Recession Creates Legions of Newly Homeless

[Rafterman]

Source: Alexi Mostrous, Washington Post Staff Writer

Saturday, July 11, 2009; 5:40 PM

Louis Gill doesn't like to turn anyone away. The director of the Bakersfield Homeless Center in California has taken to laying out cots and mattresses between the shelter's 174 registered beds to cope with the rush of homeless families brought to his doors by the financial crisis.

"Last year we saw a 34 percent increase in homeless families and a 24 percent increase in homeless children," he said. "Why do we go beyond capacity? Because in a just society, a child should not have to sleep outside or in a car."

Gill is a frontline witness to the change in the makeup of the country's homeless. The stereotype of a homeless person as a single man no longer applies. A resident of the Bakersfield center is far more likely to be a young mother with a "good, solid job and a mortgage that she just couldn't pay."

"They're like folks you know and that you've worked with," Gill said. "Maybe the work's not there right now. Maybe they got behind on their payments. But the idea of a typical homeless person has changed. We're seeing individuals come in that have never had to access the safety net before."


Read more: http://www.washingtonpost.com/wp-dyn/content/article/20...

 

[Sarek]

When we get to the point that the politicians and CEO's of corporate America are on the streets, then they might take the situation seriously.

But, by then it will be to late for the rest of us.

 

[Rafterman]

When we get to the point that the politicians and CEO's of corporate America are on the streets, then they might take the situation seriously.

But, by then it will be to late for the rest of us.

I'm afraid that is quickly approaching.

I've been fortunate to have lived in an economic bubble for 20 years.
The other "Recessions" have had little or no affect on the NOVA area.
Not so this go round, more foreclosures and small businesses going under
than one can count. I would hate to be living in other areas of the country when it's this bad here.

 

[Dual]

lol

 

[Kerb Crawler]

The happiest person I've ever seen was homeless. Just him, the book he was reading, his dog at his feet, and the family of birds living in his beard. Off the grid and in control of his life.

Not sure how often he wipes his ass, though.

 

[dogbert]

Almost everytime I go to the gas station nowdays I am hit up for my spare change.

 

[Big Dick McGee]

Listen, no one should be homeless. Especially not children. But we Americans act like we're not culpable at all for fueling this recession.

Yes, some banks, CEO's, and investors are to blame for creating the perfect storm. But...if no one was taking on the mortgages that were then sliced and diced and securitized out the ass, there'd be no finanacial instrument to sell.

The one quote is very telling, "a young mother with a good, solid job and a mortgage that she just couldn't pay." A HUGE part of the problem was that everyone thought they were entitled to own a home. Many people got in WAY over their heads, and took out mortgages that ate up 75% of their combined gross income. So, when one person gets laid off, or the car needs a couple grand in repairs, you're shit out of luck.

When I was buying my first home in 1997, I had a goal that my mortage payment, including escrows, would be no more than 20% of our gross income. Did I want a new $400K home? Sure. But we settled for a nice, 3-story home with potential, and had a mortgage that was around 13% of our gross income.

I think this course correction is somewhat of a good thing; it will make people think twice before making a committment to something they can't afford.

 

[Rafterman]

So much for the American dream, that is after all what they were selling.
I fault the lenders more then their prey. Their prey simply bought into the
dream but found cold hard reality.

The whole world economy is about to face the reset button, good luck too one and all.

 

[Lilac]

What was once thought as the launch button, the big red button that the president has is, in fact, the economy reset button.

The question is, how much cash can Obama shovel to fill in the hole before he gives in to the button's shiney red sheen and jabs it repeatedly, leveling everything to zero and watch us all crawl our way out?

 

[Big Dick McGee]

So much for the American dream, that is after all what they were selling.
I fault the lenders more then their prey. Their prey simply bought into the
dream but found cold hard reality.

In the immortal words of someone wiser than all of us, Caveat Emptor. I always operate on the theory that everyone is out to screw me, and it's up to me to make sure that doesn't happen.

