It's already begun for a few http://news.yahoo.com/s/nm/20071221/us_nm/usa_housing_social_dc Tent city in suburbs is cost of home crisis By Dana Ford Fri Dec 21, 8:18 AM ET ONTARIO, California (Reuters) - Between railroad tracks and beneath the roar of departing planes sits "tent city," a terminus for homeless people. It is not, as might be expected, in a blighted city center, but in the once-booming suburbia of Southern California. ADVERTISEMENT The noisy, dusty camp sprang up in July with 20 residents and now numbers 200 people, including several children, growing as this region east of Los Angeles has been hit by the U.S. housing crisis. The unraveling of the region known as the Inland Empire reads like a 21st century version of "The Grapes of Wrath," John Steinbeck's novel about families driven from their lands by the Great Depression. As more families throw in the towel and head to foreclosure here and across the nation, the social costs of collapse are adding up in the form of higher rates of homelessness, crime and even disease. While no current residents claim to be victims of foreclosure, all agree that tent city is a symptom of the wider economic downturn. And it's just a matter of time before foreclosed families end up at tent city, local housing experts say. "They don't hit the streets immediately," said activist Jane Mercer. Most families can find transitional housing in a motel or with friends before turning to charity or the streets. "They only hit tent city when they really bottom out." Steve, 50, who declined to give his last name, moved to tent city four months ago. He gets social security payments, but cannot work and said rents are too high. "House prices are going down, but the rentals are sky-high," said Steve. "If it wasn't for here, I wouldn't have a place to go." 'SQUATTING IN VACANT HOUSES' Nationally, foreclosures are at an all-time high. Filings are up nearly 100 percent from a year ago, according to the data firm RealtyTrac. Officials say that as many as half a million people could lose their homes as adjustable mortgage rates rise over the next two years. California ranks second in the nation for foreclosure filings -- one per 88 households last quarter. Within California, San Bernardino county in the Inland Empire is worse -- one filing for every 43 households, according to RealtyTrac. Maryanne Hernandez bought her dream house in San Bernardino in 2003 and now risks losing it after falling four months behind on mortgage payments. "It's not just us. It's all over," said Hernandez, who lives in a neighborhood where most families are struggling to meet payments and many have lost their homes. She has noticed an increase in crime since the foreclosures started. Her house was robbed, her kids' bikes were stolen and she worries about what type of message empty houses send. The pattern is cropping up in communities across the country, like Cleveland, Ohio, where Mark Wiseman, director of the Cuyahoga County Foreclosure Prevention Program, said there are entire blocks of homes in Cleveland where 60 or 70 percent of houses are boarded up. "I don't think there are enough police to go after criminals holed up in those houses, squatting or doing drug deals or whatever," Wiseman said. "And it's not just a problem of a neighborhood filled with people squatting in the vacant houses, it's the people left behind, who have to worry about people taking siding off your home or breaking into your house while you're sleeping." Health risks are also on the rise. All those empty swimming pools in California's Inland Empire have become breeding grounds for mosquitoes, which can transmit the sometimes deadly West Nile virus, Riverside County officials say. 'TRICKLE-DOWN EFFECT' But it is not just homeowners who are hit by the foreclosure wave. People who rent now find themselves in a tighter, more expensive market as demand rises from families who lost homes, said Jean Beil, senior vice president for programs and services at Catholic Charities USA. "Folks who would have been in a house before are now in an apartment and folks that would have been in an apartment, now can't afford it," said Beil. "It has a trickle-down effect." For cities, foreclosures can trigger a range of short-term costs, like added policing, inspection and code enforcement. These expenses can be significant, said Lt. Scott Patterson with the San Bernardino Police Department, but the larger concern is that vacant properties lower home values and in the long-run, decrease tax revenues. And it all comes at a time when municipalities are ill-equipped to respond. High foreclosure rates and declining home values are sapping property tax revenues, a key source of local funding to tackle such problems. Earlier this month, U.S. President George W. Bush rolled out a plan to slow foreclosures by freezing the interest rates on some loans. But for many in these parts, the intervention is too little and too late. Ken Sawa, CEO of Catholic Charities in San Bernardino and Riverside counties, said his organization is overwhelmed and ill-equipped to handle the volume of people seeking help. "We feel helpless," said Sawa. "Obviously, it's a local problem because it's in our backyard, but the solution is not local."
ah, so a guy comes into your office stating he's a banker and makes 200K a year. However, there he is sitting in front of you, no haircut for a month, dressed like he shops at the local garbage can and stinks like the sewer. You smile and give him a mortgage without verifying a one single thing he signed for. Difficult to say who is at fault here. What I do know is, honest hardworking folks who paid top dollar at the peak of the housing scam are about to be taken for a ride. And it's not going to be a pretty one since most of their jobs are moving offshore at a accelerated pace.
