Mortgage Crisis a '50-State Katrina'
"Fear of economic collapse is replacing fear of terrorism. The real homeland insecurity these days is to be found among the two-to five million (yup, the number has been expanded) American families who are in danger of having their homes foreclosed. Add in all their tenants and their neighborhoods-because when one house goes, property values decline next door and the tax base quickly erodes.
California is among the hardest hit states...650,000 foreclosed properties were for sale in California according to RealyTrac, the company that is tracking this slow-motion disaster. That was an increase of 177% over the year before. 9821 California homes went into foreclosure just this past January, says another research firm, representing about $8 billion in value. Over 25,000 homes are in pre-foreclosure in Los Angeles alone as of Oscar Sunday. Nationwide, 1.7 million homes defaulted last year.
Most of these homes were owner -occupied, so we are not just talking about an abstraction but millions of real people, disrupted lives and dreams for families affecting schooling and even voting because most registrations are residential. This problem has been called a "50-State Katrina."
And most of these homeowners are likely in deep debt now that they can't use their homes as ATM machines to pay off their credit card bills. Many of those who borrowed themselves into a modern form of serfdom didn't realize how much they would have to pay. They are the new victims of downward mobility. No wonder most marriages break up under this kind of stress. Late night TV is filled with commercials for debt consolidation because these companies know how much anxiety and sleeplessness afflict those in debt."