It Is Not Just House Owners But Others Too Are Buckling Under Foreclosures
Posted on September 10th, 2007 in Foreclosure Crisis |In July, foreclosure figures were grim right across the nation. It was an all time high of 93% as against the same month in 2006. The numbers thrown out of their hearth and homes runs into tens of thousands. The borrowers not only had their roof but together with it their equity and credit rating blown away.
The government has come out forcefully to stem the tide. But many are criticizing the move. The market has done its work. Lenders have been justly punished for being predatory. The latter too behaved greedily and grabbed houses well beyond their means. President Bush is not wrong when he said that a bail out programme would open the gates for a recurrence of the same happenings.
The problem is not confined to the borrower-lender zone. The government administration, the Congress and the Federal Reserve together with other governmental bodies are equally to be blamed. Taxes and credit policies had been tilted in favour of lenders. It is this that led to the housing boom. The number of house owners rose to an all time record in America. The minority house owners crossed the 50% mark for the first time in history. Bush took this credit for himself in his 2004 speeches. But now it is the same policy that is puncturing the bloated balloon. Minorities are worst affected.
Prominent planners and economists can see the writing on the wall – entire localities will take on an off-colour look. Research shows that crime and violence are increasing in those areas where foreclosures are at its highest. A yearly increase of 2.8 foreclosures per 100 homes leads to 6.7% crimes of violence. The boarded houses have a psychological impact on the locals.
Another angle of study shows that one foreclosure brings down the price of other houses in the area within a radius of 1/8th of a mile of the infected unit. This is a conservative estimate. In reality it is worse and could further escalate with foreclosures increasing. What is going to happen will make the past pale into insignificance.
In the forthcoming presidential elections perhaps this is going to be prime bone of contention. A strong opinion is that the government instead of focusing on the specific issue should give its attention to the greater economy and reform defective policies.
- Foreclosure Crisis in USA Leads to Global Instability
- Financial Oligarchy Responsible for Foreclosure Crisis
- South Florida County Has Fallen Victim to Foreclosure Crisis
- Foreclosures Pull Down a New Iron Curtain in Europe
- The Foreclosure Crisis Has Weakened the Dollar
- To Avoid Rerun of Foreclosure Crisis Financial Regulations to be Tightened
