September 25, 2008
Everyone can feel it. Hard times are here. In this episode, correspondent Lisa Ling reports that though the Inland Empire has been one of the fastest growing counties in the state, it has recently become something of a poster child for the foreclosure crisis. Then, Judy Muller introduces us to a middle class mother of two struggling to keep her family from becoming homeless.
And Patt Morrison, columnist for the Los Angeles Times and radio host on KPCC, looks at one of California's favorite "blood sports" — real estate — and how hard times have affected it.
To Angela Shelley & Staff of Foreclosure Alley~
I sat very quiet while watching last night's segment of "Fore-closure Alley". I have been thru the fire, as you well know, Angela. To see people leave their lives behind, to realize the financial devastation is affecting so many, to know firsthand the fear that is a result of leaving every-thing behind, to see dreams literally trashed, hit home.
You made a real crisis sadly understandable~ I have left my status of 'half-homeless' van living behind, but will never forget the kindness and support of people like you for telling a very true story and letting people know it can happy to anybody.
In Life~
Linda n' Danny-Meow Turner
To Angela Shelley & Staff of Foreclosure Alley~
I sat very quiet while watching last night's segment of "Fore-closure Alley". I have been thru the fire, as you well know, Angela. To see people leave their lives behind, to realize the financial devastation is affecting so many, to know firsthand the fear that is a result of leaving every-thing behind, to see dreams literally trashed, hit home.
You made a real crisis sadly understandable~ I have left my status of 'half-homeless' van living behind, but will never forget the kindness and support of people like you for telling a very true story and letting people know it can happy to anybody.
In Life~
Linda n' Danny-Meow Turner
I have friends and family in the mortgage business, part of the crisis is from like they said from Wallstreet and it is Lending Institutions not regulating these types of loans that should have not been available to the public to sell. Isn't this ironic that so many Banks have closed caused by this credit crisis and that it took the Government this long to help homeowners out of this situation? It took all these banks to close down to have the Government finally say we have a problem. Isn’t it ironic that Washington Mutual seized by the FDIC? Isn't it ironic that most of the U.S 50% is from Foreclosures and the Subprime market? Please make sense of this...that most of the United States that are in Foreclosure...and you are saying homeowners cannot manage their money correctly???? These types of comments do not make any sense since the whole U.S economy is affected by this crisis not just Riverside County. Most people thought the real estate market would keep on prospering and values would rise however; when I hear that it was the fault of the buyer and to some point yes however; when the market declines, values drop and the mortgage is more than what the house is worth and no matter how good your credit is, a lender isn’t going to refinance a loan the homeowner they don’t have a product available to help the homeowner out of. The Bush Administration just past the new Hope for homeowners starting October 1, 2008 to keep their homes and get a loan up to 90% loan to value and forgive the loss to the lender however; at least they can get out of a bad loan and be able to keep their home the only condition is they have to share their equity when they refinance or sell their home. Since these homeowners cannot get out of these bad loans this is why such an increase of homes listed on the market and an increase of foreclosures or short sales. Homeowners that are in a bad loan and upside down and cannot refinance homeowners feel they have no choice except to go into foreclosure. The other problem is the adjustable rate mortgages that were made on these subprime loans. Since the declining markets the balances of mortgages more than the value and the adjustable payments some payments increased to $1,000.00 more per month. This is why the foreclosure alley in Riverside. Most of these homes were 100% financing or 95% and values dropping up to $150k or more due to short selling this is why the foreclosure market. Wall Street sold mortgage back securities in bulk to investors. Do you ever notice when you buy or refinance a loan your loan is sold to another lender? Your loan is sold in bulk by the thousands to investors and the investors make money on Wallstreet and they want the taxpayers to pay for their mess? I say NO DEAL.
@Anonymous in LBC
I'm with you. I sat by in San Diego watching all these complete morons drive up the prices of homes to unreachable heights by taking on HUGE risk. The mantra at the time was "San Diego real estate always goes up. San Diego real estate always goes up. San Diego real estate always goes up. San Diego real estate always goes up. San Diego real estate always goes up.". I tried to tell people otherwise, but they were just too greedy and/or stupid to realize the err of their ways. Let 'em rot under the overpass is what I say.
regardless of how and why people bought these homes it is tragic.. the consequences of losing your home, down payment, savings and running up your credit cards leaves nothing but broken marriages and dreams. the suicide, crime and murder rate will climb and if anyone is to blame it is the US government, alan greenspan, ben bernanke, bill clinton and your current president stupid.. these artificial low interest rates intoxicated people to borrow and consume above their means which eventually resulted in dispair.. i believe the american government did this on purpose then sold the worthless paper around the world to bankrupt other economies.. they should be hunted down and dealt with like the dogs they are.