you can't pick and choose like a 2 dollar street hooker. Read the entire article. You seem to have missed this part. "Steve, 50, who declined to give his last name, moved to tent city four months ago. He gets social security payments, but cannot work and said rents are too high. "House prices are going down, but the rentals are sky-high," said Steve. "If it wasn't for here, I wouldn't have a place to go." 'SQUATTING IN VACANT HOUSES' Nationally, foreclosures are at an all-time high. Filings are up nearly 100 percent from a year ago, according to the data firm RealtyTrac. Officials say that as many as half a million people could lose their homes as adjustable mortgage rates rise over the next two years. California ranks second in the nation for foreclosure filings -- one per 88 households last quarter. Within California, San Bernardino county in the Inland Empire is worse -- one filing for every 43 households, according to RealtyTrac. Maryanne Hernandez bought her dream house in San Bernardino in 2003 and now risks losing it after falling four months behind on mortgage payments." Anyway you dice this thing. only a fool thinks this will end all rosy. And there are quite a number of fools on ET.
I agree, all parties are at fault. But then again, the article is about the poor "victims", the borrowers, not the bankers. If you'll notice my other posts, you'll see that when an article about bankers being in trouble comes around, I make similar comments about them. The banks were morons and very shady to give money based on stated income, that is beyond stupid...but regardless of what their policies were, the borrowers wouldn't have gotten the loans had they told the truth about their income. It all boils down to banks being predatory by setting the trap.......but the people only fell for it by being dishonest. Nothing but a mousetrap....the banks took advantage of people's natural tendency to lie and be greedy if given the chance. Yes there are some honest people who bought at bad times and are about to have to suffer because of the bubble popping.....but hey, there are plenty of honest people who buy stocks at the top, and ruin their savings and 401ks by fooling around with a market they don't understand. I am sorry, but in any case, it is up to you and you alone to educate yourself on a subject before you invest hundreds of thousands of dollars into it. Even if it's not fair to have to....too bad...that's life. It's your responsibility to educate yourself. Regardless of bank policy, the people shouldn't have lied on their mortgage apps. Do you disagree?
I think this thread title "How will the second great depression look like? " is the real problem. We get a consistent parade of lemmings who cry out about the coming disaster. Reminds me of the person who had a great economic indicator; it predicted 24 out of the last 3 recessions... For decades, psychics have been crowing, "this is the year Queen Elizabeth will relinquish power." One of these years, they will be right, and the blind roosters will crow about their predictive powers...
No doubt greed got the better of both parties involved in these shady setups. Can't blame the crack head only, without looking into who sold him the crack dimes in the first place. However, what do you think the ramifications are for the average honest bloke who is now paying for a mortgage on a house that is probably losing value every day? As long as he has a job, he can chug along. What happens when the economy slows down and he loses his job?
Unfortunately I think the fact that jobs are going overseas is another can of worms entirely. I bought a house during "the bubble" well, towards the end of it......and I am fine, because I am not a moron. I crunched my numbers and figured out what my wife and I could afford no matter what. We lived in a 900sq ft apt with two large breed dogs for over two years planning and making sure we knew when it was time to strike. When that time came, we went for it and now we're fine (and we now now have another dog). Unfortunately most people, even if honest, are still too lazy to put the effort into making smart decisions. I do not feel sorry for them. People buy shitty cars all the time, they get taken on trade-in value vs their new purchase price all the time...people don't even realize how much they lose when they make a trade-in, all they focus on is how much they are paying for the new car....blah blah blah, there are people who constantly work at trying to separate you from your money.....if you want to go through life without feeling like you got ripped off, then you have to do the homework and plan properly....if you aren't willing to stay on top of your finances and run your life as a business, then don't bitch when someone gets the best of you.
Also, to clarify and make sure I didn't miss your point.... Really the only answer to that question is that they shouldn't have bought in the middle of a bubble. it doesn't take a rocket scientist to know that if a house you are looking at has doubled in price in the past year then maybe it's a little overvalued. You can see that there was a huge craze and everything was totally overvalued...They should have the patience to wait out the storm. They didn't have the patience and bought a house that was inflated, and now they gotta pay the piper. Nothing's free. I waited and waited through the bubble and when I thought it was safe, I jumped in and bought, like I mentioned earlier...Did I catch the bottom? No. I don't catch the bottom in my trading either, but I try to make the best and most logical decisions possible, and it tends to turn out alright. I minimized the damage by using my brain and being patient. Wise man say don't buy anything in bubble. Patience is a virtue, it' s a crying shame that those honest people didn't possess it when they decided to buy, but shit man that's life. If you violate virtues and morals, there is generally a price to pay.