Earlier this week, I was struck by this article from the New York Times:
Foreclosures Force Ex-Homeowners to Turn to Shelters
The first night after she surrendered her house to foreclosure, Sheri West endured the darkness in her Hyundai sedan. She parked in her old driveway, with her flower-print dresses and hats piled in boxes on the back seat, and three cherished houseplants on the floor. She used her backyard as a restroom.
Growing numbers of Americans who have lost houses to foreclosure are landing in homeless shelters, according to social service groups and a recent report by a coalition of housing advocates.
Foreclosure is something that I see every day – it is right in front of me. The house down the street and around the corner are in foreclosure. I live in a nice neighborhood in Orlando, Florida. Our subdivision boasts about 4,000 homes – all built in the last fifteen years – about half of them were built in the last five years.
Last month in our monthly neighborhood newsletter we learned that about 10% of these home are in foreclosure with more coming on the market every day. I think this can be attributed to fancy mortgages which put people in homes they could not afford. These fancy mortgages called ninjas – no income, no job and no assets included zero down payments and interest only loans. Appraisals oddly always matched the cost the builder was trying to sell the home for. As soon as the loans began to re-price families could no longer honor their obligations. Many waited for the notice from the bank – others have just left.
I feel for the families that have lost their homes due to exploding interest rates. Many of them did not see it coming while others knew it was just a matter of time. I grieve for a grandmother who is suddenly living in the streets because she lost her home. But I want to explain that this serious foreclosure situation has affected EVERY family in my neighborhood – not only those in foreclosure. Our homes have dramatically decreased in value – as much 35% – sometimes even more. The down payments we made and equity we expected has disappeared as foreclosure homes are selling for far less than they cost to build.
I sympathize with each family that has lost their home. But my experience has lead me to believe that the mortgage mess goes far beyond those families losing their homes. Every single family in Florida will be affected in some way by this mortgage meltdown. The one bright side for me – I don’t need to sell right now – I can wait it out. I did not expect my equity to fund my children’s education or my retirement as many of my neighbors did. But what about those that did have these expectations. Good hard working people who believed their home was an asset that would increase in value over time. I know of many Florida credit unions working hard to help their members through these rough times.
Have you or your family been affected by the current economy?
Has your credit union been able to help?
Credit unions, this is why we need you.