgage modifications were not affordable long term,” Kathleen Engel, a research professor at Suffolk University Law School in Boston, told WhoWhatWhy.