 

[Rafterman]

In the immortal words of someone wiser than all of us, Caveat Emptor. I always operate on the theory that everyone is out to screw me, and it's up to me to make sure that doesn't happen.

Unfortunately, Barnum was right; there is a sucker born every minute. However, he may have been a bit off, from the amount of foreclosures I'm seeing he should have made that every nan o second.

 

[Sarek]

Listen, no one should be homeless. Especially not children. But we Americans act like we're not culpable at all for fueling this recession.

Yes, some banks, CEO's, and investors are to blame for creating the perfect storm. But...if no one was taking on the mortgages that were then sliced and diced and securitized out the ass, there'd be no finanacial instrument to sell.

The one quote is very telling, "a young mother with a good, solid job and a mortgage that she just couldn't pay." A HUGE part of the problem was that everyone thought they were entitled to own a home. Many people got in WAY over their heads, and took out mortgages that ate up 75% of their combined gross income. So, when one person gets laid off, or the car needs a couple grand in repairs, you're shit out of luck.

When I was buying my first home in 1997, I had a goal that my mortage payment, including escrows, would be no more than 20% of our gross income. Did I want a new $400K home? Sure. But we settled for a nice, 3-story home with potential, and had a mortgage that was around 13% of our gross income.

I think this course correction is somewhat of a good thing; it will make people think twice before making a committment to something they can't afford.

Excellent textbook explanation for a complicated problem. I'm sure it's taught at conservative colleges nation wide.

However, the reality is much different.

Wages in this country have stagnated. Corporate America's greed has gotten out of hand. You'll always have a segment of the population that is going to live outside it's means and end up defaulting on its obligations. As we're seeing, it runs from the poverty stricken to the super wealthy. However, with the out of control greed inspired rise in oil prices in the earlier part of the decade which had a 'trickle down' effect on virtually every aspect of business and life for the average consumer, defaults went up and started affecting a larger portion of the consumer base that under normal circumstances had been responsible about their debt. It became a juggling act for the average person to pay for just the basics and still keep food on the table, a roof over their head and gas in the car. With stagnating wages and rising prices, something somewhere is eventually going to blow. It's just easier for conservative America to blame the little guys than it is to evaluate their own contributions to the problem.

Let's face it; you guys are out of touch. You nominated a woman with a dysfunctional family and a pregnant, unmarried, under-aged daughter as your selection for VP. And on a family values platform no less!

 

[Big Dick McGee]

Unfortunately, Barnum was right; there is a sucker born every minute. However, he may have been a bit off, from the amount of foreclosures I'm seeing he should have made that every nan o second.

True. And it's also true that some of the people getting these mortgates did so knowing full well they'd never be able to afford the payments once the ARM adjusted.

The local governments are also partly to blame. In California, there was a concerted push for lenders to give mortages to Mexicans (even if they couldn't prove they were citizens!!). They did "NINA" loans= No Income, No Assets. Basically, they allowed the applicant to buy a home with no money down, and no income verification. Shit, during the boom, they didn't even perform employment verifications. Basically, you could say you made $250K a year and no one would bat an eye. I mean, really, why the fuck would the bank care? They were going to package the mortgage with a ton of other bad deals, and sell them to investors. Their risk was minimal.

The whole thing was a house of cards: You had buyers knowing full well that they couldn't afford they homes they were buying, Appraisers would inflate the value of the property to match the loans, and Lenders would approve mortgages that were extremely high risk, then turn around and sell 'em to investors. The investors didn't perform their due diligence, and were left with portfolios full of shit.

I'm oversimplifying, of course. But that's a pretty accurate description of how we got into this mess. My point is, everyone who participated in this fiasco shares culpability. It's those of us that are fiscally responsible that get somewhat screwed.

 

[Big Dick McGee]

Excellent textbook explanation for a complicated problem. I'm sure it's taught at conservative colleges nation wide.

However, the reality is much different.