Every one is wanting to blame some one, pointing a finger this way and that. Just remember the old child hood joke that when you point one finger at some one the others turn right back at the real problem. Fact of the matter is, we have all been born with our own free agency, no one can take that away from us. Sure some will be more naive than others but in the end it was their choice. It's a fact we reap what we sew no matter which end of the stick were on.
Five years ago my husband and I choose to pay down our mortgage with the extra money I have made with my "teachers salary" holiday window painting business. Yes, window painting. (You can look at my sight at http://www.julierumsey.com.) It's all about being innovative and using your god given talents to be smart with what your blessed with. Then turning around and being responsible with those blessings.
Now my husbands employer is down sizing. They have sold us out to china, following the trend of the good old "American Dream". It is sad how American employers have lost the real meaning of the word, "American Dream".
I am thankful that we were wise enough to live with in our means. Now thats a talent in and of it self. Self discipline, start today, you'll be glad you did.
Common Julie, I work in the mortgage industry 28 years and also own my own mortgage company and also do loan modifications. Its so easy to judge people especially when your not in the situation. Haven't you listened to the news or are you just hiding your head in the sand? The U.S economy is in a crisis...the unemployment rate is up compared to 25 years ago. This also, causes people to become in a hardship...losing jobs. Also, they say there are more than 15 million homes across the United States that owes more on their mortgages than the Appraised Value of their home. I don't care how good your credit is...however; there is no loan program to help people out of their mortgage and refinance a property that the balance is more than what the house is worth. This is why the increase of short sales and REO foreclosures caused by so many homes on the market and the decrease in values. I hear stories of middleclass families that live within their means..however; a loan that is upside down..basically there is no loan program to refinance out of this situation. These programs were only available to borrowers just a year later after many homeowners already lost their home. Additionally, some of these loans that were sold to borrowers fit in the guidelines of preditory lending procedures with loans that the lender shouldn't even approved stated income to a borrower with social security fixed income. I have heard many stories of hardships from many borrowers that couldn't make payments because they were trying to save their rental property when the Adjustable rate mortgage increased and fell behind on their primary residence. The sad part is that some people don't have compassion because they think its just because they cannot make the payment...and its not the case. I think your just not paying attention really whats happening and you pretend you know. The other thing that makes me discusted is people want to give advice on the mortgage industry or how people cannot make payments when they themselves have no experience in what they are talking about or THEY DON'T EVEN OWN A HOME. Experience is when you work in the industry, talk to many people that are losing their homes and actually own their home. So, please do your homework and pay attention what is really going on in the industry. DO NOT JUDGE people and have compassion for others hardships.
I too couldn't understand why everyone was driving up the price of homes (bidding wars) and I wondered how people who made much less than I could afford these homes. I think that in order not to repeat something we must identify the causes. I do understand how people who knew very little about mortgages and rates so desperately wanted the American dream of home ownership. If lenders who have previously denied one this opportunity are telling folks that they can afford a home, they can have their dream come true, then people are going to take advantage of this opportunity.
I blame the "experts", the lending institutions. It is their responsibility to only lend money when one's credit rating meets the criteria for repayment. Failure to do this undermines the whole system. Lenders were driven by greed and the lack of regulations skirted traditional checks and balances.
The individual home owners suffer a loss, however the failure of the lending institutions to do their job has caused the entire country and the world to suffer.
The so-called American Dream is now a nightmare! Greed has fueled this nightmare as the building industry and banks sought to make billions from homes inflated as much as 40% or more. A house should be a "home" where you raise your family not an investment vehicle.
Instead of building "affordable "three bedroom bungalows for families builders sought to build real "estates". It's greed that caused this whole "housing bubble burst". The house that the young couple with their baby lived in with foreclosures all around is not worth 300,000+ dollars. A 3,000+ housenote! What if one becomes ill? What if you lose your job? Who has 6 months @ 3,000+car+insurance+high power bills+high gas prices+high food prices? Comes to about 7-8,000 per month.
This whole thing about qualifying for a home on both salaries is pure folly. I remember when only one salary would be considered to free up the other for life's bumps. We have gone crazy GREEDY on all levels and have no morals concerning our fellow man. Get all you can get no matter what!
The Fannie "mae & macaroni" mess! UGH! Instead of building affordable homes for all Americans our greedy building and banking industries sought to bring people up to overinflated housing prices for PROFITS of the unbelievable kind. Now look Gotcha! AFFORDABLE HOMES, STARTER HOMES Remember that!
The automobile industry is another over inflated industry. The Hummer is an ABOMINATION to our economy and our environment! Car notes over 400.00 per month. The predatory car lending industry and insurance industry ...Alive and well!
At the crust of all the aforementioned woes is the fact that we are a CONSUMER NATION dependent upon others for our daily bread. We make nothing any more. All our industry is overseas where our "Beloved Companies"can make 1000% profit from paying 2.00 a week with no benefits or retirement to some poor third world nation citizen. Then we GREEDY Americans buy 40+ pairs of shoes, 2+ flat screen tv's per household, clothes and designer bags at unheard of prices, too much furniture( all made overseas), more food than we need,( American Obesity Highest in the World - High Medical Costs)) computers and the "toys" X box's, cell phones(always the latest model you know)ipods I I I I I I..."I" I GREEDY AMERICAN can be duped into anything and our way of life is diminished because of it!
