Two more points about foreclosures.
MBA Economists estimates are that the foreclosure crisis will (a) spread to the much larger and much more previously secure prime market (so not just subprime) and (b) foreclosure rates will peak sometime in late 2010.
So the effect that foreclosures have on the real economy will continue to increase for an additional 15 months, severely hurting any recovery for the bottom 90% of the country, and peak just in time for the midterm elections. So it surprises me, for both economic reasons and as well as matters of political survival, we aren’t taking a more aggressive stance here. Is the grip of the financial industry that strong?
Last point – I’m a numbers guy. I’ll chat your head off about externality estimates of foreclosures, spillover into GDP, embedded options hidden inside financial instruments, etc. But these numbers are just abstractions of real suffering by real citizens in our country.
So I want to point out two fantastic articles by The American Prospect, who have been doing a great job reporting through to the reality on the street without neglecting the larger story, about the foreclosure crisis. Take some time to read them this weekend; it’s important to know how devastating these numbers are for neighborhoods.
Kai Wright, The Assault on the Black Middle Class Considering the way that housing has played a special role in the building of black middle-class wealth, the comparative impact on different races’ experience of middle-class stability may be thrown off for an entire generation.
Alyssa Katz, There Goes the Neighborhood A look into housing spectulators playing confidence games in a poor neighborhood of Atlanta while HUD and community groups try to reclaim the abandoned housing.
Oh, and also this article, from the New York Times back in March of 2009, when the foreclosure crisis was less than it is today.
Alex Kotlowitz, All Boarded Up Kotlowitz shows how the foreclosure wave is devastating Clevland, with a special problem of houses that have been all but completely abandoned by banks, left to a legal limbo of non-ownership.