Wages in this country have stagnated. Corporate America's greed has gotten out of hand. You'll always have a segment of the population that is going to live outside it's means and end up defaulting on its obligations. As we're seeing, it runs from the poverty stricken to the super wealthy. However, with the out of control greed inspired rise in oil prices in the earlier part of the decade which had a 'trickle down' effect on virtually every aspect of business and life for the average consumer, defaults went up and started affecting a larger portion of the consumer base that under normal circumstances had been responsible about their debt. It became a juggling act for the average person to pay for just the basics and still keep food on the table, a roof over their head and gas in the car. With stagnating wages and rising prices, something somewhere is eventually going to blow. It's just easier for conservative America to blame the little guys than it is to evaluate their own contributions to the problem.

Let's face it; you guys are out of touch. You nominated a woman with a dysfunctional family and a pregnant, unmarried, under-aged daughter as your selection for VP. And on a family values platform no less!

I never said that the outsized ambitions of some investment firms didn't contribute to the current finiancial crisis. Hell, the crux of the problem was caused by brokerage firms. Some of these firms paid the ultimate price; no one five years ago though Bear Stearns or Lehman Bros. would ever be brought down. But they were a victim of their own greed; they did not heed the truism that when something seems too good to be true, it probably is.

The reason this affected the economy so rapidly, and with so much devastation, owes a lot to new trading rules and deregulation, but also to the fact that technology has caused every aspect of the economy to be interconnected in ways it never had been.

Certainly, the spike in oil prices did some harm; however, by the time gasoline prices spiked in 2008, the economy was already completely undermined due to the dearth of bad securitized debt. Rising gas prices didn't cause the economy to collapse, it just sped things up.

Again, I believe that everything that is happening has happened before, and is merely a course correction of sorts. The same exact thing happened to Japan in the late 1990's, we were just too stupid to learn from their mistakes.

 

[Rafterman]

True. And it's also true that some of the people getting these mortgates did so knowing full well they'd never be able to afford the payments once the ARM adjusted.

The local governments are also partly to blame. In California, there was a concerted push for lenders to give mortages to Mexicans (even if they couldn't prove they were citizens!!). They did "NINA" loans= No Income, No Assets. Basically, they allowed the applicant to buy a home with no money down, and no income verification. Shit, during the boom, they didn't even perform employment verifications. Basically, you could say you made $250K a year and no one would bat an eye. I mean, really, why the fuck would the bank care? They were going to package the mortgage with a ton of other bad deals, and sell them to investors. Their risk was minimal.

The whole thing was a house of cards: You had buyers knowing full well that they couldn't afford they homes they were buying, Appraisers would inflate the value of the property to match the loans, and Lenders would approve mortgages that were extremely high risk, then turn around and sell 'em to investors. The investors didn't perform their due diligence, and were left with portfolios full of shit.

I'm oversimplifying, of course. But that's a pretty accurate description of how we got into this mess. My point is, everyone who participated in this fiasco shares culpability. It's those of us that are fiscally responsible that get somewhat screwed.

California was not alone, the same practices were being utilized in Northern Virginia. Only differences were that the recipients were from all over South America and we called them LIAR not NINA.:becky:

 

[The Question]

Unfortunately, Barnum was right; there is a sucker born every minute. However, he may have been a bit off, from the amount of foreclosures I'm seeing he should have made that every nan o second.

Not to nitpick - okay, fine, I'm nitpicking - but it wasn't Barnum who said that. It was one of Barnum's competitors, speaking of Barnum's typical audience member.

 

[Rafterman]

Not to nitpick - okay, fine, I'm nitpicking - but it wasn't Barnum who said that. It was one of Barnum's competitors, speaking of Barnum's typical audience member.

The quote has also been attributed to Mark Twain, but when questioned Barnum never denied saying it.

 

[chucklemeister]

Lies, all lies.

We all know homeless only exist during republican administrations. Everyone has a home as soon as a democrat is elected. If this wasn't true, wouldn't Martin Sheen be out there raising a ruckuss.

hpwink:

 

[The Question]

Conservatives raise children. Liberals raise ruckuses. Probably why they're so worried about "nnnthe chilllldrennnnnnnnnn!" Everybody's worried about everybody else's issue.

 

[Red Whacker]

There's a recession?