Live with fewer THINGS...We come into this world with nothing and we go out the same way, All that in-between does not even count!...Americans have no morals , no real relationships, NO REAL LIFE...JUST STUFF!
I wonder who is to blame for the unrealistic American Dream of (gargantuan-sized) home ownership? Cheryl does not reflect on the fact that this particular Dream might have been unrealistic to start with. I think it's difficult to place the blame in any single one place. It's a collective folly.
As a European who lived in the States with my wife + 2 small kids last year I have to say that there were so many things I found totally unsustainable, starting with cars/traffic/roads, then buildings/architecture/urban & suburban planning and ending with rampant consumerism. We fell in to it because no-one really has a lot of choice and because it's such a convenient lifestyle. But no tree can grow 'til heaven.
I both feel sorry for the people but at the same time feel that they had it coming. Buying a house is probably the single most important economic decision a person/family ever does and it should not be undertaken lightly
I have two independent comments to make:
One, I am at risk of losing my home although I do not live in any of these areas in trouble or paid too much. My story is that I lost my good-paying job in 2004, a few months after I bought my house in a very good deal. Since then I have been working contractually at a very reduce income. Four years, and now my saving are running low, specially since I had some medical expenses. Because of the housing crisis, I cannot sell my house at a reasonable price. I ended up renting it. But now, even if it stays rented, my income is declining because my clients are going out of business. I am a bookkeeper. Between 2004 and last year, I did work for about 15 different customers. Now, I only have three left. Luckily one is very good, but I lose this one or my tenant, and I cannot replace these, I will lose my house. So, as you can see, it is like dominos. Although I did not make a major mistake, I am suffering the consequences of the deteriorating economy.
Second thing. Why are they throwing all this stuff away? Go to the flea market, and find some dealers to buy your stuff. What a wastefull society we are! If I lived out there instead of the East Coast, I would be laoding my pick-up several times a day and carrying things to my storage facility. All those things! How wasteful. It is criminal. I could make a couple of thousand dollars a weekend at the flea market. Charities don't really care. No one in them is making moeny. It's a charity! Those people are not motivated.
There has come payment time. Payments for belief in capitalism. Logically come apogee. The management of the USA did not try to analyze a consequence of easy credits at all. As a result a social disaster - people in the street without property, without hope, without "tomorrow".
To convict the American government or banks has not put for foreigners, we in Russia can observe and sympathise with the broken people only.
One only the remark: At all problems in Russia, at all difficulties - the right of any Russian to housing accommodation and work is fixed by the law, as well as in many socialist countries. The person can receive municipal housing accommodation even free of charge if it does not have money.
And the authorities in Russia will not allow banks to deceive people. It also is a socialism (not to confuse to harm under the name "communism";) ) A socialism - first of all care not about the finance and exchanges, care of people, of citizens. In Russia nobody will allow banks issue unconfirmed inquiries credits because of which Russians can to lose everything as it happens with Americans in this episode.
Probably my performance will seem to you very naive or even silly, my problem in bad knowledge of English. It is heavy to state correctly think on a foreign language.
But try to understand me correctly, I try to show to you freedom of the citizen in America as it is not enough at it the rights is how much small. And as it is a lot of force and the rights at corporations, banks and holdings. In many countries in a similar situation citizens would be protected by the state. Debts would be calculated under the new schedule of payments, salaries are stretched for more logical terms of payments, with allowance for. The person would remain at the real estate and as would pay for it. Banks issuing rash credits are guilty. Them also have punished. But only not in America. Banks have won the citizen America. Have crushed it. Correctly it? Capitalism is a correct way?
I saw these sad stories and keep praying for this epidemic to stop. But I'm wondering if there is a list of companies on the web that do this business of emptying the homes that are left for foreclosure? If they are trashing good furniture and no one is taking these things, why don't they offer others an opportunity to take what they want?
If anyone knows of these businesses and a list of them in the Central Coast of CA, please reply to this comment. Thanks!
Foreclosure Alley was the first story to capture the true essence of a foreclosure. It was brillantly done. Bravo!
Where you live may be hazardous to your health. SoCal Connected examines the intersection of community, environment and health.
Anonymous in the LBC says :
Although it was horrible to see the reality of Foreclosure Alley, I can't help but recall how I was never able to purchase a home due to the soaring prices caused by the "feeding frenzy" of all those who jumped onto the sub-prime mortgage bandwagon.
No one forced those people to buy into what they could not afford, now they must suffer the consequences of their own ignorance and greed. Read the contract- it's just like pulling out that credit card: you can buy it now, but you better be darn ready to pay when the bill comes.