Mortgage Crisis Taking a Heavy Toll
As Countrywide, the nation’s largest mortgage lender announced today that foreclosures have more than doubled in November and late payments continue on the rise, the toll on families and tax revenues are also going up. More renters who were tenants in good standing are also finding themselves without a place to live as their landlords are foreclosed.
Social service agencies are also reporting that homeless rates are going up sharply due to the fate that foreclosed homeowners and tenants are falling victim to. And many analysts continue to warn that state and local governments will soon feel the effects in the form of fast-declining revenues from property taxes. There has also been a rise in divorces as families in foreclosure become more and more stressed and take it out on each other.
Society at large is not immune from the ripple effect of the mortgage crisis either. Large overseas banking institutions are even feeling the effects of our problems, many of which have had to look for millions to remain solvent.
As for tenants in trouble, RealtyTrac, the large Irvine, California firm that keeps statistics on things like this, estimates that 20% of all foreclosures are on homes bought as investment properties, most of which are rented. Tenants are getting little notice before they lose the roof over their heads despite being current on their rent payments. Regrettably, the only thing renters can do is move out. They have no legal recourse as leases become void when the owner/landlord is foreclosed. Right now, Congress is considering a measure that would require landlords to give their tenants 90-days notice before they can be evicted. But unfortunately, it will come too late for thousands of tenants. If they wait until an eviction action is commenced, it will appear on their credit record and make finding a new rental difficult if not impossible to secure.
Shelters and rescue missions are also feeling the problem because they were totally unprepared for the big increase in the homeless brought on by the foreclosure debacle. One homeless shelter in Bakersfield, California, has reported that they are now at capacity after having taken in seven families in just one day this week. And people in the midst of foreclosure keep their phones ringing as they search for a place to go. And government agencies that can aid these families are in a major bind as tax revenues drop and their ability to provide help does as well.
A great example of just how far reaching this ripple effect from foreclosures has become can been seen in the fact that as home values decline, so do property tax assessments. Even those still in their homes will be paying less tax as the home’s value goes down.
California can lose nearly $3-billion in property tax revenue in this way along with the loss of another billion in property transfer and sales tax revenues.
Domestic abuse hotlines have also been reporting a meaningful increase in calls from distressed homeowners who are suffering stress-related abuse from the foreclosure situation.
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[...] unknown wrote an interesting post today onHere’s a quick excerptAs Countrywide, the nation’s largest mortgage lender announced today that foreclosures have more than doubled in November and late payments continue on the rise, the toll on families and tax revenues are also going up. … [...]