Goodbye to the so-called American dream. Many families face the choice: heat or eat.

dajoki

(1000+ posts) Send PM | Profile | Ignore

Fri Feb-15-08 03:36 PM
Original message

Goodbye to the so-called American dream. Many families face the choice: heat or eat.

This is quite a long article, so I'll try to keep my comments as brief as possible. I do ask that you read it though and try to keep it going, because for those of us facing this it is that important.

Never in my life did I expect to be in this situation, I always played by the rules, paid my bills and provided for my family. But because of a series of unforseen circumstances,(which I will get into at a later time in order to keep this short, or you may ask me about it if you wish) I feel that I have let them down. My family and I are about to lose the home that we scrimped and saved for our entire lives, the home that we have lovingly restored with our own hands, sweat and blood.

However, this not only about me and my family, its about the millions of others across the country, through no fault of their own, find themselves in this same situation and even worse. Even though I have desperately tried, I cannot find an answer, maybe somebody here can think of something, any idea will be greatly appreciated, maybe there is something I overlooked.

A special thank you to bobbolink for her support through all of this!!
-----------------------------------------------------------------------------------------------------
Danny Schechter's blog
Is Your Home Still Your Castle As Foreclosures Rise?
by Danny Schechter | February 15, 2008 - 9:19am
http://www.smirkingchimp.com/thread/12855

When Hurricane Katrina flooded New Orleans, the world saw a disaster unfold. Homes sank underwater, bodies floated away, and to this day no one has really accepted responsibility while thousands remain homeless. Katrina shamed our nation in a saga spawned by criminal neglect, inept government responses and indifference in high places.

No one with a home in America can ever be sure that a similar tragedy couldn't befall them -- whether through floods, tornadoes, fires or by the severe weather that seems to be worsening in part because of global warming. Now there's a new threat, a wave of foreclosures. Millions are saying goodbye to the "Ownership Society," the so-called American dream.

Disasters R'Us, or so it seems.

Right now, in our midst, on streets nearby our own, a national tragedy of an even larger proportion is unfolding with a predictably pathetic response from an "able to do nothing" Administration with still a tepid response from politicians, candidates, and even progressive organizations.

Over two and a half million American families are facing foreclosures in what is shaping up as a 50 State Katrina. Many of their homes also house tenants who risk eviction. When a home is foreclosed upon, the house next door loses value. Soon, there goes the neighborhood and the city tax base. The ripple effect is dramatic.

Even more dramatic are some of the tactics homeowners are using to fight back against many of the deceptive subprime and other loans that knowingly put them in unaffordable situations. When courts favor property rights over human rights, many are just trashing their homes in an orgy of anger and revenge before abandoning them.

You might say these homeowners should have known better. True, some may have been scammers in the American tradition of always seeking a good deal, buying now and paying later. But there's no longer any denying that a large number were victimized by predatory practices and "deals" pedaled by sleazy brokers but backed by top banks and investment houses.

Richard Biter, a former Subprime salesman tells all in, "Greed, Fraud & Ignorance: A Subprime Insider's Look at the Mortgage Collapse." He reports, according to a review by blogger Charles Hugh Smith, "that up to 80% of all subprime loan applications were rejected by honest subprime mortgage brokers. This stunning statistic suggests the frenzy which overtook the nation as people who were clearly below-average credit risks stormed the housing market, trying to get in and get rich just like everybody else."

Their mortgage paper, often inflated by fabricated appraisals, was then resold into Wall Street, securitized, sliced, diced, bundled and resold again as "asset backed" when they weren't. This fraud has led to BILLIONS of dollars of losses and write-downs by institutions that should be prosecuted for perpetuating a white-collar crime wave.

Unfortunately, these crooks will probably get off, and can afford to take losses. Most Americans living from check to check in an economy heading south can't. Many are deeply in debt having lived off of equity loans from homes that long ago became ATM Machines. Other are facing job losses, trying to cope with rising costs in an economic squeeze that is getting worse.

This week, the Treasury Department got together six major lenders who are now offering to postpone foreclosures by 30 days. THIRTY DAYS! What generosity. Thanks a lot. Even Wall Street analysts say it's a joke. There is a worse crunch to come as more mortgages reset and prices fall.

"With home prices expected to eventually fall 20% to 30% nationally about 10 million households will have negative equity," explains economist Nouriel Roubini. "Banks will have to eventually recognize that even a plan that freezes the reset of most mortgages will not be enough. To stop foreclosures they will have to accept a reduction of the face value of the mortgage to the lower current value of the home. While this may be costly to the banks the alternative of foreclosure and selling such homes in an illiquid market is worse for creditors. Thus, much more radical policy options should be considered to avoid the biggest foreclosure crisis in US history."

A few groups are protesting and some of the worst offenders are making deals with advocates like NACA and ACORN to front for their mortgages. These non-profits can do a better job of offering mortgages than greedmeisters like Countrywide. To stop foreclosures, mortgages have to be restructured and made affordable.

Not surprisingly, some protests are erupting but local governments are trying to muzzle them, The Detroit Free Press reports:

"A federal judged ruled Monday that two members of a group that supports a moratorium on mortgage foreclosures can hand out leaflets during State Attorney General Mike Cox's Avoid Foreclosure forum today. Members of the Michigan Emergency Committee Against War & Injustice complained that they were told to leave Cobo Hall on Dec. 13 during an Avoid Foreclosure forum that attracted more than 4,000 people. They were forbidden to hand out leaflets demanding that Gov. Jennifer Granholm declare a state of emergency and impose a moratorium to stop foreclosures and utility shutoffs."

Michigan is in a state of urgency on this issue. It was reported this week that "The Detroit area, hit hard by the double-whammy of unemployment and a slumping housing market, had the highest foreclosure rate in the nation last year, with several cities in California ranked close behind."

If you drive through the Motor City as I did recently, you will see areas that look like Berlin after the war, blocks and blocks of empty house and spreading urban decay. There have been reports of "ghost towns" throughout the Mid West. Many families face the choice: heat or eat. No wonder, homelessness leads to an upsurge in crime.

Why aren't we all fighting for debt relief like people in Africa did? Why don't we have a bigger campaign for a moratorium on foreclosures until the scams are investigated as the FBI is starting to do, late as usual. Why isn't this a national issue? The American Home Owners Resource Center in California told me that unscrupulous lawyers are trying to shut down their website (Ahrc.com) exposing fraudulent practices by lenders and homeowner associations.

If not now, when? Our homes used to be our castles. For some in deep debt, they became prisons until they aren't there any more.