Bored? Watch the Foreclosure Ticker.
June 4, 2009This week marks a dismal point in American history. We have cleared 1,000,000 foreclosures for 2009 already. That’s 1 foreclosure every 13 seconds, or about 6,600 a day. The Center for Responsible Lending has a catchy little ticker HERE.
Screenshot of the foreclosure ticker
The horrific issue of rising foreclosures permeates so many aspects of American life that it’s tough to pinpoint the exact point where things went wrong. Who’s to blame? Predatory lending practices? Over-zealous borrowers? A society lacking accountability? A culture of lies and falsification, all in the pursuit of money? An overly optimistic populace? A greed mentality? Lack of Government controls on banks? A hybrid of all of the above?
Our thoughts? Actually, we think the problem is much bigger than just banks and borrowers. We see this as one of the many cultural illnesses spun off from our collective lust for material items. The pursuit of riches has distanced people from what is right and wrong, and people have consistently demonstrated that they are willing to sacrifice their integrity for personal gain. This is as true for the loan shark as it is the greedy condo speculator who lies to get the loan. It’s a sociological and philosophical issue at heart, that runs much deeper than rules, regulations and rates.
What about you? What do you think? Do you think we can change? Are you finding more people in pursuit of happiness or more people in pursuit of wealth in your sphere of influence? Are we becoming more enlightened or less? Can we pull ourselves out of this ill state of collective consciousness and restructure our value systems, so that we can learn, grow and move forward? We’d love to hear your comments below.
Sorry for the bummer of a post but when you read news like this, it’s very eye-opening and gets you thinking about the larger issues at hand.
Honestly, most people I know are just frustrated that they can’t even get into a reasonable house / condo they want at a price they can afford; and these are people with well paying jobs, solid financial situation. There remains a significant imbalance between home values and affordability.
There was a general lack of oversight on many fronts that allowed several groups to enable the current situation. No reason to point fingers other than to put controls in place to prevent a repeat. Just eliminate exotic/creative mortgages for all but the ultra wealthy who actually need such products; enforce a meaningful down payment requirements; reduce incentives to speculate and you will do a lot to solve future lenders and buyers from getting into too much trouble.
Personally, until a normal down payment, an 80/20 loan w/30yr fixed rate loan can afford a reasonable home (and were a long way off from that based on my assessment) we will continue to see problems. Americans should not have to find ‘creative’ or ‘exotic’ loan products or sacrifice a disproportionate percentage of their income to live in a normal home. And by normal, I’m not talking about a D7 / View home with designer remodel and stainless everything. Maybe SF and NYC will always command a premium that will force some to rent, and others to stretch, but the problem stems from basic affordability over the long run. The system enabled and encouraged this bubble.
My guess is that this started in 1997 and will take as long to full unwind. People predicting massive drops, or bottoms do not seem to fully understand that real estate takes a long time to adjust due to the low number of transactions. My belief is that we will not see the end of price erosion (erosion = slow a precipitous decline) until 30-50% of the total housing stock turns over at least once.
Just one persons opinion.
Not sure what’s broken – it’s definiely touch to pinpoint one thing. Most friends I know are trying to enjoy the simpler things and not worry so much about the material side. But unfortunately our culture is only as strong as its weakest link.
Interesting post — keep them coming!
Thanks for your contributions. I agree that things will take a while to fully stabilize and turn around. It seems many of the economic and financial systems we have in place are based upon infinite growth. While I admire the optimism, things just don’t work that way in a finite world with finite resources. Hopefully America can make the shift towards “sustainable” as a collective mindset, and learn a thing or two from this recession.