Foreclosure Will Directly Affect 1 in 16 Americans?

Foreclosure Will Directly Affect 1 in 16 Americans?For my money, the politics of the next few years rests on stopping the foreclosure crisis. Yes, healthcare is important, dealing with climate change is imperative, but both of those are adding something new into the mix that hasn’t been there up until now. The financial crisis has created a gigantic glut of foreclosures- and that is the core of the American Dream. If that starts slipping away from families, what is there to hold onto?

According to Reuters, there is a foreclosure filing every 13 seconds in America.

Every 13 seconds!

That is brutal- 6,600+ filings per day. Almost 2 million filings so far in 2009. You figure most homeowners are married and a good number have children, say that’s 3 per household. That means 6 million people have filed for foreclosure on their houses so far this year. There are 300 million people in the U.S., and that means that 1 out of every 50 people in the U.S. is dealing with foreclosure- can that be true?

I know several. Some friends of mine got married two years ago, bought a house and now have a baby. They also have a balloon loan that in a year or so will require mortgage payments well in excess of their current income levels. They need to keep living there but they see an inability to pay looming on the horizon.

Another woman I know just spent a year dealing with court documents and having to daily face her children with no certainty as to whether she and they would be living in their home a month later- eventually, and somewhat heroically, she was able to refinance under a government assistance plan and the family will remain in their home.

Those are both, I suppose, the success stories. I know several families in Oakland who have lost their homes and are living with other families or relatives on the floors or couches. What else are you going to do?

The issue across the country is that it’s no longer just the sub-prime loans that are going into default or questionable mortgages- people who were secure a few years ago and steadily paying their mortgage are now looking at foreclosure due to losing their jobs and the strain that puts on household finances. The Treasury Department says that more than 6 million families could deal with foreclosure during the next 3 years- using my same numbers, that’s 18 million people (at least), which means over one in every 16 people in the U.S. will be directly dealing with foreclosure. You tell me that about about another country, that their economy collapsed because of corrupt bankers and failed oversight, and that close to 6% of the population was dealing with losing their home I would think you are talking about Russia after the Soviet Union collapsed or something- but no, that is the projection for America.

"The recent crisis in the housing sector has devastated families and communities across the country and is at the center of our financial crisis and economic downturn," said Michael Barr, the Treasury Department's assistant secretary.

Look for this to be the defining aspect of Obama’s presidency a few years down the road- when he is looking for reelection, people are going to start saying- Ok, great, so you bailed out the bankers, but what about all of us?